It’s hard to exaggerate how important a talented, committed, and motivated workforce is to a SaaS company’s success. And at the moment, that’s a problem.
Cash is King for SaaS now, more than ever
With startup investment dwindling, some SaaS companies, even the high growth ones, are so concerned that they’re laying off workers. Many are implementing hiring freezes, or struggling to make the competitive offers required to hire the talent they need in order to keep on growing.
Raising the growth capital needed to retain and recruit star workers is proving tough, and SaaS brands are rightfully wary of trading away equity on unfavorable terms in order to generate money for payroll.
What happens now?
One smart option is to leverage your fintech companies to gain access to non-dilutive forms of capital. With advances in payment technology, today’s fintech vendors can analyze SaaS brands’ portfolio of customer contracts, gleaning insights into subscription longevity, reliability, and performance.
Armed with this rich data and insights into recurring revenues, it’s possible to provide quick, flexible access to capital by delivering advances on contracts and revenue streams that are already locked in.
The ideal solution is where you can have your cake and eat it too - i.e. pass the cost of this financing on to your customers at the time of close. Even better, embed this into your sales process and it becomes a constant source of funding.
Agility is key
That provides companies with the agility to invest in talent on an as-needed basis, without turning to cumbersome equity or debt financing arrangements. Rather than waiting weeks or months for the money to be made available — as is often the case with conventional investment channels — cash is accessible within days, helping ensure employees are paid in full and on time.
It also makes it possible to keep your cap table intact — and keep more equity available for compensating employees or enticing star players to join your team. Instead of hitting pause on their recruitment efforts, or even beginning layoffs, companies can flexibly leverage their revenue streams to keep cash flowing and lock in the talent they need to grow.
Beyond the status quo
In the crowded SaaS marketplace, survival isn’t about maintaining the status quo. It’s about finding a path forward.
That’s especially important when it comes to hiring and retaining talent — so look beyond traditional funding channels, and start asking how your fintech stack can drive non-dilutive cash flow, and help you keep hold of your top talent as you find your path through these turbulent times.
Want to learn more?
Reach out to Ratio today, and learn how access to non-dilutive, fintech-enabled capital can help keep your business on the path to growth.