When (and how) should your SaaS startup build a product marketing team?

Ah, the old “what is product marketing” debate. And then there’s the product management versus product marketing dilemma, with the all too common tug-of-war struggle to divvy up areas of responsibility properly. Any way you cut it, product marketing is most often seen as something of a gray area, living at the intersection of your product, sales, and marketing organizations. And while there are plenty of good frameworks to help you figure out who should own what within your own organization, I often hear two questions from SaaS businesses that have started to scale…

  • When should we hire for product marketing?
  • How should we go about building the product marketing function?

This post aims to answer both of those questions.

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Recent Deal Roundup: Q2 2017

Happy Q3, everybody! We’re halfway through the year and moving ever closer to our goal of funding 500 companies. This last quarter we funded a record number of returning clients, along with a lot of new ones!

Here’s a snapshot of some of the companies we funded in Q2.

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Customer success metrics: NPS and CSAT

If there is a single, essential factor for predicting the long-term survival rate of a SaaS company, it’s the churn rate. Even companies with truly explosive growth aren’t immune from the dangers of a steadily increasing churn rate. The greater the percentage of customers who decide jump ship every month or quarter, the bleaker the outlook becomes.

For SaaS companies seeking investment, a high churn rate can present a serious problem. Why should a VC firm take the risk on a business that can’t even keep its own customers around? Is this a startup with a fixable problem, or is it a sinking ship?

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Q&A: SaaS accounting struggles holding your startup back from funding

On Wednesday, we hosted a webinar about the critical accounting challenges SaaS companies face with inDinero. Investment Director Zach Hoene represented Lighter Capital, and inDinero brought Carter Hawke, Accounting Manager.

The webinar covered many bookkeeping woes, from the new revenue recognition rules (effective 2019 for private companies) to accounting stock-based compensation to capitalizing CAC for new customer contracts. It ended with a Q&A where listeners asked for advice solving their businesses’ accounting challenges. The whole video is available here, and here’s what our experts had to say about your questions.

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Lighter Capital client Nuvolo raises $10M in VC

As reported by VentureBeat, Nuvolo, a provider of asset management software to life sciences organizations and pharmaceutical companies, just raised a $10M Series A. New investor GE Ventures led the round. Existing investors NEA and ServiceNow Ventures also participated. Nuvolo plans to use the capital to scale up sales and marketing and hire new employees.

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Using cohort analysis to make your SaaS metrics actionable

As a SaaS entrepreneur, you have a lot of data coming at you. The volume and complexity of the metrics you collect can make your head spin. How to make sense of it all? One great answer is using cohorts. This means grouping your customers by their characteristics to break your data into manageable, actionable slices.

Once you see the patterns in how different demographics use—or don’t use—your product, you can:

  • Determine when and how to best communicate
  • Identify flaws in your messaging or promotions
  • Find out who is best served by your product
  • Design incentives to keep customers engaged when they’re most likely to stop using your product

A good place to start is looking at cohorts grouped by time, segment, and size.

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Calculating net and gross MRR churn for your SaaS business

Understanding where your revenue is growing and shrinking is key to scaling your business. Christoph Janz, co-founder and managing partner of Nine Point Capital, writes that “MRR churn sucks the blood out of your business… SaaS companies should work very hard to get MRR churn down as close to zero as possible, or even better achieve negative MRR churn.”

But before you can improve it, you have to measure it. This post will run through everything you need to know you to understand and calculate gross and net MRR churn.

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How to share financials with your employees

At my first startup, the CEO would run through financials at every other company meeting. She would tell us what our revenue, how it was tracking to our monthly and yearly goals. She would remind us of standard expenses and highlight any major one-offs, like a move to a new office space or a big push at SXSW. The company had a profit share, so understanding the financials meant understanding how we could work harder and smarter to put more money in our pockets.

I had never worked anywhere where leadership shared financials like that, and it was exciting. It was easy for me to place my current projects and the revenue they were driving into the big picture. I knew exactly how valuable I was to the company, and I knew exactly how well the company was doing.

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Our takeaways from the 2017 Americas Alternative Finance Industry Report

The University of Chicago’s Polsky Center for Entrepreneurship and Innovation has released their 2017 report on the alternative finance industry in the Americas. It’s a lot to take in—77 pages of rich data provided by more than 273 lenders, platforms, and consultants (including Lighter Capital). Here are our major takeaways.

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5 ways to survive startup fundraising

Launching a business is hard, but fundraising may be the most brutal part of the process. Investors are cutthroat-hard on the startups they evaluate. Like customers, they’re looking for you to solve their problems. But unlike customers, they’re on the hook for writing a massive check. And they’re skittish and beyond critical in their search for confidence in their investment.

To top it off, fundraising sucks up massive amounts of your time. It puts you in a spin cycle where you’re running from one meeting to the next. You’re putting in hours of grueling work and blowing through your workday—and when all is said and done, your efforts may lead you nowhere.

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