"Bootstrapping wasn’t a magical choice for Mailchimp. No one would fund them."https://t.co/I0X6sJVY5t — Jason ✨Be Kind✨ Lemkin  (@jasonlk) May 22, 2023   Dear SaaStr: If you started a new company today how long would you be bootstrapped for before seeking funding? If I were starting today — and in a sense, I’m running this…
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Q: How do VCs pick which seed investments to make? There is one common factor, that founders know, but often lose track of in their pitch: every VC, at any stage, is looking for outliers. No matter the price or how early or late. Your pitch, your team, your metrics, your market position, your vision,…
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Dear SaaStr: How Do You Overcome “Stage Fright” as a First Time CEO? Don’t worry about stage fright. It’s real. I used to have it. And … you’ll get over it. I remember the very first time I had to present to a Fancy Board Meeting. I wasn’t a founder yet, but I was told…
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Dear SaaStr: How Can a SaaS CEO Tell Which Customers are 10+ Year Customers? I think it’s fairly easy. Look for: Are they running an entire division or group (or more) on your product? Is the use case mission critical — even if niche? I.e., would the business be at risk if you went down…
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Very few downsides to getting to know the CEOs of your competitors — Jason ✨Be Kind✨ Lemkin  (@jasonlk) May 13, 2023 Dear SaaStr: Suppose the CEO of my competitor contacts me, interested in acquiring my app (privately owned). What steps would I take to avoid giving away proprietary information before the sale closes, if…
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Dear SaaStr: When Searching for a Co-founder, How Do You Know You Found The Right One? I think it boils down to 2 key factors: Someone that is both very good at, and better than you, in several key functional areas. If you are good at coding, she is good at sales and customers. Or…
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The ultimate test for every SMB SaaS vendor is if you are OK losing your largest customers as they scale If you aren’t, it’s hard to stay truly SMB over time If you are, you have to live with elevated churn, lower NRR. And the loss of your top logos, again and again. — Jason…
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Q: What type of CEO is the most difficult for the Board to work with? So founders, in many cases, were taught some of the wrong lessons in the Boom of late ’20 to early ’22. They were taught you could fundraise in a week. That you could sort of hide things. And that you…
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Q: Dear SaaStr: How Long Should a CEO Continue Being the Head of Product? Roughly, for me, for as long as it’s about a 10-hour a week job. Or often, maybe only up to $3m-$5m in ARR or so. These days, especially, I see way too many SaaS companies at $8m-$10m ARR or beyond without…
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Dear SaaStr: What Were The Top Unforced Errors You Made Raising Your First VC Rounds? A few unforced errors I made as a founder pitching VCs: Meeting too early. I pitched a few friendly VCs before EchoSign was really ready. Sometimes, that’s OK, but not with these 2 funds. They wanted us to be at…
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Dear SaaStr: What is the Highest Position in a Venture Capital Firm? The “Managing General Partner” or “Managing Director” or a similar title. In tiny VC firms, 2 partners may truly be equal and both run the place. But almost all firms that are a tiny bit bigger have different types of partners. At the…
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I'd say 95% of founders still don't fully understand how tough the Series A/B/C markets are right now They think they understand But they are still too bullish — Jason ✨Be Kind✨ Lemkin  (@jasonlk) May 8, 2023 The pace of VC investing today has dramatically slowed down, especially post seed stage. You do have…
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Dear SaaStr: Is it rude to ask for a raise when there’s no salary increase coming up at work place after six months of joining? In a Big Company, in my limited experience, I do think you need to be thoughtful here. There are rules. You can threaten to leave once and often get a…
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Dear SaaStr: As a salesperson, if you sell a multi-year SaaS deal, does the whole amount count towards your current year quota? Or just the part attributed to your current year? Approaches vary here. First, what you pay on vs. quota retirement can vary. On commissions / pay-out: For start-ups where cash matters, I strongly…
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Dear SaaStr: Is It Acceptable for VCs to “Ghost” Founders who have invested so much time and effort with them? How should founders respond to this? I understand the frustration, and it’s annoying, but you have to change your thinking. Working with VCs is sales. It’s a founder trying to sell shares to a VC….
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Q: Dear SaaStr: What Are The Best and Worst Parts of a Startup? The best parts: Having a great team. Once you really have a great team, not just some great individuals — magic happens. It’s truly special. Lifelong relationships with the team. Building long-life friendships grounded on a multi-year journey together. Pretty powerful. Relationships with other CEOs. The…
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Dear SaaStr: How Do I Create Urgency in Sales. When There Really Isn’t Any? Creating urgency is an art. Most founders are great “middlers”. They are great at explaining not just what the product does, but what it can do to solve your problems. No one is better than a founder at this. And then…
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Dear SaaStr: Is it OK to Modify the Standard SAFE Form? There’s an issue I see blow up several times now as an investor. It’s when a founder takes a so-called standard SAFE … and modifies it, and doesn’t really tell the investors it is sent to. Here’s what I’ve seen over the years: Removing…
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Dear SaaStr: How much does a venture capitalist make? It varies widely. First, are you talking about cash or “carry” (i.e., share of the gains)? The partners in a fund generally keep 20% of all the gains — once all the fees are paid back (this can be higher at top funds). But how that carry…
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Q: Dear SaaStr: How Do I Compete with a Company that has Unlimited Capital — and I Don’t? First, does your highly-funded competitor have a dominant brand yet? If not, it may not matter. There is no “winner” yet. The #1 brand trumps capital. But if they have the strongest brand and you aren’t even…
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Q: What are your top tips for making life easier as an early-stage SaaS CEO? For a start-up CEO, here’s my list, force-ranked: 1. Spend more of your time recruiting VPs and your senior team — and help in general. At least — 20% of your time. More on that here. Your life will be…
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Q: How do you deal with bus factor in a startup? We are losing an employee which had a cornerstone role but he was tackling this area alone. Goodness, this is one of the toughest parts of scaling. I remember Aaron Levie, CEO of Box, and I discussed this at one of the SaaStr Annuals,…
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Dear SaaStr: How does a CEO/founder/owner pick their salary? I’ll share my stories. In my first start-up, we raised $9m in our seed round — a large first round, but the times were different. The VCs set my salary without discussing or consulting with me (a different time, indeed). My prior salary as a VP…
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Dear SaaStr: What Are The Things Startups Just Have to Get Right? Let’s break it down. Let’s talk about what you don’t have to get right: Rockstar Founders? Not required. Yes, to build the next Slack, the next Amazon, the next Tesla, whatever, perhaps you need one of the greatest founders of all time. But…
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Q: What are the pros and cons of working in the venture capital space, and why? There are times as a founder when, if you are venture-backed, you’ll look at your VCs and just see … them working less hard, for a lot more money. And yet taking up a ton of space on the…
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