Software modeling?
Hi,
Are there any public resources on how to model software businesses please? Would really appreciate any primer! I have access to sell side model too- are there any good ones to download? Thank you!
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Does anyone have a deferred revenue contract waterfall template they can share? Thanks.
What do you need to know?
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Damn bump same I would like to see a template
Bump - interested in this
No clue how accurate these model templates are but may be helpful: https://slidebean.com/financial-model-template-for-startups
For SaaS: https://www.thesaascfo.com/. If you learn how to do everything there, you will be better off than 90% of the SaaS CFOs I've worked with
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The problem with software companies is trying to make sense of their revenues and respective cost allocations.
A company selling only subscriptions (say monthly and annual plans) is super easy to model.
The moment they have perpetual licenses & maintenance, term licenses and subscription things get more difficult. Why? Because ultimately what you will be trying to assess is GPM, CAC and LTV per product.
Add to that that multi year deals add an extra level of difficulty to the calculations...
On the GPM front : you need to dissect what goes into it (not just hosting). Professional services related costs for instance should go to COGS, impacting GPM. Most companies would just park this into G&A to have GPM in the %80s...
Founders have a tendency to tell you that their company is profitable and growing quickly.
What it means is: recurring revenue is growing but I have already milked the multi year contracts for cash and I need to raise cash today because my actual runway is ~12months.
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Nowadays a lot of people all over the world want to create their own businesses. Not everyone wants to work for someone else and they want to create something of their own, something new and very cool. To run a business in any field you need business management tools. Without CRM programs and your business will be quite difficult to manage. Thanks to such programs you can manage and also monitor the work of your team. You will be able to see the progress of the work and make changes if necessary.
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