Q: When should a bootstrapped startup hire a (CFO, COO, CMO)? How can a CEO hire those C-level positions for the first time as a CEO and entrepreneur? What skills should he or she look for?
Here are some rough rules:
- You want a VP of Everything (Sales, Marketing, Product, Eng) by about $1m-$2m ARR. Not all at once, but you can benefit from all of them by then. A bit more here.
- You want to start adding CXOs around $15m-$20m ARR. The CFO is often the last, the CMO often the first “C” level officer.
Now how does bootstrapping change this? Not that much. Certainly, it slows down how many VPs you can hire after $1m-$2m ARR. You probably have to hire them one at a time, a bit slowly.
But by $10m ARR, bootstrapped SaaS companies mint enough cash to fund all these hires. $10m ARR bootstrapped companies start to converge and look a lot like $10m ARR venutre-backed SaaS companies. This is the key insight. If you are bootstrapped in SaaS, you won’t have enough capital to build your management team as fast you need to for quite a while. But as you approach $8m-$10m ARR, there will be enough revenue. And no excuses not to have a fully built management team by then.
And thus the next level C-level hiring process ends up being about the same, bootstrapped or not.