Dear SaaStr: When Should a Bootstrapped Startup Hire a CFO, COO, CMO, etc.?

Here are some rough rules:

• You want a VP of Everything (Sales, Marketing, Product, Eng) by about $5m ARR, and ideally, Sales and Marketing well before that. 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? Importantly: not that much in the end, although a lot at first.

Certainly, bootstrapping slows down how many VPs you can hire until and after $1m-$2m ARR.

You probably have to hire them one at a time, a bit slowly.  You may only be able to afford one VP at first, even at $2m-$3m ARR or so.  But after that, if you are growing 50%+ and have 100%+ NRR … you’ve built an engine.  Even if you don’t have quite as much fuel as if you’d raised venture capital.

And by $10m ARR, bootstrapped SaaS companies generally generate enough cash to fund all these hires at almost the same pace as venture-backed ones.

$10m ARR bootstrapped companies start to converge and look a lot like $10m ARR venture-backed SaaS companies.

Because $10m a year at 80% gross margin = $8m a year to invest.  And so on.

So the C-level hiring process ends up being about the same after $10m ARR or so.  It’s just, you start off hiring the first execs much more slowly.  And one at a time.

More here: