Dear SaaStr: What Is The Average Time it Takes a VC to Make an Investment Decision? For hot seed and even Series A investments? 20 minutes into the first face-to-face meeting. The average VC basically makes the initial decision to tentatively invest very quickly —...
Dear SaaStr: What Kind of Background Checks Do VCs Do on Entrepreneurs They Fund? It varies. Everyone does some background checks, or least they did outside of the Boom Times of late 2020 through late 2021. And some do very in-depth ones with lots of “off sheet”...
Dear SaaStr: How Do Investors Feel About “Acquihires”? Back when I started investing, in 2013, VCs worked on getting acquihires for their struggling startups. A lot of energy was put in to find a “soft landing” for struggling investments...
Dear SaaStr: Did it ever take you a year to close a sale? Absolutely. This is pretty common in the enterprise. It took me about 18 months to close Google, for example. And that was just for the initial group of users: Need identification and discussions with...
Dear SaaStr: What Was the Toughest Rejection You Ever Had in Sales? The hardest rejection I’ve had in sales was around renewals. Especially ones I thought we really had earned. But still lost. In particular, in the early days of EchoSign / Adobe Sign, we had a...
Dear SaaStr: Is It Normal for a Founder CEO to End Up With Just 10% Equity? Yes — if you are venture-backed. Roughly speaking, this is what generally will happen after 3 rounds of traditional venture capital. Expect it and plan for it. If the company sells...
Dear SaaStr: What Should Happen When a Co-founder Wants to Quit? This is one of the toughest situations to be in. First, figure out if it’s just anxiety. Starting something is hard. Getting to the first $1m in ARR is borderline impossible. If it’s “just” anxiety, and...
Dear SaaStr: When Is It Too Soon to Target Enterprise Customers in SaaS? It too soon to target enterprise clients when you can’t support their needs 90 days after you close them. It’s sort of OK in the enterprise to promise features and functionality that are sort of...
Dear SaaStr: What one thing or characteristic do you appreciate the most in a salesperson? That I matter. This is a rare skill, and hard to hone: That I’m not just a transaction. That my concerns matter. That I won’t be abandoned the second the deal closes. That all...
Dear SaaStr: How often will a sales engineer also wear a customer success hat in an early stage of an SaaS startup? Pretty darn common. The “traditional” role of a sales engineer is to support the sales team through the close of a deal. And as you scale, the role...
Dear SaaStr: What Surprised The Most About First Getting VC Funding? As a founder, the biggest thing that always surprised me was the limits of due diligence. In my first start-up, we had a very exotic, complex technology. None of the investors ever understood it. At...
Dear SaaStr: What’s Your Best Advice for Struggling Entrepreneurs? Having struggled a lot myself in the early days several times … just a few thoughts to summarize my learnings: 1. Get help & upgrade the team. This is the #1 thing you can do to move...
Dear SaaStr: How Big of a Return Are VCs Looking For in a Startup? For Angel, Pre-Seed: At least 50x, with a possible chance of more. The loss rate in general is so high here, the winners have to do 50x. And this is after dilution, so 100x from the valuation at...
Dear SaaStr: What Are The Common Problems With “Founder CEO’s”? Founder CEOs are better, all things being equal. They go the distance. They care the most. They know it cold. And in fact, about 90% of SaaS companies that IPO still have their founder...
Dear SaaStr: What are the best 5 points to improve poor sales performance? Here are my 5 simplest ideas to quickly improve sales performance. They don’t solve bigger problems, but they usually work — and work quickly. Concentrate leads in those who can...