Matt Harney's presentation at Cloud Ratings 2025 Value Creation Summit. Coverage includes #quantamental forecasting + #altdata.
Value Creation Summit July 2025
PRESENTED BY
SUMMIT PARTNERS
Vetted Experts -> Today's Speakers
Guy Rubin Founder + CEO
Ryan Walsh Founder + CEO
Kai Mitsushio Investor Alliances
Sean Saint Head of Investment Research
Jaap Westrik Founder
Simulive Event → Speakers Answering Q&A Live In Chat
REVENUE FORECAST ATTAINMENT Missed 2024 Forecasts Unacceptable
Missed Beat
70%
63%
60%
60%
50%
40%
42%
42%
30%
32%
90% Confidence Level: “I should come in under my forecast once every 2.5 years (10 quarters).” - Dave Kellogg
25%
23%
20%
19%
10%
0%
Q1 2024
Q2 2024
Q3 2024
Q4 2024
+
Social Attribution: @CloudRatings + @SaaSletter
+28% Capacity Post Market Peak Poor Forecasts Drove GTM Overhiring In 2022 = Sales Net Hires / Fires
= Marketing Net Hires / Fires
Alto Model
+
2019
2020
2021
2022
2023
2024
‘25
Index Components: Proprietary to Cloud Ratings | Data Source: People Data Labs Social Attribution: @CloudRatings + @SaaSletter
Zendesk Case Study: Misses → $6.8 Billion Lost
Feb ‘22 Offer: $127 - $132 / share = $17.0 Billion
2023e Forecast: (9.5)% revision in 3 months
66% monthly bookings misses
Jun ‘22 Deal: $77.50 /share = $10.2 Billion
$6.8 Billion Lost
Social Attribution: @CloudRatings + @SaaSletter
Zendesk Case Study: Slowdown Was Foreseeable
Forward Demand Indicator (LHS)
Realized New Bookings (RHS)
Alto Model
Social Attribution: @CloudRatings + @SaaSletter
Alt Data Outperforms Channel Checks By 5x
R-SQUARE VS REVENUE ACROSS LAG 0 - LAG 6:
1.0
0.77 0.78 0.78 0.77
0.8
0.71 0.74
0.65
0.6
0.4
0.2
0.13 0.13 0.13 0.13 0.13 0.13 0.13
0.0
L-0 L-1
L-2 L-3 L-4 L-5 L-6 |
L-0 L-1
L-2 L-3 L-4 L-5 L-6
ALTERNATIVE DATA - TOP QUARTILE n = 125,000+ alternative data points from Tier 1 Alt Data suppliers, conducted by Cloud Ratings for Alto Model construction
SYSTEMATIC CHANNEL CHECKS n = 264 equity research systematic channel checks covering 7,500+ data points, conducted by a Tier 1 investment bank
Alto Model
Note: Reflects Proprietary + Confidential Cloud Ratings Work Product
Software Buyout Study
MISSED FORECASTS
LIMITED MARGIN EXPANSION
Social Attribution: @CloudRatings + @SaaSletter
Alto Model
SaaS Demand YTD 2025 via
Indexed To 1.0 at January 2024:
Broad Software - n=340 Macro Sensitive Subset
1.4
Start of Tariffs / “Liberation Week”
1.2
1.0
Today vs Pre “Liberation Week”: Broad Software = 0.0% Macro Sensitive = +5.5%
Normal Holiday Seasonality
“Human pipeline reviews can only take you so far. ‘Macro’ and ‘tariffs’ are perfect excuses for sellers, especially B and C Players. You need to be using data at scale - your sellers' email inboxes, your call recordings, your CRM - to *really* know if macro is impacting your net new business.” - Guy Rubin, Ebsta Founder + CEO
0.8
0.6
Social Attribution: @CloudRatings + @SaaSletter
Be Mindful Of Your End Market Volatility
STANDARD DEVIATION OF REVENUE GROWTH RATE - Q1 2022 TO Q4 2024
0%
10%
Transportation, Logistics, Supply Chain Tech
19%
15%
Public Sector Tech
15%
Media Tech
Restaurant, Hospitality + Leisure Tech
12%
Cybersecurity Property Tech
12%
10% 10%
Developer + Engineering Tech
10%
FinTech EdTech
7%
Marketing + Sales Tech
6%
Data, Infrastructure + Reporting Tech
5%
5%
E-commerce + Retail Tech
5%
HealthTech
HR, Legal + Back Office Tech
5%
Social Attribution: @CloudRatings + @SaaSletter
2025 GTM Yields + Conversions Are Concerning
<$25m ARR
$25-$100m ARR
$100-$250m ARR
>$250m ARR
1 - Marketing Targeting:
(HIGHER IS BETTER)
0% 1% 2% 3% 0% 1% 2% 3% 4% 5%
3%
3%
2%
2%
2%
2% 2%
2%
2%
2%
1%
1%
2023 2024 2025 //
2023 2024 2025 //
2023 2024 2025 //
2023 2024 2025
2 - Sales Execution:
(HIGHER IS BETTER)
4%
4%
3% 4%
3%
2%
2% 3%
2%
2% 3%
2%
2023 2024 2025 //
2023 2024 2025 //
2023 2024 2025 //
2023 2024 2025
3 - Full Funnel Performance:
(HIGHER IS BETTER)
0% 2% 4% 6% 8% 0%
9% 8%
8% 10% 8%
6%
6% 6% 5%
5% 4% 6%
2023 2024 2025 //
2023 2024 2025 //
2023 2024 2025 //
2023 2024 2025
Social Attribution: @CloudRatings + @SaaSletter
Insufficient Pipeline Coverage
PIPELINE COVERAGE
PIPELINE COVERAGE RATIOS
Stated / Required
Stated Coverage
Required Coverage
5x
110%
110%
4x
102%
4.1x
3.9x
3.8x 3.7x
100%
3.6x
3.6x
NEGATIVE MARGIN FOR ERROR ZONE
3x
90%
87%
2x
80%
1x
0x
70%
2023
2024
2025
2023
2024
2025
Social Attribution: @CloudRatings + @SaaSletter
Reasons For Misses → Summit Action Items
Summit Action Items + Partner Capabilities:
0%
20%
Pipeline & Deal Flow
34%
Sales Execution & Performance
19%
Market & Economic Conditions
17%
Internal Operations & Resources
12%
Go-to-Market Strategy & Execution
8%
Leadership & Strategy
6%
4%
Product Market Fit
Other Factors 2%
Cloud Ratings Analysis of Pavilion Pulse Reports Social Attribution: @CloudRatings + @SaaSletter
Vetted Experts -> Today's Speakers
Guy Rubin Founder + CEO
Ryan Walsh Founder + CEO
Kai Mitsushio Investor Alliances
Sean Saint Head of Investment Research
Jaap Westrik Founder
Book Partner Introduction Via Matt Harney:
“The forecast is analytics, judgment, and trust all rolled up in one. If companies keep missing forecasts, it’s hard not to lose trust. It’s hard to let the team lean forward on growth, product, and acquisitions…” MANAGING PARTNER
TIER 1 GROWTH EQUITY FIRM
Social Attribution: @CloudRatings + @SaaSletter
“I don't hold my investment team accountable unless I can see something in the data that would have reflected a sales pipeline issue.
As a PE board member, I have only one shot to make a voluntary change at a leadership level before I begin to lose the confidence of my investment committee. If I'm going to pull the trigger, I need to be 100% confident and have exhausted all options. The primary communication issue is the inability of the executives to demonstrate, quantitatively and qualitatively, why the strategy board members' (typically spreadsheet folks) perspectives are inaccurate. Their expectations need to be acknowledged and addressed to build consensus and alignment.”
MANAGING PARTNER TECH CROSSOVER FIRM
Social Attribution: @CloudRatings + @SaaSletter
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