ARR waterfalls

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In this chapter, we begin our walkthrough of the SaaS business we’re studying. In the first lesson, we do a quick overview of the materials we’ve been given on the company (e.g. sample VC or Private Equity interview case study). And after that, we jump into our first piece of analysis … so-called “ARR Waterfalls.”

Understanding customer size dynamics Throughout the historical period, you might notice that the company’s “New Customers” have an ARR of around ~$85k. Given this, You might ask, how is the company able to grow the average size of its customers (“Ending Customers” start at $93k of ARR and increases to $141k of ARR by Dec-22)?

In this lesson (and those that follow), I work from the case study & materials described in the “Start Here” sections. Please review those if you haven’t already and you’d like to follow along.