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: What are the typical components of an Outside (non-Founder) CEO’s compensation? How are CEO contracts typically structured? I’ll answer this from a start-up perspective, and assume you mean bringing in an outside CEO to run your start-up....
Dear SaaStr: Who Should Approve Startup CEO Expenses? I would have the board approve CEO salary, all material expenses (>$5k-$10k), and an overall CEO expense policy. And in fact, once you have VC investors, this is often required in your Investor Rights...
Dear SaaStr: Should I exercise my stock company stock options if they are $7 underwater? Stock options can be really unfair to employees by their nature. Almost no one has the facts to actually know what to do what them. And fewer still even have the financial...
So Carta recently put together some data on a topic I’ve wondered about: just how many startups allow option exercises beyond the traditional 90-day window? The answer: the general trend is just over 10% of startups have extended windows beyond the traditional 90...
Dear SaaStr: Does paying higher salaries increase employee retention? Yes, if their salaries are unfair, unequal, or below market. Otherwise — maybe not. Here’s what I’ve learned across 3 startups of my own, and investing in 25+ more: Underpaying certainly leads to...
If someone is looking for another job in Year 1, Even if they don’t take it … You’ve already basically lost them. Do more 1-on-1sGet more 360 feedbackTalk more I know you don’t have time Make it — Jason ✨Be Kind✨ Lemkin (@jasonlk) October 11, 2020 So...
Dear SaaStr: Is it rude to ask for a raise when there’s no salary increase coming up at work place after six months of joining? In a Big Company, in my limited experience, I do think you need to be thoughtful here. There are rules. You can threaten to leave once and...
Dear SaaStr: As a salesperson, if you sell a multi-year SaaS deal, does the whole amount count towards your current year quota? Or just the part attributed to your current year? Approaches vary here. First, what you pay on vs. quota retirement can vary. On commissions...
I was curious a while back how many of the recent 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...
So something quietly changed in the past few years. Maybe it was the investing craziness of late ‘20 through late ‘21. Maybe it was VCs not wanting to rock the boat. Maybe it was a lot of startups just plain not having real boards of directors. What’s changed is...
Dear SaaStr: How does a CEO/founder/owner pick their salary? I’ll share my stories. In my first start-up, we raised $9m in our seed round — a large first round, but the times were different. The VCs set my salary without discussing or consulting with me...
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...
Q: How would you deal with a situation if you realize months later that the sales system in your company has calculated the commissions much less than what your employees should be getting? I’ve implemented and experienced all three sales commission outcomes with...
So raises are a nuanced topic in start-ups. In the early days, most of your team won’t even have been there for a year. So that’s often seen as no point in raises. And even later, many founders are resistant to giving “across the board”...