Dear SaaStr: What Are the Exit Options for VCs That Fail to Make It in The VC Industry? There is probably no better business to fail at than to be a failing General Partner at a sizeable VC firm. If you fail as an associate, principal, etc. … that’s just like any...
Dear SaaStr: Do Late Stage Startups Prefer to Get Acquired or Go Public? It really varies. Especially these days, when the IPO markets are closed. When it was literally an IPO a Day in 2021, it seemed almost easy. And today — it seems so far from easy. It Was...
Dear SaaStr: Do Companies Prefer Stock Over Cash When They Acquire Startups? It depends on how profitable the acquirer is. All things being equal, most tech companies that are very profitable (Adobe, Microsoft, Intuit, SAP, Oracle, Google, Facebook etc) would prefer...
A life poorly lived is a trap Go for it at least once — Jason ✨Be Kind✨ Lemkin (@jasonlk) May 5, 2023 BusinessInsider had a great story a ways back on Datto’s $1b exit to Vista Private Equity (more on the role of PE in SaaS here). So much of it...
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? 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? 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? 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? 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...
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...
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,...
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...
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...
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...
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...