Industry overview
What is shaping software
Software and SaaS companies live and die by product-market fit, pricing and retention. Users' real workflows matter more than feature lists.
- Product-led growth relies on fast time to value
- Pricing and packaging strongly affect conversion
- Churn often starts with onboarding
Client background
A SaaS company, working in India, with customers in the USA. Client identity is withheld to protect confidentiality.
- Organisation
- A SaaS company
- Sector
- Software
- Team engaged
- Finance & Accounts
- Services
- Due diligence & financial analysis, Financial modelling, Virtual CFO services
Client challenge
Investors requested detailed SaaS metrics and clean financials, and the company’s data was inconsistent. The founders feared that inconsistencies could delay the round or reduce the valuation. Investors had asked for detailed metrics, but billing, CRM and accounting data told different stories.
Research objectives
- Deliver on the brief: preparing a software company for investor due diligence.
- Establish accurate, reconciled numbers management can rely on.
- Put a reporting and compliance rhythm in place that runs on time.
Target audience
Scope: Three years of financial and customer data.
Audiences we typically reach in software
Trial and paying usersAdmins and buyersChurned customersProspectsPartners and integrators
Geographic coverage
Coverage: India, with customers in the USA. Markets: India and United States.
- India
- United States
Research methodology
A structured finance engagement: review the current process, set up controls, run the routine and report.
- 1Brief
- 2Vendor due diligence
- 3SaaS metrics review
- 4Insight
We reconciled revenue, standardised metrics such as recurring revenue and churn, and prepared a data room and due diligence report. We reconciled billing data with accounts, cohort by cohort, documented metric definitions and prepared answers to common investor questions about retention and unit economics. We documented every metric definition so investors could see exactly how figures were calculated.
Due diligence & financial analysisFinancial modellingVirtual CFO services
Sampling strategy
- Every ledger, entity and transaction stream in scope was covered, with sample-based checks during review.
Data collection
- Source documents, bank statements and ledgers were collected through a secure shared workspace.
Data quality & validation
- Maker-checker review on all entries
- Bank and ledger reconciliations
- Client approval before every filing or report
- Supporting documents kept for every figure
Data analysis
- Variance analysis against budget and prior periods
- Ratio and trend analysis
- Cash-flow view for management
Key findings
- Due diligence proceeded smoothly, and the company closed its funding round on schedule.
- The same metrics framework was adopted for monthly board reporting after the round.
Consistent metrics built investor confidence.
Recommendations
- Build on the core insight: consistent metrics built investor confidence.
- Keep the monthly routine and review exceptions with management every period.
Business impact
- Investors noted the clarity of the metrics in their final memo.
Impact is described qualitatively.
Deliverables & next steps
- Monthly MIS pack and reconciled books
- Compliance calendar and filings
- Repeat the measure after changes are in place to track progress.
- A natural follow-on question: why do customers churn?
Client identity is withheld to protect confidentiality.