![Eric Andrews](/img/default-banner.jpg)
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Eric Andrews
United States
Registrace 15. 09. 2012
My goal is to teach you about finance & growth for scaling technology-enabled businesses.
You will learn how to build financial models for all different types of startups (eComm, SaaS, marketplaces, etc), break down unit economics metrics like customer lifetime value & customer acquisition cost, understand digital marketing/conversion tracking, and tons more. If you'd like me to cover anything specific - leave a comment - that's where I get most of my content ideas.
Most importantly, subscribe & join my newsletter so you don't miss out on any new videos!
You will learn how to build financial models for all different types of startups (eComm, SaaS, marketplaces, etc), break down unit economics metrics like customer lifetime value & customer acquisition cost, understand digital marketing/conversion tracking, and tons more. If you'd like me to cover anything specific - leave a comment - that's where I get most of my content ideas.
Most importantly, subscribe & join my newsletter so you don't miss out on any new videos!
Constellation Software Business Analysis | Finance Case Study
In this finance case study, I show you how Constellation Software has been valuing and acquiring hundreds of vertical market software businesses at bargain prices since the mid-1990s to build a $8B+ revenue behemoth. One-of-a-kind business, you won't want to miss it!
🚀 If you want to master the finance skills & frameworks to successfully scale technology startups, secure your spot in my "Finance for Startups" program, today: www.ericandrewsstartups.com/financeforstartups
Communities:
💼 Linkedin: www.linkedin.com/in/eric-andrews-1624b656/
☑️ Twitter/X: eric__andrews
🌟 Instagram: ericandrews_startups
🔥 Discord: bit.ly/discord_eric
💻 Newsletter: bit.ly/joinericnewsletter
🎥 Clips: czcams.com/channels/bM6zM3al9jZSyoRyJWQL-Q.html
Related Videos:
🚩 7 Most Important SaaS Metrics: czcams.com/video/9ViZZ4MZTPs/video.html
🚩 SaaS Financial Model Tutorial: czcams.com/video/C7S6lXu4NS4/video.html
🚩 Finance for SaaS Playlist: czcams.com/play/PLdoBuNNnCmdUQvTBTw4hB_Gp59i5mLmQZ.html&si=eWB7gGEr3p-8QcTs
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
In this video, we walk through the valuation framework that Constellation Software has been using to acquire low or even negative-growth vertical market software (VMS) businesses for the last 30 years.
We also model out how they re-invest their free cash flow into new acquisitions and build a projection for how quickly they might grow revenue and free cash flow over the next five years if they can keep this pace.
SECTIONS:
00:33 Constellation Software history & Mark Leonard - original business thesis on acquiring low-growth VMS businesses
1:55 Constellation Software business strategy, and valuation framework, hurdle rate targets, and example of valuation
4:22 hurdle rate targets & deal success rates
5:23 example valuation of three different businesses using Constellation Software hurdle targets
7:19 other interesting facts about Constellation - no earnings calls, no debt, never increased share count
8:15 unique executive compensation structure, organic growth rates, acquisition volume
10:08 revenue & free cash flow forecast for Constellation Software on how quickly they can grow if they keep re-investing all capital at historical multiples
If you have questions - leave a comment below and I'll try to help. Cheers!
#constellationsoftware #casestudy #financecasestudy #saas
🚀 If you want to master the finance skills & frameworks to successfully scale technology startups, secure your spot in my "Finance for Startups" program, today: www.ericandrewsstartups.com/financeforstartups
Communities:
💼 Linkedin: www.linkedin.com/in/eric-andrews-1624b656/
☑️ Twitter/X: eric__andrews
🌟 Instagram: ericandrews_startups
🔥 Discord: bit.ly/discord_eric
💻 Newsletter: bit.ly/joinericnewsletter
🎥 Clips: czcams.com/channels/bM6zM3al9jZSyoRyJWQL-Q.html
Related Videos:
🚩 7 Most Important SaaS Metrics: czcams.com/video/9ViZZ4MZTPs/video.html
🚩 SaaS Financial Model Tutorial: czcams.com/video/C7S6lXu4NS4/video.html
🚩 Finance for SaaS Playlist: czcams.com/play/PLdoBuNNnCmdUQvTBTw4hB_Gp59i5mLmQZ.html&si=eWB7gGEr3p-8QcTs
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
In this video, we walk through the valuation framework that Constellation Software has been using to acquire low or even negative-growth vertical market software (VMS) businesses for the last 30 years.
We also model out how they re-invest their free cash flow into new acquisitions and build a projection for how quickly they might grow revenue and free cash flow over the next five years if they can keep this pace.
SECTIONS:
00:33 Constellation Software history & Mark Leonard - original business thesis on acquiring low-growth VMS businesses
1:55 Constellation Software business strategy, and valuation framework, hurdle rate targets, and example of valuation
4:22 hurdle rate targets & deal success rates
5:23 example valuation of three different businesses using Constellation Software hurdle targets
7:19 other interesting facts about Constellation - no earnings calls, no debt, never increased share count
8:15 unique executive compensation structure, organic growth rates, acquisition volume
10:08 revenue & free cash flow forecast for Constellation Software on how quickly they can grow if they keep re-investing all capital at historical multiples
If you have questions - leave a comment below and I'll try to help. Cheers!
#constellationsoftware #casestudy #financecasestudy #saas
zhlédnutí: 960
Video
10 Subscription Box Growth Strategies You’d Be INSANE Not To Use in 2024
zhlédnutí 829Před 2 měsíci
I show you 10 of the most successful tactical growth strategies I'm seeing subscription box businesses use to achieve massive scale and increase customer lifetime values in this exclusive @eric_andrews x @OrdergrooveOfficial webinar recap. ➡️ Book a demo with Ordergroove ► www.ordergroove.com/eric/ (use this link or mention me to be eligible for 10% off your annual contract) Ordergroove powers ...
The ULTIMATE Subscription Box Financial Model | Part 2 of 2
zhlédnutí 1,2KPřed 3 měsíci
In part 2 of our subscription box financial model series, I show you how to build the full income statement, inventory forecast, and cash flow projections for your DTC eCommerce business. Free Excel template included. 🔥 Part 1: czcams.com/video/ZkOr_xy1rgY/video.html ➡️ Book a demo with Ordergroove if you want to learn how to build a $100mm recurring revenue DTC business ► www.ordergroove.com/e...
The ULTIMATE Subscription Box Financial Model | Part 1 of 2
zhlédnutí 3,5KPřed 3 měsíci
I show you how to build a subscription box financial model in Excel for your DTC eCommerce business. Free Excel template included. 🔥 Watch part 2 here: czcams.com/video/hHN90qypb2g/video.html 🔥 Subscription box strategy webinar here: czcams.com/video/_Y_aMwr_5P8/video.html ➡️ Book a demo with Ordergroove if you want to learn how to build a $100mm recurring revenue DTC business ► www.ordergroove...
How to Calculate Churn Rate | Subscriptions 101
zhlédnutí 3,4KPřed 5 měsíci
I show you how to correctly calculate churn rate for a subscription business. Free Excel model download included if you want to plug in your own numbers. ➡️ Book a demo with Ordergroove to take your customer retention and recurring revenue to the next level ► www.ordergroove.com/eric/ (use this link or mention me to be eligible for 10% off your annual contract) 👉 Follow Ordergroove on LinkedIn ...
How to Calculate CAC Payback Period for Subscription Businesses
zhlédnutí 2,2KPřed 6 měsíci
I show you how to correctly calculate the CAC payback period for a subscription business using cohort analysis. Free model download included if you want to plug in your own numbers. ➡️ Book a demo with Ordergroove to take your customer retention and recurring revenue to the next level ► www.ordergroove.com/eric/ (use this link or mention me to be eligible for 10% off your annual contract) 👉 Fol...
The Ultimate SaaS Unit Economics Tutorial
zhlédnutí 6KPřed 9 měsíci
I teach you why SaaS unit economics are so important and how to calculate the key metrics like LTV, CAC, payback period, and more. ✅ SaaS Unit Economics Template Download: mailchi.mp/ericandrewsstartups/fooyqcg5cp 🚀 If you want to master the finance skills & frameworks to successfully scale technology startups, secure your spot in my "Finance for Startups" program, today: www.ericandrewsstartup...
How to Calculate Net Dollar Retention | Finance for SaaS
zhlédnutí 3,1KPřed 10 měsíci
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Creating a Financial Model for a Talent Marketplace | Scaling to $1mm ARR
zhlédnutí 2KPřed 11 měsíci
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Unit Economics Benchmarks for eCommerce | From Idea to Exit
zhlédnutí 3,9KPřed rokem
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7 Most Important SaaS Metrics | Finance for SaaS Startups
zhlédnutí 9KPřed rokem
7 Most Important SaaS Metrics | Finance for SaaS Startups
How to Calculate CAC for Two-Sided Marketplaces
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Unit Economics Benchmarks for Two-Sided Marketplaces | From Idea to Exit
zhlédnutí 4,1KPřed rokem
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Unit Economics Benchmarks for SaaS Startups | From Idea to Exit
zhlédnutí 4,9KPřed rokem
Unit Economics Benchmarks for SaaS Startups | From Idea to Exit
5 Ways to Increase Your LTV: CAC Ratio | Unit Economics Breakdown
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5 Ways to Increase Your LTV: CAC Ratio | Unit Economics Breakdown
Understanding Free Cash Flow for Startups | Finance Case Study
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Understanding Free Cash Flow for Startups | Finance Case Study
The ULTIMATE MarTech Financial Model | SaaS Financial Model Tutorial
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The ULTIMATE MarTech Financial Model | SaaS Financial Model Tutorial
Seed Fundraising Guide for Startups | How to Present the Most Important Metrics
zhlédnutí 6KPřed rokem
Seed Fundraising Guide for Startups | How to Present the Most Important Metrics
Unlocking Cash Flow for Startups | 6 Ideas to Improve Profitability
zhlédnutí 3,1KPřed rokem
Unlocking Cash Flow for Startups | 6 Ideas to Improve Profitability
KPIs and Metrics for eCommerce | Evaluate Your eComm Performance
zhlédnutí 12KPřed rokem
KPIs and Metrics for eCommerce | Evaluate Your eComm Performance
How to Calculate eCommerce Contribution Margins
zhlédnutí 6KPřed rokem
How to Calculate eCommerce Contribution Margins
Marketing Dashboard Tutorial: How to Analyze and Track Marketing Performance
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How to Build a Financial Model for Your Influencer Business
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How to Build a Financial Model for Your Influencer Business
Startups 101: How to Properly Capitalize Software Development Costs
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The Ultimate Guide to Managing Your Startup in a Recession: 7 Actions to Take
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Navigating the Startup Fundraising Journey: From Seed to IPO
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Finance Case Study Example | SaaS Startup Financial Model [Template Included]
zhlédnutí 39KPřed 2 lety
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Unit Economics for Startups | eCommerce, Software & Hardware
zhlédnutí 36KPřed 2 lety
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How to Show Upside, Base Case, and Downside Scenarios in Financial Model for Investors
zhlédnutí 14KPřed 2 lety
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Business Valuation 101: The Comparables Analysis Method
zhlédnutí 15KPřed 2 lety
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Hi Eric, I am a new ecom biz owner still getting my fit in the industry so I really appreciate these videos you are making. I've been binge-watching your video to learn all this stuff. Thank you so much for giving us all this info!
This is exactly what I needed. Thank you so much for sharing this.
I’m having trouble building the first table from the dataset (a step back from what you’ve shown)!! can’t find the right formula!
Thank you for the video, however I had to pay $5 for it even video says for free, but I dont mind.
@DimitriGaldava-yi1rz i had to start charging a small fee for it recently to support my rising software costs. Thank you for understanding and I hope it helps you a lot!
@is forecasting of this analysis / Net sales also possible further? And what methods will be most suitable?
This information is so valuable, and I really appreciate the complete breakdown. Your channel is helping me so much. Thank you!!
@@nicolem.williams5511 my pleasure!!! Thanks for the comment
Hi Eric , My name is Surprise i was searching questions and answers for an administrator finance position and i bumped into your video where you were explaining about finance interview 3years ago, you know how to explain and I was impressed , so i would like you to help me to understand Administrator finance position and duties , what are the questions and answers. I would be very happy if you help me , thanks in advance.
Hi Eric , i am going to interview for Administrator finance i would like you to help me with questions and duties for this position.
Very great video Eric! Thank you so much :)
Finally after 4 days I have completed this model I have spearing no efforts to learn Financial Start up Models Thanx a lot to upload such a valuable content lot of love from India
Great Video Eric. I am wondering in a more real world scenario - an ecommerce store has 100's of SKU's how would we proceed in calculating contributional margin for the same?
How to assume future revenue growth based on historical data in income statement
This was awesome to watch and use. I am also looking to benchmark L&D NPS in the healthcare industry. Any sources you can point me to?
How can I calculate the churn if a customer is paying a flat fee for my service and, depending on the service, they could be an active customer for 2+ years?
@@michaelstopperich8528 so they are locked in to 2 year contracts?
@@eric_andrewsThey are locked into a contract yes, but the terms vary. Some pay the full balance of the service when they sign the agreement and others make payments for 3 to 10 months. But once the customer is done paying, its very likely they will remain an active customer for a period of time. Could be months could be multiple years.
They are locked into contracts, but terms vary. I sell Immigration Legal Services, so you could sign up for a $10,000 service, pay $2,000/month for 5 months then we send your application to USCIS (the government) to be reviewed and either "Approved" or "Denied". But its realistic we don't receive an answer of approval or denial for 6 to 12 months. This is where i'm getting stuck on how to calculate the churn.
@michaelstopperich8528 yes the thing you're getting stuck on is you are trying to use "churn rate" for a business that is not a subscription. I have a video on this here but basically i would just be focused on LTV per customer, churn only really applies to subscription businesses where people are actively canceling the service which is different czcams.com/video/2QY_1ATyTOU/video.htmlsi=xr67SIQU2H0tSRsX
How can I calculate the churn if a customer is paying a flat fee for my service and, depending on the service, they could be an active customer for 2+ years?
Hi Eric~great work~can I know where I can download the Excel?
@@Tiffanyonfire in the description
How do we get the framework excel file used in the video ?
AI short
@@AlternativeInvestor haha, i wish. That would save me a lot of work
Unemployed, how do i buy that model. Give it for free!
Watch the case study here: czcams.com/video/BrZYwkc2SvM/video.html
They are extremely efficient. I worked in Constellation Software Inc. for 5 years. Amazing model amazing growth!
Hello Eric, I appreciate the content being provided very much, but may I know how companies or agencies that provide subscription services for online stores and SAAS receive wages from the stores? Do they take a percentage of the sales of their subscriptions or do they receive an amount each month?
@saadAlshweaer it depends on the company. A mix of both, but lower-end products usually do a monthly fee, where some of the more enterprise level softwares do a % of sales or they increase pricing based on usage which is similar.
"The whale only gets harpooned when it surfaces." 💯
@@duncanmahood2878 lol yes
What do you think of Constellation Software's (CSU) business model?
Is that a new established strategy?
I like their diversified portfolio of software companies. Their acquisition strategy is impressive, over 100 companies acquired!
How do they manage so many different software brands?
They invest heavily in R&D, driving innovation. Their decentralized approach gives each company autonomy.
That's smart, allowing them to maintain their unique cultures. What about their organic growth strategy?
You nailed it bro! All covered in 23 minutes. Kudos!
excellent
🤯
Interesting. I'd love to know what they bing to the table to turn these companies around.
I think they help with some basic benchmarking, budgeting, etc, but my understanding is that they just let the companies run mostly. They don't really need them to do anything different because of the multiples they buy them at.
@@eric_andrews this is next level. Why Hormozi is not all over this? 😂😂😂
@LennyYT haha ya, they keep an amazingly low profile but can't hide forever i think they are like 10th largest company on canadian stock exchange now
Thanks for putting out great videos on software and finance
@@firte3899 my pleasure!!
I'm new to trading, and I've lost a good sum trying out strategies I found in online tutorials. I would sincerely appreciate any recommendations you have.
What else do you know about Constellation Software? There is much more to unpack than I covered today, please share below!
Financial modelling simplified
Thanks, ou explain it so to the point, very helpful
This is awesome 🎉 can you share more context on how your client converted so high for a generic giveaway prize? What was the follow up and other secondary strategies like? 🙏
We have a Monthly and Annual Subscriptions the annual is amortized Over 12 Month to have our Monthly Revenue . So in Jan. 2024 to calculate the ratios should i add YTD December + Jan Revenue and start calculating the ratios? . Your Excel Line 66 is accumulated Figures or the Monthly revenue of every Month Only
This is one of the best videos on the interpretation of customer cohorts.
Bro you killed it... Everyone only talks about easy stuff but the real stuff no one talks about it.. Thank you!
Haha thanks. That is my goal, glad it was helpful
But we are still spending CAC on not retained users , so how do we say 115$ CAC is no problem.
You just compare it to the LTV, lifetime CAC vs. lifetime gross profit.
How do you track and separate organic from paid results successfully?😊
It is much harder than it used to be, nobody has a perfect answer. As one of my marketer friends says "if I had a perfect attribution model I'd be a billionaire", haha. Depends on the channel. Good test is to pause paid campaigns and see what happens. Also a lot of attribution software like Elevar (for FB) that can help. Need to compare all your analytics and try to get as close to attribution as possible.
Awesome 🎉 you'd us this knowledge the same today or has things changed?
Yep these are the classic metrics, I'd still use them. Only thing is that since all the privacy tracking has been rolled out the paid vs. blended CAC is a bit harder to differentiate. But CAC is still key to understand.
The avg number of months to profitability per customer seems like its an important metric, does it have a name? (Ie 3 months in your example ar the very end of the video)
Great video!
Thanks Eric, walking through it month by month helped me see my mistakes!
Glad to hear it!
How can I calculate the required promoters to achieve a certain NPS target based on the existing survey?