Dear SaaStr: When should a bootstrapped startup hire a (CFO, COO, CMO)?

Dear SaaStr: 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 $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 ARR or so.  But after that, 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.

So the C-level hiring process ends up being about the same.  It’s just, you start off hiring the first, often stretch VPs a little more slowly.  And one at a time.

More here:

What Order Should You Hire Your Management Team In?

Published on September 26, 2022

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