Dear SaaStr: How Much Equity Should a CEO Have in a Startup? There’s no magical answer, but for venture-backed start-ups, for years VCs have aligned on around 6%-8% equity for a non-founder / outside CEO. As you approach IPO and very late stage, that often goes down....
Dear SaaStr: How should shares in a startup be divided between 4 co-founders? If we have equal shares, what if one of us puts in a cash injection at a later date? You’ve got two good, different questions here. Question #1: How should you divide shares up between 4...
Dear SaaStr: Should I Go Into SaaS Sales? If you aren’t sure you want to go into sales — don’t do it. Maybe in 2021, when many SaaS leaders were growing at simply unprecedented rates, could succeed in sales if you weren’t sure you wanted to sell. Not today. A...
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...
Discover what’s new at Greenhouse, a $200M ARR recruiting software company. CEO and co-founder Daniel Chait and SaaStr founder and CEO Jason Lemkin discuss AI, trends in the market, getting bought by PE, and much more.
Dear SaaStr: How do VCs Really Feel About Founder Salaries? I Was Told That a General Rule of Thumb is 75% of Market The 75% Rule once you are VC Funded for more than a few million dollars is a good one. But if you raise less than that — 75% may well be too...
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...
Your very, very best people are even better than you think they Dig in and you’ll see they are doing even more great things than you realize * Let them run* Help them hire* Let them make the mistake* Wait to top them* Thank them* Pay them — Jason ✨Be Kind✨...