# SaaS funding Round2 & Vainu | Christian Czernich | Negotiator 44

Christian Czernich founded Round2 Capital in Vienna after a PhD at the Stockholm School of Economics and Stanford and a career in investment banking that included working alongside

Canonical: https://www.neuvottelija.fi/fi/episodes/50-saas-funding-round2-vainu-christian-czernich-negotiator-44/

[Katso jakso](https://www.youtube.com/watch?v=oxv4AydGKmk)

Christian Czernich founded Round2 Capital in Vienna after a PhD at the Stockholm School of Economics and Stanford and a career in investment banking that included working alongside Sami at Translink. Round2 does something most investors do not, namely revenue based funding, where the firm buys into a share of a company's revenue rather than its equity, leaving the cap table untouched. The conversation uses Vainu, one of the largest bootstrapped tech companies in the Nordics and Round2's portfolio company, as the worked example. Along the way Czernich explains why SaaS is mostly B2B and therefore slower to scale than people assume, gives his three favourite SaaS metrics plus a fourth that almost nobody tracks properly, and describes what happens to a software company's cash flow when it moves from licence sales to subscriptions.

00:00 Why B2B and B2C scale very differently
00:36 Welcome and introduction to Round2 Capital
01:12 From academia to investment banking
01:59 Research on venture capital in Silicon Valley
02:26 Starting Round2 in 2017 and the second fund
02:53 Why Round2 invested in Vainu
03:48 What bootstrapped actually means
04:53 What makes a SaaS company different
05:20 Recurring revenue and the newspaper analogy
06:02 Predictability scalability and gross margin
06:24 Consumer subscription software as its own niche
06:45 The big misunderstanding about B2B growth
07:18 Acquisition cost and the value of low churn
07:34 The first favourite metric annual recurring revenue
07:56 The myth that SaaS is only recurring revenue
08:36 Lifetime value versus customer acquisition cost
09:38 When firms do not know their real acquisition cost
10:02 Churn net churn and the power of upselling
10:35 How upselling works in practice
11:26 Valuing LinkedIn and Microsoft's shift to subscriptions
12:16 Moving from licence sales to a SaaS model
13:06 Why the transition is harder than firms expect
13:26 Why SaaS companies can look unprofitable
13:48 The M-Files example from Finland
14:28 A fourth metric engagement data
14:56 What low engagement reveals about a customer
15:36 Key account management still matters
16:12 Consulting fees and implementation partners
17:04 The dream of an implementer network
17:25 Equity mandates versus what Round2 does
17:54 Revenue based funding explained
18:32 A two to six percent share of revenue
18:46 Fully non dilutive and no cap table involvement
19:24 Capital as a service
19:57 Funding growth out of high gross margin
20:52 How Round2 protects against misallocation
21:10 Turnover thresholds and use of funds
21:49 Preferring companies near break even
22:16 Who should get in touch
22:28 Doing deals with Austrians and Germans
22:56 Austrian and Nordic negotiating styles compared
23:52 Risk taking and joint ventures in Eastern Europe
24:20 Why Finland produces strong B2B software
24:50 Closing and contact details