How to calculate financing capacity?

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Cash runway = Cash balance / Spending rate

If you are spending $10,000 a month and have a cash balance of $100,000, you have 10 months before you need to raise capital.

Why should you calculate the cash flow forecast?
Cash flow forecasting is a key measure of how much time you have left before you receive an investment or go bankrupt. This helps in several ways.

Making sure you have enough money to pay your employees, suppliers and other debtors
Plan departures to maximize runway and reduce expenses as needed
Budget allocation for necessary and beneficial activities
Effectively schedule fundraising activities
More importantly, knowing your cash flow helps you approach investors from a position of coo email list confidence, presenting an ambitious valuation. For example, if you are talking to an investor and you only have a week of cash flow left, you will have little confidence or negotiating power. In these cases, you may end up accepting an investment with a valuation much lower than what you are worth.

How to increase liquidity?
The easiest way to increase liquidity is to reduce spending. This can be accomplished by:

Eliminating waste, such as unnecessary subscriptions, extra office space, etc.
Reduce large expenses: Organizations often reduce the number of employees to achieve this.
Minimize discretionary expenses, such as travel, team outings, per diem, etc.
Be aggressive in collections and manage accounts receivable
Depending on who you ask, there are dozens of KPI examples to measure the right SaaS intent.

Investors may be interested in burn rate, burn multiple – the dollars spent to generate new net revenue –, the rule of 40, etc. Marketing KPIs would revolve around pipeline metrics such as lead-to-opportunity conversion rate, sales cycle length, activation rate, etc.

Finance teams might want to look at gross margin and net margin. HR would focus on average revenue per employee, average time with the company, employee turnover, etc. Customer experience KPIs revolve around net promoter score, customer satisfaction score, etc.

While all of these offer insight, not all of them are equally important for every type of SaaS business. Start with the ten Business metrics described above and make a list of everything else you want to track.