SaaS companies are characterized as having the perfect business model because of both the recurring and compounding nature of their revenue streams. Relative to other businesses, they are capital-light and often generate significant cash flows at scale. Investors have become increasingly sophisticated at evaluating SaaS companies and the metrics to measure these businesses are becoming more and more well-known. However, the evaluation process still remains a mystery to many founders and we continue to hear that KPI benchmarks are tough to come by. IVP has had the privilege of evaluating thousands of SaaS companies and backing many of the top SaaS companies of the last decade, including AppDynamics, CrowdStrike, Datadog, Dropbox, GitHub, and UiPath, among others. While there is no magic formula for success, we created this handbook based on our experience to demystify the process and share some pro-tips.
