I've got an interview with a mid-market PE firm and they've asked me for:
1 page doc outlining a tech company (pref SaaS/Ent software) I'd invest in
3 ways I'd improve their EBITDA organically (be specific & quantify financial impact)
Any ideas anyone? I'm from FMCG M&A advisory so I'm struggling for ideas on SaaS/Ent software players...
1. Twitter
2. Fire CEO
3. ๐๐
A2 is spot on. Gross margins should be ~80-85% for a SaaS business so start there. Sales efficiency & CAC are metrics you should focus on when analyzing S&M spend. Some firms donโt like to capitalize software R&D so Iโd be careful there.
HC is roughly 80% of SaaS opex so KPIs around efficiency are key here. Moving from HCOL cities to tier 2/3 is a great way to reduce G&A. We moved a company from the bay to the midwest and saved a ton on rent and backfill salaries. Offshoring simple G&A functions or R&D (eastern Europe has quality people) is also an option
Mentor
Thanks VP1 ;)
Mentor
1. Gross margins
2. More efficient S&M spend
3. Capitalize R&D
Go on seeking alpha find something you like, digest the ideas and do extra research. Your M&A background should be more than sufficient with helping you formulate a pitch deck format to pitch the company of your choice. With SAAS focus on multiples, find 2/3 peers to compare growth, high focus on debt servicing/burn rate plus in this high interest environment
Perfect seeking alpha is just what I needed! Thank you
Mentor
4. CPI price calculator to grow revenue and GMs every year
Coach
whats FMCG?
Fast moving consumer goods, like coca cola
Subject Expert
Check 10xEBITDA or Mรบltiple Expansion
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