Acquisitions — If You Do Sell, Try to Make Sure It’s At a Local Maximum
Have a strong M&A offer? Not sure what to do? Look at this pic or a similar one Do you want it? If so, say No If not? Probably just say Yes pic.twitter.com/K483lKnyzd — Jason ✨Be Kind✨ Lemkin (@jasonlk) April 21, 2021 So I wrote a version of this post...
Dear SaaStr: I’m an Early Employee and Have a Chance to Sell Some of My Startup Shares. Should I?
Dear SaaStr: I’m an Early Employee and Have a Chance to Sell Some of My Startup Shares. Should I? Goodness. Congratulations on the change for some liquidity. It’s both exciting — and confusing. Marc Benioff sold a huge amount of his Salesforce stock before its run...
Dear SaaStr: How Many Deals a Year Do VCs at Bigger VC Funds Do a Year?
Dear SaaStr: How Many Deals a Year Do VCs at Bigger VC Funds Do a Year? Not as many as you’d think. This is a really important question because it creates so many non-obvious VC-founder dynamics. There are some partners that do more but the number is generally 1-2 per...
Dear SaaStr: The Startup I’m Working At is Getting Acquired. How Much Can I Negotiate?
Dear SaaStr: The Startup I’m Working At is Getting Acquired. How Much Can I Negotiate? Unfortunately, as a non-CEO, non-founder of an acquired start-up … you have almost no ability to really negotiate. You can try a little, but it’s rough. Overall, your ability...
Dear SaaStr: When Should You Sell Your Startup?
Dear SaaStr: When Should You Sell Your Startup? Having been through the acquisition process 4x — twice as a founder, twice as a start-up exec, here’s my list of when and if to sell. Don’t take it literally. Most startups never get a single good...
Dear SaaStr: When Should You Sell Your Company?
I was with the CEO of a $XB+ SaaS CEO a little while back He was acquiring a leanly-funded startup. The founder owned so much, he would make more than the CEO. I asked how that felt. "That's his journey. We're on a different journey." — Jason...
Zoom Had a Burn Rate Budget. So Should You.
There was a very curious thing in Zoom’s financials leading up to its IPO that I am surprised no one commented on, at least that I saw. But as a founder, it jumped out at me. In 2017, Zoom’s cash burn was exactly equal to its Gross Proft. In other words,...
What If There Are No Natural Acquirers (For Your Company)?
A little while back I had coffee with a very successful VC and we chatted about our views of what’s happening in SaaS. The things we are both interested in are very similar, our thoughts on risks and markets were well aligned. At the end, he noted how the key...
If You Sell Your Company, Use a Banker
When I sold my first company, I used a banker, an M&A advisor. When I sold my second, I did not. Not using a banker the second time was a mistake. The benefits are nonobvious, somewhat counterintuitive — and large. You don’t get THAT much from a...
Dear SaaStr: How Much Do Founder-CEOs Own at Time of Exit?
It can vary a lot, of course. If you never raise venture capital, the founder-CEO might own 50%, or even 100% in some cases. The founders of $10B+ Mailchimp still own 100% of the company, for example. But, on average, venture-backed founder CEOs tend to end up owning...
The Only Exit “Strategy” Is IPO
At least a few times a week, I am sent a deck or exec summary that includes an “Exit Strategy”. The slide sometimes references a nice acquisition by an adjacent company, or a prior competitor or player in the space. It’s all fine and good, though I...
The Rise of Private Equity in SaaS: A Gift to Founders
Let’s take a look at a few recent $1B+ “exits”, i.e. sales in SaaS: Pipedrive acquired by Vista for $1.5B Thoma Bravo acquires Sophos for $3.8B Insight Partners buys Veam for $5B Gainsight sells a majority interest to Vista at $1.1B valuation What do...
Plenty of Top SaaS Companies Are Worth a Lot Less Than 10x ARR
A reminder that as a start-up, if you aren’t growing at fairly fast rates … your comp is 5x ARR Also a tough realization for bridge rounds, etc. https://t.co/bL5o63pdsB — Jason ✨BeKind✨ Lemkin ⚫️ (@jasonlk) May 14, 2021 So as you’ve seen,...
Would You Rather Own 100% of a Company Worth $100 million or 10% of a Company Worth $1 Billion?
Q: Would you rather own 100% of a company worth 100 million or 10% of a company worth 1 billion? This is the greatest question for ambitious founders. I’ve thought about it a lot. I’ve lived it (a version of it). And I think about it every single day. I remember when...
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