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["Saas Magic Number vs. IRR"]
[null,"David Brode",null,null,"www.brodegroup.com"]
[null,"(303) 444-3300",null,null,"dbrode@brodegroup.com"]
[]
["http://larsleckie.blogspot.com/2008/03/magic-number-for-saas-companies.html"]
[]
["Analysis"]
[null,null,null,null,null,"NPV and Magic Number give different signals"]
[]
[null,null,null,null,null,null,null,"Price =",{"$f":"SaasPrice","v":9}]
[null,null,null,null,null,null,null,null,null,"Discount Rate"]
[null,null,null,null,null,null,null,{"$f":"G56","v":"FN"},0.15,{"$f":"I12+0.05","v":0.2},0.25,0.3,0.35,0.39999999999999997,0.44999999999999996]
[null,null,null,null,null,null,"Churn",0.25,"FN","FN","FN",0,0,0,0]
[null,null,null,null,null,null,null,{"$f":"H13+0.05","v":0.3},"FN","FN",0,0,0,0,0]
[null,null,null,null,null,null,null,{"$f":"H14+0.05","v":0.35},"FN",0,0,0,0,0,0]
[null,null,null,null,null,null,null,0.39999999999999997,0,0,0,0,0,0,0]
[null,null,null,null,null,null,null,0.44999999999999996,0,0,0,0,0,0,0]
[null,null,null,null,null,null,null,0.49999999999999994,0,0,0,0,0,0,0]
[]
[]
[null,null,null,null,null,null,null,null,"Key"]
[null,null,null,null,null,null,null,null,"-  "," NPV and Magic Number Match"]
[null,null,null,null,null,null,null,null,"FP  ","False Positive"]
[null,null,null,null,null,null,null,null,"FN  ","False Negative"]
[]
[null,null,null,null,null,"Month",null,null,0,1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35]
["Basic Model"]
[null,"Customers"]
[null,null,"Customers",null,null,null,null,null,1,{"$f":"IF(MOD(J$26,12)=0,I29*(1-$G$30),I29)","v":1},1,1,1,1,1,1,1,1,1,1,0.8,0.8,0.8,0.8,0.8,0.8,0.8,0.8,0.8,0.8,0.8,0.8,0.64000000000000012,0.64000000000000012,0.64000000000000012,0.64000000000000012,{"$f":"IF(MOD(AK$26,12)=0,AJ29*(1-$G$30),AJ29)","v":0.64000000000000012},0.64000000000000012,0.64000000000000012,0.64000000000000012,0.64000000000000012,0.64000000000000012,0.64000000000000012,0.64000000000000012]
[null,null,"Churn",null,null,"%/year",0.2]
[]
[null,"Operating Metrics"]
[null,null,"Price",null,null,"$/mo",9]
[null,null,"COS",null,null,"% rev",0.2]
[null,null,"Customer Acquisition Cost (CAC)",null,null,"$/cust",150]
[]
[null,null,"Discount Rate",null,null,"%/year",0.2]
[]
[null,"Calculations"]
[null,null,"Revenue",null,null,"$",null,null,{"$f":"I29*$G$33","v":9},9,9,9,9,9,9,9,9,9,9,9,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016,5.7600000000000016]
[null,null,"COS",null,null,"$",null,null,{"$f":"I40*$G$34","v":1.8},{"$f":"J40*$G$34","v":1.8},1.8,1.8,1.8,1.8,1.8,1.8,1.8,1.8,1.8,1.8,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.4400000000000002,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004,1.1520000000000004]
[null,null,"CAC",null,null,"$",null,null,{"$f":"G35","v":150},0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0,0]
[null,null,"EBITDA (CF)",null,null,"$",null,null,{"$f":"I40-I41-I42","v":-142.80000000000001},{"$f":"J40-J41-J42","v":7.2},7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,7.2,5.76,5.76,5.76,5.76,5.76,5.76,5.76,5.76,5.76,5.76,5.76,5.76,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014,4.6080000000000014]
[]
[null,null,"Value"]
[null,null,null,"NPV",null,"$",{"$f":"NPV((1+$G$37)^(1/12)-1,I43:AR43)","v":17.736708952240384}]
[null,null,null,"IRR",null,"%",{"$f":"(1+IRR(I43:AR43))^(12)-1","v":0.32479120166630082}]
[null,null,null,"Payback Period",null,"months",{"$f":"G35/SaasPrice","v":16.666666666666668}]
[]
[null,null,null,"Revenue Stream Value (NPV)",null,"$",{"$f":"NPV((1+$G$37)^(1/12)-1,I40:AR40)","v":206.84364405171712}]
[]
[null,null,"\"Magic Number\" calculations"]
[null,null,null,"Annual MRR",null,"$",{"$f":"G33*12","v":108}]
[null,null,null,"Magic Number",null,"(none)",{"$f":"G53/I42","v":0.72},"Magic Number = Annualized Delta Revenue(n) / Sales & Mktg Exp(n-1)"]
[null,null,null,null,null,null,null,"Lars thinks Magic Number > 0.75 is good and < 0.75 is bad."]
[null,null,"Different Signal",null,null,null,{"$f":"IF(SaaSNPV>0, IF(G54>0.75,0,\"FN\"), IF(G54<0.75,0,\"FP\"))","v":"FN"}]
[]
[]
[]
[]
[]
[]
[]
[null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,{"$f":"U64+0.05","v":0.05},0.1,0.15000000000000002,0.2,0.25,0.3,0.35,0.39999999999999997,0.44999999999999996,0.49999999999999994,0.54999999999999993]