SPENDING BENCHMARKS FOR PRIVATE B2B SAAS

COMPANIES
Based on SaaS Capital’s 2021 Industry Survey
 Funding Source
Median Spend by Company Funding Source Takeaways:
120%
• Bootstrapped companies are spending less (and are
profitable), while equity-backed companies are operating at a
loss to support a goal such as growth.
100%
21%
• The most dramatic differences include equity-backed
companies spending approximately 40% more on marketing, R
General and Administrative
80%
& D, and general and administrative costs while spending 82%
more on sales.
15% Research and Development
30%

Marketing Costs
• The increased spending by equity-backed companies on sales,
60% marketing, and R&D is somewhat expected. The difference in
21%
Selling Costs general and administrative costs is noteworthy. One possible
10%
explanation for why equity-backed companies spend more is
40% 7% Customer Support/Success the need for a robust administrative and finance team to
20% support reporting requirements to investors, including regular
11% Cost of Goods Sold (excl. Support/Success) board meetings and audits.

20% 11% 12% © 2021 SaaS Capital

15% 14%
0%
Bootstrapped Equity-Backed
 Spend by Growth
Median Spend by Higher Growth vs. Lower Growth Takeaways:
140%
• The difference between higher growth bootstrapped
companies and lower growth bootstrapped companies is
120% subtle. Higher growth bootstrapped companies spend
approximately 25% less on CoGS costs while spending
20% General and Administrative approximately 50% more on marketing.
100%

22% Research and Development • The reduced spend on CoGS is significant as it represents
inherent and intrinsic “free” growth from higher gross margins.
80% 31%
Marketing Costs In other words, higher gross margin companies naturally get
16%
15% “free” higher growth, or at least have “extra” cents per every
25% Selling Costs
60%
dollar of revenue to spend elsewhere (i.e., sales, marketing, or
14%
21% 22% R&D).
9% Customer Support/Success

40% 6% 9% 25% • The difference between higher growth equity-backed

19% Cost of Goods Sold (excl.
11% Support/Success)
companies and lower growth equity-backed companies is more
12%
pronounced. Higher growth equity-backed companies spend
20% 10% 12% 13% approximately 30% more on sales and approximately 55% as
11% © 2021 SaaS Capital
much on marketing vs. lower growth equity-backed
17% 12% 14% 14%
companies. The higher growth equity-backed companies spend
0%
approximately 10% less on general and administrative costs.
Below Median Above Median Below Median Above Median
Growth Growth Growth Growth
Bootstrapped Equity-Backed
 Spend by Company Size
Median Spend by Company Size Takeaways:
120%
• For benchmarking purposes, another metric by which to
compare your business to your peers is by revenue scale.
100%
20% • The chart to the left breaks spending levels down by company
23% size.
15% 20% 19%
General and Administrative
80% • For example, a typical B2B company with $3 Million to $5
20%
25% Million in ARR spends the following as a median percent of
Research and Development
30% 26% 26% ARR:
30%
60% 19% Marketing Costs • 19% on General and Administrative
10%
• 26% on Research and Development
10% 10% 10%
8%
Selling Costs • 10% on Marketing Costs
8%
40% 22% • 20% on Selling Costs
15% 20% 19% 14%
Customer Support/Success • 11% on Customer Support/Success
20%
• 12% on Cost of Goods Sold (excl. Support/Success)
14% 10% Cost of Goods Sold (excl.
20% 10% Support/Success)
10% 11% 13%

11%
15% 12% 11%
17% 17% © 2021 SaaS Capital
0%
Less than $1 $1 - $3 $3 - $5 $5 - $10 $10 - $20 More than
Million Million Million Million Million $20 Million
ARR
Spend by Company Size

© 2021 SaaS Capital

Spend by Company Size

© 2021 SaaS Capital

Spend by Company Size

© 2021 SaaS Capital

Spend by Company Size

© 2021 SaaS Capital

Spend by Company Size

© 2021 SaaS Capital

Spend by Company Size

© 2021 SaaS Capital

 About SaaS Capital
SaaS Capital was the first to offer lending alternatives to SaaS businesses based on their future SaaS Capital lends between
recurring revenue. Since 2007, SaaS Capital has deployed $234 million in growth debt to deliver
better outcomes for 70+ clients, resulting in $983 million in total enterprise valuation created. $2M and $10M
Benefits of our unique, SaaS-focused, approach: SaaS Capital is best able to assist companies with the
following attributes:
• Higher advance rates — Capital availability is based on a multiple of your monthly recurring • Sell a SaaS-based solution
revenue (MRR) – typically 4x to 7x MRR • $250,000, or above, in MRR
• History of renewals greater than 80%
• Capital availability that grows with your business — The amount of capital that you can draw • Headquarters in U.S., Canada, or the United Kingdom
increases as your revenue grows • Revenue growth above 15% per year

• Long-term source of capital — The capital is typically drawn down over 2 years under the Your business does NOT need to be:
committed line of credit, and then either renewed, or repaid over the following 3 to 4 years • Venture Backed
• Profitable
• Efficient use of capital — Capital is drawn down only as your business needs it, thereby reducing • Billing your customers monthly
your interest expense

• Cost is simple and transparent — interest rate of 11% to 12%, a 0.75% to 1.50% commitment
fee, and nominal penny warrant

• No balance sheet covenants or cash reserve requirements

ROB BELCHER | MANAGING DIRECTOR | RBELCHER@SAAS-CAPITAL.COM | 303-870-9529

STEVE JAFFEE | MANAGING DIRECTOR | SJAFFEE@SAAS-CAPITAL.COM | 614-506-2770