The importance of the right CFO for a Software as a Service (SaaS) Business
Software as a Service or SaaS as it is known for short is the provision of a technology service or product on a recurring revenue basis, typically monthly but sometimes annually. Usually, the service is hosted in the cloud.
SaaS models are attractive because they combine all the areas that interest investors, the product is readily scalable due its server-based technology and there are plenty of providers such as Amazon and Microsoft who offer pay as you go hosting based on usage.
The growth potential of this model is very significant as once the marketing is right it can get interest from around the world and has the potential for very considerable capital appreciation.
Whilst ever business is not going to be a Unicorn, the is good potential with the SaaS model to achieve very considerable success.
What sort of CFO is required for such a model?
Clearly someone with previous experience of similar companies who has gone through rapid business growth and fund raising is ideally suited.
Here are the things a CFO needs to add the most value to a SaaS business
- Prior experience of SaaS business
- A background with Technology businesses in general
- PE/VC fund raising experience, ideally the more the better
- An Entrepreneurial spirit, by that we mean someone who understands that a small business in rapid growth needs everyone to put in the effort in and pull together
- A team player
- Someone with good people skills, to motivate, support and develop the team
- Business Transformation skills
- Recruitment skills
- Enterprise Resource planning (ERP) experience, as connecting data points is important.
- Business Insight experience.
- Software knowledge.
- Graduate and qualified Accountant.
Having these skills is likely to make the candidate ideally suited.
Where to find a CFO with SaaS experience?
London based FD Capital Recruitment specialises in the tech and Private Equity spaces, so they are a perfect choice to use to recruit your next SaaS CFO. They are well known and active in the Part-Time, interim and Full-Time Recruitment markets, with a focus on London but nationally also.
What sort of salary should I expect to pay an experienced CFO?
In London the expectation is around £140K plus bonus and Long-Term incentive. Outside of London the rate is around £125K.
Will a CFO make a big difference?
Absolutely they will, for a start a potential funder such as a PE house will require an experienced CFO as part of the team and make it a condition of investing. The reason they do so, is they know from experience the value add a good CFO brings with them and adds to an organisation.
Does industry experience matter that much?
Having technology and SaaS experience are very important, but it is not necessary to have the exact same niche, for one having knowledge from elsewhere can bring with it value add it its own right. Also, competitors often have non-compete terms which would otherwise bring issues of a conflict of interest.
Having a CFO onboard your Software as Service business is the key to attracting funding and finding the right one will greatly increase your chances of success.