Sources & Uses Planning for 2023: Budget & Spend Management Considerations
For many institutional investors, the #1 priority for growth firms has shifted from revenue sales growth to capture market share at all costs to longer-term metrics such as R-Value and NRR.
R-Value is the percentage of combined profitability and growth rate (practically calculated as YoY growth + adjusted EBITDA profitability).
Gross Profit Net Revenue Retention (GPNRRR) is the percentage of ross profit recurring revenues retained from existing customers over a period of time (practically calculated as the gross profit from the recurring revenues for the existing customers after accounting for churn and revenue adjustments year-over-year).
As you plan for 2023 consider the following:
R-Value Impact on Valuation for B2B firms with North America HQs
Key takeaway: Determine your R-Value growth by each industry vertical, each product and by cueach stomer persona and plan S&M programs and spend accordingly.
Supporting resources about Value driven by planning around R-Value include:
OpenView – SaaS Benchmarks Report
SaaS Capital – 2022 SaaS Company Growth Rate Benchmarks
Forbes – Don’t pull the plug, shifting marketing in an economic downturn
2022 OpenView SaaS Benchmarks Report
Valuation driven by R-Value
If you can achieve 120% NRR: Your revenue doubles in 5 years even with no new customers
SaaS Capital Benchmarks
Value based Revenue Multiple Range of Value for private B2B tech-enabled and SaaS
