If you're putting together a budget or a business plan, you know the value of good industry benchmarks. Salary trends. Cost ratios. Productivity metrics. Sales commissions. Cash management. All those little details that you know can make or break a software company's bottom line.
The good news is, we've got exactly the numbers you need—in The Softletter Financial Handbook.
The Financial Handbook is a 300-page treasure chest of statistical reports and benchmark studies on software finance and operations. Here in one easy-to-navigate book you'll find dozens of separate surveys and reports on all kinds of software companies, public and private, with data that companies usually share only with the most trusted industry analysts.
And you'll find more than just raw numbers. We've drawn on our network of company managers and experts for a wealth of analysis, tips and metrics that will also help you develop smarter management strategies. You could spend years collecting this kind of savvy advice (just as we've done). Or you can browse the pages of The Softletter Financial Handbook—and get instant access to an invaluable knowledge base.
Benchmarks: Product Management Best Practices / 11
Benchmarks: OEM Contracts / 13
Benchmarks: Field Sales Compensation / 16
Benchmarks: Inside Sales Compensation / 18
Benchmarks: Sales & Marketing Staffing / 20
Benchmarks: Sales and Marketing, 2007 / 23
The Benchmark 50: Sales and Marketing, 2007 / 24
Benchmarks: Marketing Expenditures / 25
Benchmarks: Sales & Marketing Cost Ratios / 27
Benchmarks: Telesales Metrics / 31
Marketing Ratios / 34
Key Metrics: The Sales Pipeline / 34
On Measuring the Cost of Customer Acquisition 36
Benchmarks: Upgrade Pricing / 37
Benchmarks: Web Lead Generation / 39
Benchmarks: Electronic Software Distribution / 43
Trialware Conversion Rates / 45
Eight Ways to Measure Web Support / ROI 46
E-mail and Telephone Support Costs / 49
Profit Metrics for Professional Services / 50
Benchmarks: Services Margins and Contributions / 51
The Top 50: Services Margins and Contributions / 52
The Top 50: Profit Margins on Services / 53
Benchmarks: Services Contribution / 54
The Benchmark 50: Services Contribution / 55
Benchmarks: Services Margins / 56
The Top 50: Profit Margins on Services / 57
Benchmarks: Tech Support Cost Ratios / 58
Benchmarks: Revenue Per Employee, 2007 / 60
The Benchmark 50: Revenue Per Employee, 2007 / 61
Benchmarks: Operating Income Per Employee, 2007 / 62
Benchmarks: Return on Equity, 2007 / 64
The Benchmark 50: Return on Equity, 2007 / 65
Benchmarks: Operating Income / 66
The Benchmark 50: Operating Income / 67
Benchmarks: General & Administrative, 2007 / 68
The Benchmark 50: General & Administrative, 2007 / 69
Google Survey Part I: Google for Promotion / 70
Google Survey Part II: Google as a Platform / 72
Google AdWords Survey Results / 74
Benchmarks: Operating Income per Employee / 79
The Benchmark 50: Operating Income Per Employee / 80
Benchmarks: Research and Development, 2007 / 81
The Benchmark 50: Research and Development, 2007 / 82
Benchmarks: Research and Development / 83
R&D Ratios, ‘04-’06 / 83
The Benchmark 50: Research & Development / 84
Benchmarks: Research and Development / 85
The Benchmark 50: Research and Development / 86
Benchmarks: Research & Development / 87
The Benchmark 50: Research & Development / 88
Mergers, IPOs, and Venture Finance
SaaS In The M&A Arena / 90
Negotiating Your Non-Compete Agreement, Part I of III / 91
Negotiating Your Non-Compete Agreement, Part II of III / 92
Negotiating Your Non-Compete Agreement, Part III of III / 93
Q1 Analysis: M&A Hits New Record / 94
Working Capital—Its Role in Deal Negotiations / 95
Capitalization of Software R&D Choices 96
The 10 Second “What is My Company Worth?” Valuation / 97
Due Diligence: Get Ready to Meet the Buyer’s Every Request / 98
Preparing for the Sale: The Documents / 99
The Top Five M&A Deals of the Past Five Years / 100
Developing Solid Financial Projections / 101
Seller Beware—Outside Deal Funding Required / 102
What is a Recapitalization? / 103
M&A vs. IPO / 104
Protecting Your IP from Outsider (or Insider) Claims When You Sell Your Company / 105
A Valuation Model for Subscription Revenues / 106
What’s Your Company’s Value Multiplier? / 108
Why Deals Fall Through / 112
The 504b Option / 114
M&A Valuation Trends 115
What Drives Valuation Multiples? / 116
M&A Roundup: Valuation Multiples / 117
Software M&A Transactions: Q1 2002 / 118
The True Value of an M&A Advisor / 119
Angel Investors / 120
Legal Strategies: What to Expect and Who Pays, Part I of II / 121
Legal Strategies: What to Expect and Who Pays, Part II of II / 122
Earnouts: The Good, the Bad, and the Ugly / 123
When to Dig In Your Heels During Negotiations / 124
The Top 50: Software Venture Capital Investments—Q1, 2006 / 125
Asia Is Coming / 126
Asia Is Coming, Part II of II / 127
Preferred Shares: The Monster That Ate Your Deal / 128
Strategic versus Financial Buyers, Part I of II / 129
Strategic versus Financial Buyers, Part II of II / 130
Representations and Warranties Insurance / 131
Reps and Warranties: Vital to the Deal / 132
Why All the Focus on EBITDA? / 133
M &A: A Global Process / 134
Accounting Problems: Don’t Let Them Stop Your Deal, Part I of II / 135
Accounting Problems: Don’t Let Them Stop Your Deal,Part II of II / 136
Due Diligence Tips for Sellers, Part I of II / 137
Due Diligence Tips for Sellers, Part II of II / 138
When is the Right Time to Sell? / 139
If it Takes 8 Months to Sell, When Should I Begin Planning?? / 140
Exit Strategies: Think M&A / 141
Is My Company Too Small to Sell? / 142
The Ten Worst Things You Can Do / 143
When Selling Your Software Company, Part I of II / 143
The Ten Worst Things You Can Do / 144
When Selling Your Software Company, Part II of II / 144
Getting a Deal Done: Spousal Approval / 145
What Will Kill the Current Boom in Software M&A / 146
Deal Killers: What’s Wrecking Value Today / 147
The Power of the Minority / 148
Negotiation Tactics / 149
Passive vs. Active Shareholders / 150
How to Detect a Non-Negotiating Buyer / 151
Types of Statements That Can Spoil a Deal / 152
Escrow Provisions in M&A Transactions, Part I of II / 153
Escrow Provisions in M&A Transactions, Part II of II / 154
Using Strawmen in M&A Negotiations / 155
Tax Reduction Tactics When Selling Your Company / 156
The Art of the Earnout / 157
How to Structure an Installment Sale / 158
How to Negotiate an Asset Sale / 159
How to Sell a Small Services Company / 160
How to Sell Your Company When Shareholders Dissent / 161
What to Do When a Deal Falls Through / 162
How to Hang Onto Employees Through a Sale / 163
How to Deal With a Weak Balance Sheet / 164
How to Keep a Secret / 165
M&A Trends: The First Six months of 2004 / 166
Exit Strategies: M&A vs. IPO / 167
Working With International Buyers / 168
What Do Financial Buyers Want? 169
What Do Strategic Buyers Look For? / 170
On Negotiating a Technology License / 171
How to Avoid “Haircuts” / 172
The Role of Revenue Recognition / 173
Checklist: The Letter of Intent / 174
The Letter of Intent / 175
The Sarbanes-Oxley Effect / 176
How to Field an Unsolicited Offer / 177
The Devil Is in the Deal Structure / 178
Escrows and Holdbacks / 179
Escrow Agreements in the Age of SaaS / 180
Why Restricted Stock Is Risky / 183
How to Structure an Earnout / 184
ROI Calculators and Resources / 185
Patent Management Resources / 185
Are You the Big Dog in Your Vertical Market Niche? / 186
Outsourcing to India / 187
The Top 10 European Buyers / 188
The Top 10 US M&A Buyers / 189
When Your Sector Starts to Consolidate / 190
Not All Revenue Is Created Equal, Part I of III / 191
Not All Revenue Is Created Equal, Part II of III / 192
Not All Revenue is Created Equal, Part III of III / 193
Impact of the Sub-Prime Meltdown on Software M&A / 194
Yes, There Are Bad Deals / 195
Keeping Negotiations Secret, Part I of II / 196
Keeping Negotiations Secret, Part II of II / 197
Guy Art, Part I / 201
Guy Art, Part II / 203
Entrepreneurship: “Burn Your Business Plan” / 206
Why Angels Fear to Tread / 207
Creative Financing Tips From the Experts / 209
HOW MUCH CASH SHOULD YOU RAISE? / 210
HOW TO MANAGE INVESTORS / 211
HOW TO BUILD BETTER BUSINESS PLANS / 213
HOW TO STRUCTURE THE DEAL / 215
ADVICE FROM A MASTER PLANNER 216
An Insider’s Guide to Venture Capital Term Sheets / 218
Venture Capital Directories / 219
Benchmarks: Q1 2008 Venture Capital Investments / 220
The Top 50: Software Venture Capital Investments—Q1, 2008 / 221
Benchmarks: Q4 2007 Venture Capital Investments 222
The Top 50: Software Venture Capital Investments—Q4, 2007 / 223
Benchmarks: Q3 2007 Venture Capital Investments / 224
The Top 50: Software Venture Capital Investments—Q3, 2007 / 225
Benchmarks: Q2 2007 Venture Capital Investments / 226
The Top 50: Software Venture Capital Investments—Q2, 2007 / 227
Q1 2007 First Time Deals: Top Three Categories / 228
Benchmarks: Q1 2007 Venture Capital Investments / 228
The Top 50: Software Venture Capital Investments—Q1, 2007 / 229
Benchmarks: Q4 Venture Capital Investments / 230
The Top 50: Software Venture Capital Investments—Q4, 2006 / 231
Benchmarks: Q3 2006 Venture Capital Investments / 232
The Top 50: Software Venture Capital Investments—Q3, 2006 / 233
Benchmarks: Q2 2006 Venture Capital Investments / 234
The Top 50: Software Venture Capital Investments—Q2, 2006 / 235
Benchmarks: Q1 2006 Venture Capital Investments / 236
The Top 50: Software Venture Capital Investments—Q1, 2006 / 237
Benchmarks: Q4 Venture Capital Investments / 238
The Top 50: Software Venture Capital Investments—Q4, 2006 / 239
Benchmarks: Q3 2005 Venture Capital Investments / 240
The Top 50: Software Venture Capital Investments—Q3, 2005 / 241
Benchmarks: Q2 2005 Venture Capital Investments / 242
The Top 50: Software Venture Capital Investments—Q2 2005 / 243
Benchmarks: Q1 2005 Venture Capital Investments / 244
The Top 50: Software Venture Capital Investments—Q1 2005 / 245
Benchmarks: Mergers and Acquisitions / 246
Benchmarks: Q4 2004 Venture Capital Investments / 249
The Top 50: Software Venture Capital Investments—Q4 2004 / 250
Benchmarks: Q3 2004 Venture Capital Investments / 251
The Top 50: Software Venture Capital Investments—Q3 2004 / 252
Benchmarks: Q2 2004 Venture Capital Investments / 253
The Top 50: Software Venture Capital Investments—Q2 2004 / 254
Benchmarks: Q1 2004 Venture Capital Investments / 255
The Top 50: Software Venture Capital Investments—Q1 2004 / 256
Benchmarks: Q4 2003 Venture Capital Investments / 257
The Top 50: Software Venture Capital Investments—Q4 2003 258
Benchmarks: Q3 2003 Venture Capital Investments / 259
The Top 50: Software Venture Capital Investments—Q3 2003 / 260
Benchmarks: Q2 2003 Venture Capital Investments / 261
The Top 50: Software Venture Capital Investments—Q2 2003 / 262
Benchmarks: Q1 2003 Venture Capital Investments / 263
The Top 50: Software Venture Capital Investments—Q1 2003 / 264
Compensation
How to Make Profit Sharing Work / 266
Benchmarks: Employee Benefits / 267
How Microsoft Measures Employees / 268
How to Structure a Comp Plan / 269
Climbing the Incentive Ladder / 271
Incentive Plans: “Punished by Rewards” / 272
Severance Stats: What’s the Going Rate? / 273
The Devaluation of Options / 274
Options Grants by Job Title / 275
How to Structure a Sales Comp Plan / 276
Recruiting: It Matters Where You Look / 277
Benchmarks: Chief Executive Officer Compensation, 2007 / 278
The Top 50: Highest Paid Public Company CEOs, 2007 / 280
Benchmarks: Chief Technical Officer Compensation, 2007 / 281
The Top 50: Highest Paid Public Company CTOs, 2007 / 283
Benchmarks: COO Compensation / 284
Benchmarks: CMO Compensation / 286
The Top 50: Highest Paid Public Company CMOs / 288
Benchmarks: Chief Sales Officer Compensation / 289
The Top 50: Highest Paid Public Company Sales Executives / 291
Benchmarks: Chief Financial Officer Compensation / 292
The Top 50: Highest Paid Public Company CFOs / 294
2003 Programmer Salary Trends / 295
Benchmarks: Tech Support Salary Trends / 296
Data Points: Marketing Salaries / 298
Data Points: Board of Directors Pay / 299
Benchmarks: Board of Directors Compensation / 300
Benchmarks: Product Manager Compensation / 301
Benchmarks: Requirements Manager Compensation / 303
The 2007 Softletter Sales Efficiency Survey: Summary Results / 305
The 2007 Softletter Sales Efficiency Survey: Detailed Analyses / 311
The Softletter 2007 Sales Efficiency Survey: Close Rates / 314
Benchmarks: Detailed Enterprise and SaaS Sales Analyses / 315
The 2007 Softletter Telesales Efficiency Survey: Summary Results, Part I of II / 317
Valuing Options While Running the Compliance Guantlet, Part I of II / 323
/ Valuing Options While Running the Compliance Gauntlet, Part II of II 326
Operations
Endangered Environments / 329
Pricing and Value Approaches for Embedded Software / 331
Non-Recurring Engineering, Part I of II / 333
Non-Recurring Engineering, Part II of II / 334
Minimizing Online Sales Fraud / 335
Increasing Q&A Costs Squeeze Bottom Lines, Part I of II / 336
Increasing QA Costs Squeeze Bottom Lines, Part II of II / 337
The Micro-ISV Father Discusses the Kids / 338
RIM vs NTP: The Fallout / 341
Disadvantage: Microsoft / 344
Automating Your Product Management Processes / 345
Building a Balanced Executive Team / 348
What’s Your Business Innovation IQ? / 351
On Reinventing the Company / 354
How to Survive Financial ‘Peaks and Valleys’ / 356
A Growth Strategy Roadmap / 357
The Growth Imperative / 360
The Science of “Meaningful Marketing” / 363
“A Fundamental Change in Economics” / 364
Six Rules for Sustained Success / 365
Do You Have the Right Number of Employees? / 368
Commentary: Squeeze Play / 369
How to Become a Productivity Superstar / 370
How to Plan for Profits / 372
How to Get Paid Faster / 373
Cash Management: Who Gets Paid First? / 374
Benchmarks: Days Sales Outstanding 2004-2006 / 375
The Benchmark 50: Days Sales Outstanding, 2004-2006 / 376
Travel Cost Ratios / 377
Cost-Saving Tips From the Experts / 378
HOW TO SAVE ON SALES & CUSTOMER SERVICE / 381
HOW TO SAVE ON TECH SUPPORT / 382
HOW TO SAVE ON PRINTING & PRODUCTION / 383
Office Rentals / 384
How to Break (or Bend) a Lease / 385
The Soft•letter Occupancy Cost Survey / 386
Telecom Cost-Savings Tips / 389
On Trimming the SKU Count / 391
How Microsoft Tamed the SKU Explosion / 392
The Art of Small-Scale Manufacturing / 393
Shopping Cart Abandon Rates / 395
Why Web Stores Lose Money / 396
Why Upgrade Campaigns Bog Down / 398
On Two-Dimensional Pricing / 400
The Psychology of Pricing / 403
The Rebate Recoil / 404
Pricing Strategies for Software Bundles / 405
How to Price Support Contracts / 406
A Service Pricing Checklist / 408
How to Structure a Usage-Based Pricing Option / 410
On Keeping Discounts Under Control / 411
Eight Ways to Raise Prices / 413
Five Pricing Pitfalls / 415
Channel Optimization: Are You Giving the Channel Too Much? Part I of II / 416
Channel Optimization: Are You Giving the Channel Too Much? Part II of II / 418
Rebates vs. MDF / 419
Keep Microsoft’s Pricing Changes in Perspective / 420
The Economics of Subscription Software / 421
How to Account for Services Revenues / 424
ASP/SaaS Pricing Models, Part I of II / 425
ASP/SaaS Pricing Models, Part II of II / 428
New Rules on the Road to Revenue Recognition / 431
Comeback Kid: SaaS Comes off the Canvas / 434
Software Cost Estimation / 437
The Hidden Cost of Capital / 438
What’s Your Financial IQ? / 440
CardFile: Software Finance & Accounting / 440
The Softletter/Prolexic Website Security Survey, Part I of II / 442
The Softletter/Prolexic Website Security Survey, Part II of II / 444
Return Leaders: Conversation With the Founders: RightNow Technologies / 447
