Dear SaaStr: Is it a Red Flag if The CEO is Only Interested in Selling the Company?
Dear SaaStr: Is it a Red Flag if The CEO is Only Interested in Selling the Company? It is. Or at least — it’s a Yellow Flag. The company will never be great if the CEO is thinking this way. There are so many start-ups, so many products, so much competition. You can...
Dear SaaStr: When Startup Founders “Exit”, How Often Do They Found Another Company?
Dear SaaStr: When startup founders exit, how many start new companies? It’s pretty common. Many founders learn they aren’t “done” after all after selling. Sometimes it takes some time to see that, and the gap between starting a new one in many cases is a year or...
What Does it Take to Get to the Next Level of Funding After Series B with Scale Ventures’ Stacey Bishop
How do you raise funds beyond Series B? Stacey Bishop with Scale Ventures shares what it takes to get to that next level of funding.
6 Things To Know About Getting Acquired: The Good, The Bad, The Somewhat Ugly
Getting acquired seems like the goal for most. Perhaps it is. No exit at all isn’t that fun for most of us. Liquidity matters, and is important, and is important to talk about. But getting acquired isn’t as simple as just signing some paperwork and...
Dear SaaStr: If You Want to Buy Shares from a Founder That Has Left the Company, What Price Do You Use?
Dear SaaStr: If you have old founders who left the company and kept their shares, on what valuation you buy their shares? Generally speaking, there are two paradigms: Buy them out at Common Stock price (which is what they in fact own), based on the lastest option...
Dear SaaStr: Can I Position My Startup To Be Acquired By The Likes of Google, Salesforce, Adobe, etc.?
Dear SaaStr: Can I Position My Startup To Be Acquired By The Likes of Google, Salesforce, Adobe, etc.? No. But … Sort of. What I’ve learned being on both sides of acquisitions, and being a 2x acquired founder — is: There is a List. There’s an...
5 Tips On How to Handle Acquisition Talks
Dear SaaStr: What should I know about getting acquired? My top 5 tips: #1. Listen more. Talk less (on the target side). It’s very difficult to invent an acquisition. It’s almost impossible to create one, though it happens sometimes. Listen and learn. ...
Dear SaaStr: Do Shares Get “Forward Vested in an Acquisition?
Dear SaaStr: Do Shares Get “Forward Vested in an Acquisition? Stock vesting is accelerated very rarely in an acquistion. In 95%+ of cases, the acquirer wants folks to keep vesting just as before — or more so. Even where the option agreements or bylaws or...
Dear SaaStr: What is a “Good” Exit Strategy for a SaaS Company Raising a Seed Round?
Dear SaaStr: From An Investor’s Perspective, What is a “Good” Exit Strategy/Plan for a SaaS Company That’s Raising a Seed Round? Ok, people are going to tell you not to have a slide or discussion on an “exit strategy” and they are...
There Are Only ~58 Acquisitions of $50m+ or More in Software a Year per Theory Ventures
So long time friend of SaaStr Tomasz Tunguz, now heading his own VC fund Theory Ventures, has again summarized a lot of data into a few great charts. This time, on Mergers & Acquisitions. My biggest take-away: there are barely more than 50 acquisitions of...
Dear SaaStr: What Should Founders Do To Get Noticed By An Established Company’s M&A Team?
Dear SaaStr: What Should Founders Do To Get Noticed By An Established Company’s M&A Team? Don’t bother too much with trying to get “corporate development” or the M&A team’s attention. That’s not their job. Probably the most...
Why Founders Leave After Acquisitions
Why do founders leave after their companies are acquired? There are many nuanced answers, but in the short and medium term, it’s incentives. Acquirers use 3 incentives to get founders to stay: Sticks. If you leave, you lose X% of the consideration. Acquirers try to...
After I Sold My Company, I Couldn’t Make Decisions Again for a While
What’s the toughest part of running a startup? A partial list: Recruiting. This is always hard, forever. Co-founder Conflict. Hopefully, you don’t have this. If you do, boy it’s hard. Almost running out of money. Happens to almost all of us....
How To Reverse-Engineer a $100M Exit: SaaStr on My First Million Pod
How do you reverse-engineer your first million as a SaaS startup founder? SaaStr founder and CEO Jason Lemkin chats with Sam Parr on the popular YouTube channel and podcast My First Million about what’s required to make it on the map for a $100M exit and then reverse engineers the steps to get there.
Rule 1: New minimum is $400K per employee
Rule 2: Go multi-product
Rule 3: Your second product must be bigger than your first product
Cheat code: Double your prices
Rule 4: 30% of your revenue is international
Rule 5: Localize your product
Cheat code: Remove friction
Rule 6: 100% net revenue retention
Rule 7: Don’t raise double digit millions
Founder SaaStr
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