Dear SaaStr: We are at $10MM ARR and it’s … hell. We can’t seem to breakthrough and we are short on cash. Do we sell? Push through? Last year we grew 40% so growth is slow but we’re still growing.
We all get burnt out in a scenario like this. Many years in, real ARR, but not at true scale. Cash being tight only makes it harder.
First, 40% growth at $10M ARR isn’t a rocketship. But it’s still real growth. You can still get to $100m+ ARR.
It’s not hypergrowth, but it’s respectable, especially in the enterprise, where sales cycles can be long and complex. This tells me the business isn’t broken—it’s just stuck in the grind of scaling. And scaling from $10M to $20M ARR is often the hardest phase. It’s where you feel like you’re running uphill with a boulder strapped to your back, especially since you just don’t have much redundancy on the team.
The cash crunch is the real issue here.
When you’re short on cash, you’re forced to underinvest, and underinvestment kills momentum. I’ve seen this play out too many times. At $10M ARR, you need at least $5M on your balance sheet to scale properly. Without it, every decision feels like triage, and you can’t make the bold moves that drive growth.
So, should you sell or push through? Here’s how I’d think about it:
1. Do You Believe in the Business? If you still believe this is a $100M ARR business in the making, then you push through. But you need to be honest with yourself. Is the TAM big enough? Are your unit economics solid? If the answer is yes, then it’s worth fighting for.
2. Can You Raise A Bit of Capital? The venture market is tough right now, but not impossible. If you can show 40% growth at $10M ARR with decent gross margins, you might still be able to raise. It won’t be at a high valuation or from a VC looking for high growth, but it could give you the runway you need.
3. Consider Strategic Options. If you’re truly out of cash and can’t raise, selling might be the best option. But don’t sell out of desperation. Not unless you are truly running out of cash. Look for a strategic buyer who sees the long-term potential of your business and can invest in scaling it. If you do sell, it has to be from a position of at least moderate strength.
4. Get Ruthlessly Efficient. If you decide to push through, you need to get lean and mean. Focus on your core product, your best customers, and your most efficient growth channels. Cut anything that doesn’t directly drive ARR.
5. Hire Accretive Talent. Even with limited cash, you can often afford one great VP. A killer VP of Sales or Marketing can be transformative at this stage. They’ll pay for themselves within 12 months if they’re good. This alone can change the game enough … to stay in it:
Ultimately, the decision comes down to your conviction in the business and your ability to secure the resources to scale. If you believe in it, fight for it. If not, selling might be the right call. Either way, don’t let the grind wear you down. This phase is hell, but it’s also where the best founders prove themselves.
A related post here:
