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...
In SaaS, there are a lot of great “rules” that do make sense overall but can be confusing or borderline misleading at times. E.g., Sales +Marketing Expenses < First Year ACV = Success? I.e., keeping the Magic Number at or above 1.0. Great rule...
Dear SaaStr: What happens to employees after your startup gets acquired? It varies — a lot. But as a rule: Top engineers will all be given retention packages, extra money / RSUs / options designed to keep them for 2-4 years. All engineers and product people...
Dear SaaStr: What do mediocre employees do that the best employees don’t do? The #1 sign you need to move on from a team member? You're doing a lot of their job — Jason ✨Be Kind✨ Lemkin 🇮🇱 (@jasonlk) December 6, 2023 My list of what mediocre...
After the recent events at OpenAI, I thought it might be a good time to update this classic SaaStr post on “revolts”. My lesson learned: when the full team revolts (or a big part of it(, you have to act. You may not be wrong — but they are “right.” — Jason ed....
Dear SaaStr: What is The Best Way to Hire Your First Sales Rep? I’ll tell you the trick. It’s going to sound simple, but it isn’t, because almost everyone gets it wrong. For at least your first few reps: hire someone >>you<< would buy >>your...
I was curious a ways back how many Cloud and SaaS IPOs had founders that were equal co-founders from an equity perspective. That was how I was brought up (the first start-up job I had, the founders were equal shareholders). And I generally thought that 50:50 was the...
So we’ve talked a bit about high performing but toxic employees recently, and that sometimes you have to tolerate one, but not more than one, and not forever. More on that here. A different but related topic is The Hard to Work With VP. The VP that’s smart, gets...
The very best hires in SaaS cost you nothing. You can always afford them. Who should you hire, with limited budget? A VP of Sales? A Director of Demand Gen? Or A Head of Product? The answer is Yes. A truly great hire is >always< accretive. At least within just...
Dear SaaStr: What Percentage of Shares Should Be Set Aside for Employee Equity? Nuanced answer: A lot. But, the precise number today doesn’t matter. At a practical level, if you are growing quickly, you’ll typically grant 6-8% a year in additional grants (and...
Dear SaaStr: How does a First Time Founder Identify 10x Hires? How do you hire a great CTO, a great VP of Product, a great VP of Sales … if you’ve never worked with one? It’s hard. There’s a reason almost every founder you talk to had a...
Dear SaaStr: At what stage should SaaS founders fully stop being individual contributors? I’ve come up with 2 rough rules here to avoid stalling out: Try to have a complete 1.0 management team by $4m ARR at least. Earlier is better, of course. And try to hire at...
There’s nothing wrong with hiring folks from the competition It’s just, when you do, you’ll overlook too many of their weakness, and give them too much credit for their competitive experience Only hire them if you still would if they worked somewhere else —...
You can be a bit slow in recruiting in the early days, a few great hires mask it You can still be a bit slow in recruiting up to $2m-$3m ARR, great growth masks it But after $4m-$5m, you just have to get great at recruiting — Jason ✨Be Kind✨ Lemkin 🇮🇱...
Dear SaaStr: Do VCs Want To Talk To Senior Execs That Quit a Portfolio Company? Generally, if the issues are around: harassment or any inappropriate conduct, or fraud or misleading financials, etc, or something else that is wrong legally, ethically, morally,...