• SaaSCan™

Advice for SaaS Startups - from Investor Jonah Midanic

by Lauren Thibodeau


SaaSCan recently sat down with Forum Ventures Partner, Jonah Midanic, to ask:

  • What short list of metrics should SaaS founders focus on in the early days

  • What values should SaaS startups target for each

  • What word of advice would you offer to SaaS startup founders and leaders

Some context is important before we dive in. Forum Ventures is currently investing from its fourth pre-seed fund and its first seed fund. And Jonah has a unique perspective on Canadian SaaS given he’s a Canadian, working for a US fund, investing exclusively in Canadian SaaS companies.


Jonah underscores that at the early stages, founders aren’t expected to have clean metrics that show an extensive history. Instead, he advises founders to align on a story, select the metrics that fit best, and show proof points along the way. For example, to illustrate demand for their project, a founder could highlight that they spent $50/day on Google ads and have an 800 person waiting list.

Some of Forum Ventures notable seed-stage investments in Canadian SaaS include:


MinervaAI - MinervaAI is a highly-automated solution for financial regulatory compliance that reduces the burden of performing enhanced due diligence.


PrivateAI - PrivateAI develops privacy-preserving machine learning and natural language processing tools.


VendorPM - A software-enabled marketplace that empowers property managers to effortlessly work with vendors. VendorPM streamlines efficiency at the site-level while providing head office with centralized control through actionable-intelligence.

Jonah calls out three kinds of metrics to focus on: SaaS, Product, and Demand.


Examples of top SaaS Metrics Jonah advises founders to consider at this stage include:

Customer Acquisition Cost (CAC)

Churn (Logo, Gross, Net)

Bookings

Monthly Recurring Revenue

Lifetime Value to Customer Acquisition Cost (LTV:CAC)

Monthly Recurring Revenue Growth Rate

  • Enterprise: a good target is signing up 2 - 3 new customers/quarter.

  • Mid-market: a good target is a Proof of Concept conversion rate of almost 100%

  • Small and Medium Businesses (SMB): look at month over month growth, want to see traction and a go to market channel that matches the sales price

Examples of Product Metrics include: Daily Active Users (DAU) Growth Rate, Time to Value.


Examples of Demand Metrics include: Landing Page Bounce Rate.


Finally, Jonah advises Canadian SaaS companies that US investors will look for early traction or proof points from US customers.


Related Resources

  1. SaaSCan's Full Investor Metrics Research Report - Robust 77-page report on the metrics investors care about most from startup to early stage to later stage growth

  2. SaaSCan's Top 10 Metrics for SaaS Startups

  3. Klipfolio's MetricHQ - Robust metric definitions, formulas, and examples


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