The SaaS Metrics that Matter Most with Taylor Wilson, Golden Ventures
Golden Ventures is a seed-stage venture capital fund, based in Toronto and investing across North America. Golden is industry agnostic and backs bold teams and their transformative ideas. One third of Golden’s investments are in Canadian headquartered SaaS companies, with the first cheque ranging from 500K to 1.5 M.
Taylor Wilson, Associate at Golden Ventures, calls out the increasingly complex nature of SaaS, with phenomena including consumer SaaS, bottoms-up strategies, product-led growth, verticalized SaaS, and usage based billing models all becoming more prevalent. Given the increasing complexities, there’s no longer a single set of metrics she uses to evaluate all SaaS businesses. Taylor advises founders to identify a set of focused metrics that make sense for their context, and to get obsessed about those. Examples of Canadian SaaS companies in Golden’s portfolio include:
BenchSci – An AI platform to help scientists design better experiments by mining a vast catalog of public datasets, research articles, and proprietary customer datasets.
CruxOCM – Combining advanced physics-based methodologies with machine learning, CRUX software helps ensure control room operators stay safe while contributing to a seamless, continuous operation.
FormHero – FormHero provides Smart Form solutions to transform traditional paperwork and data collection into intuitive, accurate, and elegant experiences.
In terms of metrics SaaS founders should focus on at the seed stage, Taylor has 4 top picks:
Lifetime Value to Customer Acquisition Cost (LTV:CAC) – Here founders should look to achieve a customer lifetime value 3 times the customer acquisition cost or higher.
ARR Growth Rate – At the seed stage, a good target is growing Annual Recurring Revenue (ARR) by 3x annually.
Customer Retention Rate – Here Taylor notes targets vary depending on size of customer:
- 40-70% for Consumer Saas
- 40-60% for SMB
- 80-90% for Mid-Market
- 90-95% for Enterprise
Net Revenue Retention – Here Taylor notes targets vary based on size of customer and go-to-market strategy:
- 55-80% for Consumer Saas
- 100 – 120% for Bottoms up Saas
- 110 – 130% for Enterprise Saas
SaaSCan was created to bring deep experience in customer-centric growth and SaaS metrics to Canada’s growing SaaS ecosystem.
SaaSCan for Startups services were born in the early days of COVID-19 to help Canadian SaaS companies understand COVID’s impact on churn and retention. We have expanded to provide enablement for SaaS startups on SaaS metrics and benchmarks.
SaaSCan for Early Stage Growth services emerged from the need startups have to adopt a customer-centric approach as they grow, so they can deliver ongoing value to existing customers and optimize key SaaS retention, expansion, and efficiency metrics.
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