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SaaS Playbook: How to Outline Important Milestones for Your Next Funding Round

Metrics updated for 2022

If you’re thinking about fundraising, you’re probably thinking through many different questions. When should you raise? How much should you raise? What matters most at each stage?

We created this SaaS Playbook, and an accompanying blog post on

How to Outline Important Milestones for a Series A Round⁠

to help you navigate your fund raise. Our hope is that you’ll copy it and modify it to be able to track and monitor your own progress against these milestones. Let us know what you think!

You can tweet at us here.⁠

Note: Green highlighted areas are especially important at their respective stage.

SaaS Playbook

SaaS Playbook

Category

Subcategory

Pre Seed (Accelerator / Incubator)

Seed (Early Revenue)

Series A (Product Market Fit)

Series B (Growth)

Series C ++ (Scaling)

Timing

Time in stage

~ 6 months

~ 12 - 18 months

~ 12 months ++

18 months ++

Time elapsed since founding

0.5 years

1.5 - 2 years

2 - 3 years

3 - 5 years ++

4 - 6 years ++

Revenue

ARR Entering Stage

$0.00

$0.1M

$1-1.5M

$3-5M

~$20M+

ARR Growth

Pre-Revenue = NA Otherwise 3x

2.5-3x

Gross Margin

GM near 50%

GM 50% +

GM 70% +

GM 75% +

Milestones

Team

Founder-market fit

Uniquely qualified team (problem/domain)

5As - Attitude, Aptitude, Aware, Ability, Attractor

Visionary leadership

Can attract strong team

Deep view on market

Visionary Leadership

Can get people on their side

Deep understanding of all competitors

Customer capacity growing

Building whole team

Growing leadership and VPs

Recruiting machine established

Capacity building for 10x volume

Mastery of pricing and packaging

Durable culture

Diverse and capable team

Build management bench (including mid managers)

Market

Large, growing market

Understanding of market pace and dynamics

Belief in $100M+ ARR

Problem / opportunity validation

Conviction in $100M ARR

Increasing conviction in a $1B market opportunity

Timing / market pace

Increasing conviction in a $1B+ market opportunity

$300M in ARR

Category definition → leadership

Product

Clear problem definition, one that is:

Unworkable

Unavoidable

Underserved

Urgent

MVP in first customers hands

Customers are engaged

Roadmap to further capture customer $

Product SLIPs:

Simple to use

Low initial cost

Instant and ongoing value

Plays well in the ecosystem

Evidence of product-market fit:

High usage, no churn

Customers would be disappointed if the product was taken away

Validated by:

B2B: customer references

B2C: user engagement

Scaling product-market fit:

B2B: sales / distribution model is scalable

B2C: virality

Multi-part product

Multi product line development

GTM

Potential early customer leads

Early indications of repeatability (organic traction)

B2C: Customer acquisition cost

B2B: Early customers prepay

Repeatability in sales motion

Shortening sales cycle

Increasing dollar-retention rate (DRR)

Customer acquisition cost (CAC) payback < 12 months

Unit economics for repeatability

Churn < 1%

Gross margin > 70%

DRR > 110%

Repeatability in sales motion

Shortening sales cycle

Well trained and productive sales engine

LTV/CAC >= 3:1

Channels for leverage

Strategic partners for growth

Red Flags

Note: Many of these are cumulative.

Lack of team chemistry

"Wantrepreneur" founder

Lack of problem validation

Tech and GTM balance in team

A “like” vs. “must have” product

Outlier customers (a sign of no repeatability)

Poor unit economics

Customer cohorts

Low NPS

Business model scalability

Management is looking ahead to next level of scale

Strong independent board

Financing

Est. Financing $

< $1M

$1-4M

$7-14M

$16-38M

$25-50M

Financing Instrument

Note, 20% discount, cap

Capped note or priced round

Priced round

Pre-Money Valuation

Defer - 20% discount

$10-20M

$30-50M

$90-150M

$300-$400M

Right to Win

Team knowledge

Product velocity

Early view to market edge

Clear view to market edge (defensibility)

First signs of brand success

Realization of market edge

Market analysts point to the company as leading

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