Yes, though usually (but not always) this approach usually requires starting at the bottom of the market, with small businesses that one way or another don’t require a traditional SaaS salesforce to acquire the first millions in revenue.
I’ll give you one example, a micro case study. I invested in a company called Talkdesk last summer when it had just hit $1m in ARR. It’s now at $11m ARR. Boom!
The founders got to $1m in ARR with just a single angel + 500 Startups. That’s mighty impressive. But — it wasn’t easy and took them years to get there. Longer perhaps than it might have with more funding. They paid themselves basically nothing for years, etc. etc. The team was lean and mean, and had zero sales people besides the CEO. And again, they started with an SMB product which helped.
Fast forward to that epic growth over the past months … from $1m to $11m ARR … and the company has raised$25m+ in funding from me (while at Storm), DFJ, and Salesforce Ventures … but on a net basis, has spent almost none of it. So far.
But now the burn will go up a smidge, or more. The sales team will soon be at 50+, the marketing team and budget are substantial, and the product and company have gone upmarket and much more enterprise.
In the long run, going more upmarket often burns less cash because the companies renew at > 100% on a net revenue basis. Renewals and upsells are extremely good at producing free cash flow once that engine is really running. But scaling up a large salesforce and marketing strategy to get there does tend to consume more capital.