The TJ Edwards Group is engaged to assist in numberous projects each year. The list below is a small sample of noteworthy engagements that are representative of our work.
We've implemented the set up of our proprietary Dashboard for many clients. These Dashboards provide a web-based view of key metrics, trending, and financial statements.
The Dashboard is configurable for each company to suite the business model. The process implementation process is relatively straight forward and maintaining the Dashboard is simple.
One of our first clients, a SaaS company has been using the Dashboard for several years internally amongst the management team and Board. In 2014, the Company started a formal sale process, and the Dashboard was instrumental during the pitched to potential acquirers. The web-based Dashboard was used solely for the financial presentations with great success, with particular focus on SaaS metrics.
The company received 6 term sheets and completed the sale in 2014.
MRR line of credit
For one software client, the TJ Edwards Group had closed a traditional Venture Bank line of credit which was based on eligible accounts receivables. While this line was sufficient, we began exploring options for additional growth financing, and deternmined that debt financing was prudent in the circumstances.
In consultation with the venture bank, we were able to modify the line of credit by converting it to a "MRR" credit facility (Monthly Recurring Revenue). The MRR type of financing is a relatively new concept designed for SaaS companies. Banks have changed their approach to SaaS companies, and as a result, such financing can be easier to underwrite assuming the appropriate metrics exist. This may result in availability to a larger line of credit.
In our client's case, we were able to double the existing line, and were able to close quickly. This facility was closed with Bridge Bank, and represented the fist MRR line of credit they closed in the east.
Sell side M&A transaction
Our team coordinated the sell-side transaction process for several companies in the prior year, and completed due diligence with 5 potential acquirers. Through these engagements, we also worked with 3 investment bankers.
Our services in connection with one such engagement kicked off with assistance in the preparation of forecasts and presentation materials, and followed with multiple presentations to potential acquirers (both east and west coast).
The TJ Edwards Group lead the due diligence management which included various phases as prospective buyers went further into the process. With term sheet in hand, the level of due diligence becomes a substantial undertaking. We lead the management through the full process including setting up and managing the data room, and users, and managment of over 1,000 files.
Our team assisted in analyzing terms sheets as they were received including the development of "waterfall" model to assess the exit impact to shareholders.
With respect to the term sheet, we assist as needed in the negotiation, and in this case, we teamed with an investment banker in finalizing terms with the potential buyer. We continued to be instrumental during the close, working with the buyer and legal teams. Our services continued well into the transition to new ownership.
GAAP analysis of software revenue
IIn connection with the audit coordination of a VC-backed enterprise software provider, our firm provided in-depth analsyis of customer contracts and revenue recognition.
GAAP rules regarding software revenue recognition are norotiously complicated, and are designed to prevent financial reporting abuse.
Our analysis included contract by contract review of all elements delivered and the application of VSOE rules to determine the timing of recognition of revenue.