Which is more exciting, founding or investing?
Founding is 10x more exciting, 100x more stressful. Founding something Very Successful is usually 10–100x more lucrative that Investing in something Very Successful. Investing is hard. But it does not require creating something. It requires hunting, knowing, picking,...
How do I get my SaaS company (3mil ARR) acquired?
$3m ARR is an interesting point. You’ve proven real product-market fit … but you aren’t really big enough from a revenue perspective to be impactful to a BigCo. When BigCos are hunting for revenue to buy in SaaS, they usually are looking at start-ups past $10m-$20m...
How do B2B SaaS companies manage deprecating features while guaranteeing services in their contract?
You can’t. This is a real, important issue in enterprise-focused SaaS that sneaks up on your in Years, 3, 4 and 5. You really can’t deprecate any features that are perceived as important to your core customers. The customers won’t stand for it. Your biggest customers,...
Is it a bad sign if a startup expects dedication and long hours but does not offer any incentives like equity, bonus, etc?
It’s a sign of a very green founder-CEO. It’s not important in a start-up that everyone works 100 hours a week. That doesn’t even help. People cannot do high quality work 100 hours. If you force them to sit in an office 100 hours, other than for short sprints …...
Should you avoid angels, VCs or applying to an accelerator if you can monetize your startup early?
Well, yes, you should avoid raising money unless: (x) you need it or (y) it’s dirt cheap. Look at Dell. Notwithstanding its current market challenges, Michael Dell himself still owns 80% of Dell worth $18.5 billion (see Dell Gets Bigger and Hewlett Packard Gets...
Are Silicon Valley investors different?
They are different. They: Write bigger checks Pay higher prices, on an absolute basis; and Invest more quickly. Why? They are optimized around $Billion+ exits. More regional VCs, and most non-U.S. VCs, by contrast are optimized around $50m exits as a traditional...
Is it common or agreeable to sell FF shares in a seed round?
Selling any “secondary” shares, via FF shares or any structure, at a valuation < $100m is pretty much a Red Flag for venture investors, either in the current round or down the road. If an ex-employee sells cheap, that’s fine, even good sometimes. But if the CEO...
How much do top VC firms allocate to follow-on investments?
Most firms allocate 60–66% of the fund for “reserves”. I.e., a $250m fund really means maybe only $100m is earmarked for new investments in new companies. The rest will be saved to double down on winners, to extend the runway of companies doing OK, and sometimes, to...
We’re a profitable SaaS startup that is self funded. What accounting best practices should we adopt to leverage profits to reinvest in growth?
While no pure accounting magic will change cash-flow (probably the only metric other than revenue that matters when you are bootstrapped) … what will confuse you, and affect your cash-flow planning, is renewals. Especially, renewals of pre-paid annual deals. The cash...
As of August 2016, is Dropbox dying?
Of course not. At $400m ARR, growing double digits annually, and cash-flow positive-ish-almost, Dropbox is not only not dying — but an important force in the industry. More PR could help, though. View original question on quora
What is the range of MRR/mo an account executive brings in at an early stage B2B SaaS company with less than 1mil ARR?
Let’s work backwards. At a $45k or so ACV, that’s “high-end transactional” sales. These reps >at scale< usually should be able to hold quotas from $600k-$800k or so. At scale. But you aren’t there today. You are at <$1m ARR. But you have customers and...
What has been the biggest change in B2B sales over the last 5 years?
While you might say technology, the real change is sophisticated specialization. Each sales and even demand gen and account management / customer success professional just doing one stage of the funnel and lifecycle. And we’re just getting started. We’re just learning...
What are the most common reasons why aspiring VCs fail to become VCs?
Because there is no defined career path. There just isn’t. All but the smallest firms only hire a few junior level folks, and generally, this are >not< partner-track positions. The very largest firms hire a lot of junior folks, but again, there usually is no...
I want to raise $1M on a seed round from a few VC fund. What do I need to say in my email pitch about it?
Make the e-mail pitch 100% stand on its own. No teasers. No coffee invites. Make the email pitch itself fundable, or almost: The Team. Why this team truly is going to win. The Metrics. What are the data that support you’re building a pre-nicorn. The Why. Why is this...
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