Grow through IPO with Sage for SaaS and Technology

It’s never too soon to start planning for a smooth journey to your startup’s initial public offering (IPO).

We’ve all heard that if you fail to plan, you should plan to fail, and when it comes to something as nuanced as a startup’s progress through its funding rounds to an IPO, that’s certainly the case.

Unless your accounting infrastructure can grow alongside your company and deliver robust performance at scale, you’ll hit more than a few potholes on the journey of taking your startup public. 

In this post, we examine the obstacles startups contend with as they scale, what your goals should be during each growth stage, and how Sage’s new software bundle is helping startups achieve frictionless growth from pre-seed to IPO and beyond.

Here’s what we’ll cover

What challenges do SaaS startups experience as they grow?

SaaS startups usually operate on a recurring revenue model, which contributes to their rapid growth potential but also introduces unique growth-related problems.

As they scale, SaaS startups frequently run into operational issues such as:

User retention struggles

SaaS startups rely on subscription revenue, so they need to retain customers over long periods of time to stay profitable.

As your company grows, delivering ongoing value that fuels lengthy subscriptions gets difficult without real-time KPIs.

You need to be able to monitor performance,  gauge user sentiment, and strategize in real time. That’s hard to do without automation.

Difficulty securing funding

The venture capital fundraising environment for SaaS startups has grown more competitive in recent years with the end of zero interest rate policies.

Tech startups have to be meticulous in presenting investor KPIs and proving their revenue model to meet funding objectives.

This becomes steadily more difficult and complex as startups scale and investors’ expectations rise.

Compliance missteps

When a SaaS startup is in its early days, ASC 606 compliance and revenue recognition are fairly straightforward.

However, as companies scale, recognizing revenue in tandem with thousands or tens of thousands of customer contracts becomes a true logistical challenge.

Without automation, companies risk substantial revenue leakage and non-compliance fines as their regulatory needs grow more complex.

Non-scalable infrastructure

Startup growth puts tremendous pressure on your accounting systems.

Unless you’re equipped with cloud-native accounting software that can scale alongside your company, you’ll have a hard time growing smoothly and hitting your financial goals.

For SaaS CFOs, it’s not enough to seek growth for its own sake.

You can only get so far with that philosophy before you encounter problems.

You need to lay the groundwork for frictionless growth all the way through IPO, and that starts with your accounting software.

Sage for SaaS and Technology offers frictionless growth through IPO

Sage for SaaS and Technology helps startups bypass growing pains to scale seamlessly from pre-seed to IPO and beyond.

From early stage SaaS startups to late stage tech companies getting organized for an IPO, Sage’s new software bundle can help tech companies achieve truly frictionless growth.

Early-stage SaaS startups: start simple, scale big

Throughout their lifecycle, startups’ priorities and financial objectives need to evolve in alignment with investors’ expectations.

Otherwise, you’ll experience significant friction as you pass through your funding rounds, and you may miss your funding objectives altogether.

For early-stage startups, the goal is to prove to investors that you have a viable revenue model.

To accomplish that, you need investor metrics like cash flow, customer lifetime value (CLTV), monthly and annual recurring revenue (ARR and MRR), and customer acquisition cost (CAC).

Sage’s software bundle for tech companies supplies all those KPIs and hundreds more, updated in real time with best-in-class accounting AI.

Sage for SaaS and Technology was built to help SaaS CFOs prove their revenue model with:

• Essential investor KPIs for real-time business intelligence

• AI revenue forecasts to show investors your expected trajectory
• A single source of truth (SSOT) to simplify funding round preparation

With Sage for SaaS and Technology, everything you need to prove your revenue model is right at your fingertips.

Growth-stage SaaS startups: display dynamic growth

As your startup scales and you embark on your Series B and Series C funding rounds, your financial and strategic priorities will need to change.

At this stage of your startup’s lifecycle, investors will want to see that your revenue model can keep building on its prior momentum.

Sage for SaaS and Technology sets startups on the path to funding success with essential growth-stage KPIs:

• Net dollar retention
• Upsells and subscriber renewals
• Revenue and customer churn rates
• Net change in CMRR, and other vital KPIs

In addition to having the metrics growth-stage startups need, Sage for SaaS and Technology gives SaaS CFOs access to automated revenue recognition, 300+ subscription billing models, interactive financial reporting, and other essentials for growth stage tech companies.

Late-stage, pre-IPO: Everything you need to go public

As your SaaS startup approaches the pre-sale or pre-IPO stage, your operational needs become much more complex.

At this stage, most companies are operating internationally or aiming to, which introduces new accounting challenges and nuances.

Sage’s new software bundle has all the accounting tools CFOs need to build a thriving global enterprise: 

• Seamless FX
• Global consolidations
• Multi-entity accounting
• International tax automation

Sage for SaaS and Technology can help you nail your late-stage funding rounds with investor KPIs like profitability and gross margin. 

At this stage, most tech companies have upgraded their accounting software multiple times to accommodate the growth of their business and access the investor KPIs they need.

Sage for SaaS and Technology is a convenient yet robust software bundle that can carry your startup from pre-seed to IPO and beyond.

Once you’ve gone public, you’ll need to walk the compliance tightrope

Once you’ve taken your company public, you’ll need to double down on compliance.

Public companies are subject to much closer federal scrutiny, and financial penalties for regulatory lapses are often far more severe.

You’ll be required to follow additional regulatory standards, such as the Sarbanes-Oxley Act of 2002 (SOX).

SOX compliance involves stringent financial reporting and record-keeping requirements, and approaching it manually involves a mountain of work.

Sage for SaaS and Technology features automated SOX compliance workflows that can save you time, money, and regulatory headaches.

It’s even equipped to handle the corporate governance mandates in SOX section 302, which holds CFOs personally liable for financial reporting errors.

Hit the ground running with Sage’s guided implementation

No matter where you are on your IPO journey, you can’t afford to waste time on a lengthy or complicated software implementation.

Sage for SaaS and Technology includes a guided implementation built on Sage’s best practices refined over thousands of software deployments.

You don’t need to talk to anyone in sales or jump through any hoops to get started.

Everything you need to start getting value from the software is available right out of the box, for frictionless growth through IPO and beyond.

Sage for SaaS and Technology streamlines the journey to IPO

These days, higher interest rates and cutthroat competition mean that your startup’s IPO journey will be an uphill battle without the right tools.

Sage for SaaS and Technology can help your company achieve frictionless finance automation to scale through IPO.

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