Yash Sharma: Building an Acquisition-Ready SaaS Company From a Finance Lens #237 | SaaS District

Hello, hello everyone. This is your host, Akeel Jabbar, and welcome back to another episode of SaaS District. In today's episode, we'll be talking about how to build an acquisition-ready SaaS company from a financial lens. Today we have our guest Yash Sharma joining us. Yash is the founder of Total Financial— Finance Resolver, which is a boutique financial intelligence firm serving SaaS founders, VCs, and private equity operators. He specializes in building investor-grade FP&A systems, valuations, and acquisition readiness frameworks for scaling SaaS companies, which we'll get into today. His firm also performs AI-driven financial and technical due diligence for VCs, and PE funds, and he helps investors assess revenue integrity, product scalability, and operational risk with greater speed and accuracy. His focus is really on helping SaaS companies turn fragmented financial data into disciplined, decision-ready clarity for fundraising, M&A, and long-term growth. So welcome, Yash, super excited to have you on the show today.

Thank you, Akeel, thank you so much for the invite. Like, I really, I really was looking forward to it, and Given that, you know, that we also have the similar roots and where we want to have a mark in this world, especially in this sector that we are, it is very crucial for us to, you know, at least have so much information out that the hurdles for people who are building great products and want to scale and want an exit, it should come to their mind that, you know, if somebody with a product, you know, that isn't that good with them could take an exit, so we Why can't I do it? Where am I going wrong? And we're here to answer those and have a framework of how to do it in a very strategic way where investors— it depends on how investors look at you and not how you present the opportunity to them. So we have to shift our lens from an investor perspective here if you really want to be acquired or take an exit.

Love it. Yeah, super, super important parts. And I think most founders are not thinking about this when they're building a product, right? They're so excited about building and maybe they think about an exit, but they're not really strategizing it part of their day-to-day or part of their daily plan. So maybe you can start off with sharing maybe where do, you know, SaaS founders most commonly— let's start with their runway, right? Where do they misread their runway, get into their financials, and why does this mistake usually appear only during scaling? Let's talk about that first.

Yeah, surely. So I kept seeing this trend a lot, you know, that SaaS companies were doing very good with their products, had a lot of traction, and the logos were sticking too. But one thing, you know, when they went for talks for an acquisition, it was something that was flagged. It was financial credibility that was at risk. And this in turn hurts a lot of people, but it is, you know, the harsh reality that you could build a good product, you have people sticking to you, but you cannot, you know, force an investor to buy you out. You would have to be there with the metrics that they want. Because a private equity or, you know, even a large firm who wants to acquire you has got a lot of decks on their table and he has to just choose one out of them. He's not going to choose every in that particular segment. So that is where it depends that how you present this opportunity. And coming to runway, I would say to founders these days, they think runway is pretty simple. It is simply the cash that you have in terms of your availability. Divided by the burn. It is a simple calculation, but something that is very crucial and what undermines, you know, has significance, importance, is that people thinking of runway just looks good on paper. Okay, fine. But timing is something that is very significant here. And when I say timing, the timing mismatch per se, I would say just, you know, There are a lot of metrics that actually help you optimize your runway, but people usually think that whatever they have on their books is doing pretty good. It builds a false sense of reality, which is not true. For say, deferred revenue, I would start with.

Mm-hmm.

So the revenue is actually, I would say that whatever deferred revenue you have, it's in the future, but whatever bills you have to pay today, It takes off from your account today. So you need to track it just not on a very basic level that it shows on your Excel that, okay, we have this much revenue that is deferred, so we could last so much longer. But that is not the case because the timing mismatch is here, something that plays a very crucial role.

Mm-hmm.

Cash comes in really early for deferred revenue, but the time it takes to service that product for delivery, that is really longer than what the cash can last. And this creates a demand for future cash. What do you do in such a situation? Do you raise a bridge? Do you raise another round? Given your situation, if you have a very small runway, the investors are going to act like a shark knowing that you have just 5 months of runway. They're not going to give you the multiple that you desire. Because they know your vulnerability, they've seen the books. And they've been doing it day in, day out. Another metric I would say that people overlook, which has usually been the case from '21 to '24, growth at all costs. Now VCs are very sensitive to burn multiple. Okay, I'd give you money to scale, but how much are you going to burn to actually create value? At what rate?

Mm-hmm.

So if you think that you can have a lot of headcounts and that will in turn extend your runway, then you're a little mistaken there because when you hire somebody, you hire them today. The recruiting, the training, all these costs take off from your bank today. But the time it takes to materialize the outcome from them through training until the time they get to know your firm and start to produce results, this again has a lag. Maybe it takes someone 5 to 6 months. to adjust for training and everything to start producing results, but you have to pay them every month. So what do you do in such a situation? You again have got the lag that people do not see. They overlook that. Okay, if I hire 10 people in sales today, this is my revenue, it might grow by 10. But that is not the case. It doesn't drive immediate results, but it does drive immediate cash outflow from the bank.

Mm-hmm.

And then CAC typing, like in terms of CAC timing, I would say people overlook something that is, I would say, very basic in nature. So they have this average CAC, you know, as a formula they would see on their spreadsheet and see and tell their investor that this is my CAC. But your investor already knows what is the median, what is the average of the industry. You do not know that because you're not a finance guy, maybe. You're not there actively scouting for acquisitions, but this guy knows it. And now he has to choose which one has a very good, efficient CAC, you know, that promises. So here I would say that CAC, that is a very general, vague calculation, could be a vanity metric because it masks a lot of inefficiencies. For say, if you're using a marketing channel that does consume an equal budget, but does not produce equal growth. You again have a lag here. These are the things that you need to overcome to think of how runway actually matters. And this is just not it. Apart from this, I would say the issue isn't math, it's timing accuracy that is fundamental.

Hmm.

You could have very good pipeline on your HubSpot and et cetera. But if you have flagged it, you know that this is going to convert in maybe 60 days, but it takes 150 days to convert. You cannot put it as a deferred revenue. You just have a deal in pipeline and there's a chance you overstate your buyer that these are the deals in the pipeline, but they have not materialized. And even if they materialized, your net payment cycles wouldn't do justice to it. These are the things that they actually look for.

Yeah, all interesting things to think about, right? I mean, we're always thinking about, you know, growth and some numbers and metrics that maybe represent, you know, internally some type of growth and comfort and safety. But the raw truth is You have to look at timing as part of that in terms of when does the money actually come in and when does it actually come out. So what does maybe like a CAC to LTV— yeah, like a CAC to LTV ratio, I think that's a common metric, you know, I think investors pay attention to. What's a number that you see that people like to see and that are attractive for investors?

I think from a VC's point of view, something that has like under 18 months is a good number. Mostly. But if it goes beyond that, it depends on your stage, how many active participants are actually okay with that number that you have. Or say if you're already backed by a big firm which trusts these numbers, that you have the efficiency that you could optimize it for a better number, then you go ahead with it. And the new founder, like the new investor that comes in would be okay that, okay, like Sequoia already trusts this guy for what he's doing and We could also play a bet on him seeing the efficiency. But if you don't have that kind of trust with the board, it is not going to work out for you. So keeping these, if you optimize, you know, just through very small things. So recently we did a case study where we audited top firms in AI in the Bay Area. And something that was very surprising to us as a figure was that all these firms that are into AI, They know that VC sensitivity towards, you know, burn multiple and the GPU computing costs. So these numbers are heavily optimized. Everybody's, you know, going for a hunt for these numbers, how to optimize these, and they've done a fabulous job there. But something that got missed out was a non-compute OpEx cost.

Hmm.

It had 9 to 12% of gap that could be optimized for a firm like Perplexity. That is $10 million. It could easily, you know, give you a higher valuation when you're going for your IPO. So that is a difference people usually, you know, if you're focused on one metric, you are going to get very good at optimizing that, but it has to be the balance factor.

Right.

Because just not one metric decides your books, your outcomes, your valuation. There's a chance that the other metrics could compress your valuation in the upcoming rounds.

Absolutely. So it sounds like you've reviewed and you've built many, many financial systems for SaaS companies. Why don't you maybe share, if you consider some of the top misconceptions that founders have about their metrics? I know you may have shared some, but maybe if you can go a little bit deeper on that.

Okay. I would say like the first one to start with is the miscomprehension. They trust that they're not the people who think that they do not have the problem with the metrics, I would say, being very honest, but the metrics are good, but they overtrust them. That is a very fundamental issue here. Or say they have a net revenue retention here, but without a cohort analysis, it hides a lot of churn of the underlying customers.

Right. Right.

Similarly, as we mentioned, CAC payback, it does. If it's blended, it is going to hide a lot of, you know, operational efficiencies versus inefficiencies. Whether if you're, of course, say if you're a SaaS that is into B2B, you have an equal distribution of marketing spend for LinkedIn and Instagram, then you'd see that, you know, the same budget on LinkedIn is giving you a lot of, you know, long-term customer deals, that is enterprise deals. But Instagram, it is maybe, you know, just giving you logos that are under high churn, but it comes under one number on an average of CAC payback, which does not really work here. So if you look into the nitty-gritties of that, where you actually go deep into your metrics and see what is something that fuels growth versus what is something that breaks it, is going to be the key factor here.

Yeah. I think the cohort analysis is super important. I think a lot of founders underestimate that. They just look at their overall churn rate rather than breaking out their segmenting their churn rate by their market. Maybe it's mid-market, lower market, and they can see like a big difference of where to focus and where the churn is actually coming from and which channel, for example, as well. What does maybe an investor-grade finance function actually look like? And maybe how can a founder start building one quickly today? What would you suggest to them?

I'd say you do not need to go for a very expensive hire for a corporate finance lead if you're doing A revenue that is, you know, $5 million in ARR. I do not know what your conversion, cash conversion cycles are, but I would just take a random, you know, rough ballpark figure that you're able to at least convert 90% of it in the same year. So if you're doing somewhere around $4.5 million that is in cash, you cannot afford a single guy who's your VP of finance that starts from a base level salary of $180K to maybe $320K. And then the usual rule of thumb, looking at the 401 and the insurances, the employer tax and everything, the paid leaves, it, you could easily add up 30 to 35% on that. So what might look, you know, that I hired a guy for maybe $250K doesn't look the same anymore. It starts to get towards the level of $320K, $350K given everything. And if a VP of finance comes in, he's also going to cost some equity.

Mm-hmm.

So it's a lot of things. So I would say, do not do something that traditional that does not fuel your growth. I would say the playbook has gone because now if you see that Manus today got acquired by Facebook and it has a very lean team.

Mm-hmm.

And that is something people should take a lot of inspiration from that you could stay lean, outsource a lot of work and still be heavily efficient because now you're focused on your core competency.

Mm-hmm.

And you're not getting into things that does not bother you on a day-to-day level because that could be taken care of in the background. So I would say to start with, in these figures of how to build a great invest-to-create financial model, it would start with something like for cash visibility. It is a no-brainer. It is a non-negotiable. You need to have cash visibility with 13 weeks of rolling cash flow forecast. And this is really important because it has the fine line between hope and reality. It actually tells you where you are versus what you think in your mind, because I've seen this a lot of times. Founders don't check their bank accounts every day. They're too consumed with day-to-day activities.

Absolutely.

And by the time on a quarter or even monthly when they check their bank, It doesn't help them at all. It gives them sleepless nights. So you could avoid them by being very realistic about your cash forecast and the 13-week model helps you because you're forecasting it into the future and not just, you know, having historical data. This is where finance and bookkeeping differs.

Mm-hmm.

Another I would say is something unit economics. Again, cohort-level unit economics, be it if you're in AI, go for GPU cost computing. Look how much does your average headcount produce for you. Do it for revenue as well, that what are the segment-level deals that you have, what are the enterprise deals that you have. And computational costs are very important for AI firms here because it determines how efficient you are when one token is getting used. And this is something that helps you in the long term when you want to get acquired. This is something I would say is a financial discipline. It helps you stay in place where you want to be without the anxiety that I'm going to an investor meeting today. Am I confident with the numbers?

Right.

So this, and I would say if your model cannot survive a downside scenario, it isn't a model, it's a story. And it's almost as good as wishful thinking, I would say. Because you need to be prepared because these downside scenarios actually help you. You know, it's like a sailor who's prepared to take care of the currents if, you know, it's going to overthrow the boat itself. This is something that is very important for them. Most deals don't actually collapse very loudly. I've seen this, you know, the silence answers it all.

Absolutely. Yeah. I mean, we're really focused on, you know, the growth and the optimism, right? But there's also the presenting the risk and the reality of the risk and the downsides. I think that's also equally important because Because yes, it's easy to get excited about the upside and the opportunity here, which is great. It's part of the story of what we're selling and looking to raise. But you're right, it's also presenting the real risks and how it's presented. So maybe you can share what are some patterns that you see that SaaS companies maybe that fail or that delays them in fundraising because of some of these financial blind spots and going into these conversations?

Okay, there are many, but I would start with the the top 3, which are very much detrimental. So what we've seen when we talk to the VCs and we're talking like, he says that, Yash, I have a very good company that we could close. And just 2 weeks later, I asked them that, how did it go, David? What happened? And he would just say something like that. There was a lot of inconsistency from the team in terms of communication relating to the ARR. Every conversation, the ARR keeps on switching. If you plant a seed of doubt today, the doubt is only going to bring you the fruits of doubt and it compounds.

Mm-hmm.

Another one I would say is something forecast variance. You need to keep that track record that your forecast says that you could achieve this number. You don't have a very strong variance regarding it because it shows that what your capability is and how much you talk about it. That is the real difference of where you want to be and where you are. So keeping that in track is very important. I would say to not have, you know, promise somebody, an investor, like really big forecast that I'm doing $1 million ARR today. And if you, you know, punch in $3 million into it and maybe we could do $6 million, $9 million, something like that. That does not happen. You have to be very realistic because he's going to see it. through your forecast and your variance. And variance is not going to lie. It's a litmus paper test that what you say, what you deliver. And if the variance— you've seen that a lot of firms that had a variance over 18 to 23%, they got caught with a good investor, but the deal broke through because they knew that, you know, these guys are good, but they're not what they're talking about. So maybe not today, maybe a year later, because investors underwrite predictability here. They're not going after your speed. They need to know that if you burn, what is the rate and what is the growth does it provide?

Absolutely. So if a founder maybe today is looking to prepare for an acquisition going into next year, right, 2026, they're in conversations or thinking about being acquired. And they understand that that's part of, you know, they're going to get into some due diligence. What should they fix firsthand inside their numbers today? What should they think about?

Revenue integrity, the quality of earnings, you know, puts a very simple and a very strong figure in front of somebody that, or say if a VC already has a portfolio where there's a lot of enterprise deals, but he wants to mitigate this risk with also, you know, new logos or not going for enterprise deals. So if you have that and he wants that, it could get, you know, into a place where you have a meeting spot and the deal could get transferred. But if even that, if he's looking for such logos, and even if that has very high churn, it simply means there's something wrong with your product or you've priced it in a way where it's very easy to switch. Just to give you an example, for a product that is at $2,000, And switching from that product is not very easy. A product that is priced at $50 is very easy to switch because you'd get a lot of different segment providers in that particular product. So also one thing which we see that is not focused upon, just to catch up upon as a metric that investors look for, and the founders usually go for pricing of their product. that is in sync with their industry standard. Here it becomes a key issue. Does it do justice to your contribution margin? For every product that you deliver, does the variable cost— is it covered for you? That is something you cannot, you know, just have your pricing. If like OpenAI prices it at $10, I want to price it at $10. OpenAI is sitting on billions of dollars to burn. Maybe they could burn for the next 2 years. You do not even have a runway of 10 months, you cannot price a product like that.

Right. So being real with your pricing and comparing to what's actually out there in the market.

Exactly, because eventually you're just selling vanity metrics to investors that, you know, we have this growth and this is how much we want to achieve. But at that product pricing, either you're competing with a giant who's giving a product at that price and there could be a churn, or even if you're margin contributions are not provided by them. Again, you're burning more than you should. So optimize your pricing looking at that particular figure and not go for industry metrics because industry is not going to pay your bills. They're not going to take you out when you're bankrupted or filing for liquidation. Your optimization in your own metrics is going to sail you and take you where you want to. And this is something that we've seen with ClearBooks, as I said. for revenue integrity, forecasting accuracy for variance. What matters here is that we've seen a lot of firms doing $8 million in ARR getting sold at a multiple of, you know, 7 to 8, but a firm doing $25 million in ARR got sold for maybe 4 to 6 in multiple. The difference lies in, you know, at a certain point, numbers matter more than the narrative itself.

Mm-hmm.

So if—

You can't hide, the numbers don't lie.

Exactly. Yeah. Also, you just fill the due diligence test, as simple as that. And it does not take long for them to know. Plus, you've given them a pattern recognition tool for the next call.

Absolutely. This has been great, Yash. I appreciate everything you've been sharing here. I think super helpful. Last question before we get into the personal rapid-fire questions. Maybe any suggestions you'd like to share with SaaS founders going into 2026 using, you know, maybe AI to help them maybe get better valuations if they're planning an exit or to raise capital?

Okay. Just to give you— shed some light on how we've been looking at these things. So we've been working with a lot of VCs actively where we conduct the AI due diligence for them. The reason is most VCs, you know, even if they're Harvard graduate, Columbia, or, you know, Oxford, The reason here is that they haven't read a line of code and a founder might walk in, give a very beautiful pitch that this is what the product does. This is very scalable. But if the VC does not understand the line of code, so just to give you an example, if it's hardcoded, it's not scalable. If it has got a lot of model dependency, then a slight change in pricing from the model, maybe you're using Claude, Sonic, you're using Gemini. or maybe you're using DeepSeek, Groq, or OpenAI, a slight changing in pricing could, you know, take you to the ruins. So the risk here is a lot. And this is how we flag. We have a whole framework of mapping these and we do it and tell the VC, look, that if you invest in this, this is the risk factor here. But if you're looking for short-term, long-term, it depends on how you want to have the risk perceived versus how you want to invest into that firm. And if it's something that is very risky, we just straight up say that. Instead of putting $2.5 million or $3 million in a round there, don't do it. As simple as that. And we work on retainer models with them so it doesn't hurt them as well, because if you've been able to save somebody $2 to $3 million there, it is worth a lot than the retainer.

Definitely.

Plus, you know, getting tied to a stuck deal where there's no future potential, whether the next raise is going to be a bridge round, an upper valuation round, or maybe a down round. Nobody knows. And the liquidation again comes into effect. You know, you put something like $3 million into that and then you have to look in the market that who's going to be the next buyer who's going to take my equity out and give me the exit. So it brings a lot of risk there.

Love it. Super, super, super helpful. And thank you. Thank you, Yash. I appreciate this. Let's get into the rapid-fire questions. Ready?

Okay, surely.

All right, Yash, what's, uh, one activity you enjoy outside of work that gets you into a flow state?

Meditation.

Meditation, love it. What's one piece of advice you wish you had known and you would tell your younger self today? Let's say your 25-year-old self.

I'd say you'd make it.

I like it. Encouragement. Don't worry, nothing to worry about. What are some of the biggest challenges and maybe goals that you're facing, you know, with Total Finance Resolver, or maybe most excited about, about your business going into 2026?

The challenges that we're facing currently is the market is still running on a very traditional model, right, where you hire a whole team which has a high churn. So if you hire somebody who's like You hire 3 people and one of them gets a job for a better opportunity. Like if you hire a senior analyst and he's getting a VP position at another firm with some equity, you're under high churn there. And if he leaves, he hasn't— the firm suffers from an institutional memory loss. With us in FP&A pods, that isn't the case. Even if 3 of 3 people from the pod goes out, the pod still stays and you wouldn't have institutional memory loss. And this builds credibility. And how it matters the most is faster decision-making that we help them enable.

Smart. Who or what are some of the best 3 resources— this can be books, mentors, or people you follow in the space— who you'd say have been most instrumental to your success over these last few years?

I'd say for mindset, it's Naval Ravikant. It's really great. And I do read a lot of books related to spiritual sciences. So I did read The Autobiography of a Yogi when—

Good book.

Like, yeah, exactly. So even when, you know, Steve Jobs died, this was a book that was given out on his funeral. So it holds a lot of relevance. Like, if you're finding yourself really down that the world is almost working against you, if you read that, just one chapter, you'd still find some way. That there's something good in this world.

Love it. Anything else? I guess too, I guess we got Naval, we got the autobiography. Anything else you wanna add?

Yeah, I do. Because I'm a football fan, I do take a lot of inspiration from Messi because he's had, you know, in a physical sport where you're having a growth immune deficiency where your hormones don't work for you and is still goated, it's not easy.

That's not easy. Yeah.

Yeah.

He made it live. He was in India a couple of weeks ago as well. Right. So interesting that he was there.

You did not even mention that. He was here in my hometown in Calcutta. That was pretty awful.

Oh yeah, yeah, exactly.

But in Mumbai and Delhi and Hyderabad, it was pretty good. But in Calcutta, where the major event organizer was there, it was just, it was pretty embarrassing for all of us. And Messi just left in 10 minutes, you know, just waving hi and he just left. He did not even meet the chief minister.

Like, oh wow.

I just don't know what to— yeah.

Yeah, it was a very odd, very odd experience. I wasn't expecting that. Yash, what does success mean to you today? That's the last question. Whether it's personally, business, financially, life, I guess there's no right answer.

I think having peaceful sleep at night. I struggle a lot with it because there have been times where I've worked 29 hours straight. Because I had that anxiety that if I don't do it today, I might not do it tomorrow and it will become a cycle. So yeah, I do think that if you're, if you're, if you're somebody who's getting really good sleep at night without any anxiety, that is something that, you know, I do desire a lot because it is a benchmark for me after building everything or nothing. If I'm being able to do that, yeah, I'm doing good in life.

Wow, that's a, it's a very good definition of success. Love it. Love it. Yash, where can founders, anyone listening in, VCs, PEs, anybody listening wants to get in touch with you? Where's the best way to get in touch with you and learn more about your company?

It's www.financeresolver.com, and I think the best way to reach out is either through the forms that we have or LinkedIn. I'm pretty much active there and I share a lot of content about SaaS Especially for, you know, new SaaS founders who've had it the very hard way of not having guidance through. So we do post a lot of content there to educate them. Like we post case studies of what the current market metrics is and are, and you could compare it to your firm that way. Do you stand and optimize all your metrics for that? And it eventually helps you keep the financial discipline that you need to get acquired or an exit.

Love it. That's good. So we'll place those— we'll place your website, your phone number, as well as your LinkedIn link on the show notes. So if anybody wants to reach out, make sure to reach out to Yash. Thank you so much, Yash. I appreciate you joining SaaS District today.

Thank you so much, Akeel. Thank you so much for inviting me here. I want to see you soon again when you land in India, or maybe on another podcast when you have something really crazy to talk about. And I hope to look forward to it. But yeah, I would be waiting for you to join me whenever you come in India. Absolutely. And we'd see that, you know, a lot of things have changed. And maybe when I'm there in Mexico or Canada or, you know, in the North, Northern America, just, you know, hit you up with it.

Absolutely. Look forward to it. Thank you, Ash.

Surely. Thank you so much. Thank you so much, Akeel.

All right. Thank you all for watching this episode and joining SaaS District today. Don't forget to like, subscribe, and hit the bell for future episodes. episodes where we interview top leaders in the SaaS industry. If you're a SaaS company looking to grow and unlock the true value of your business, get in touch with us at Horizon Capital and myself or one of our consultants will provide a free assessment to help you get there and hit your goals. If you have any feedback or suggestions for this podcast, please comment down below and help us improve our content for you all. Thanks again and see you on the next one. Bye.