Software Model
Interviewing for a SaaS focused Fund and was asked to prep for software modeling - how does this typically differ from a standard LBO? Do you have any B2B SaaS models you can share?
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Accepted an offer for a firm largely focused on software buyout. For context, I have been working as an analyst in software M&A for nearly two years. In my experience, the models were standard LBOs, however, within the case there were software oriented metrics (ie recurring revenue, LTV / CAC, ARR retention, etc.) It was expected to interpret these and provide color in the case debrief.
I did do some practice models that incorporated revenue roll forwards / high-level sales rep build down to adjusted EBITDA (did not encounter these in practice). Dependent on your familiarity with software, I would read about software drivers online and take notes on key metrics + their formulas (Bessemer puts out some good resources and there are plenty of other SaaS primers). I would then look around for software models - I was able to source some from my network and found some online.
Are you able to share some of the ones you found online? I can’t find many thank you!
You mean like ARR roll? And things like ramping productivity per rep over time to build revenue model and model S&M cost? Ty.
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