Q&A

The interesting thing is how little time really goes into meeting new startups. For most VCs, most of Monday is used up on administrative matters and seeing pitches for deals that might get ...

The bigger ones do. Most of the bigger, more established funds maintain relationships with the leadership and corporate development departments of the top tech leaders. They can’t magicall...

See the future, crisply, clearly and directly. And a big one at that. 99% of founders can’t do this. They can’t crisply tell you how they’ll be running a $300m+ARR business in 7–...

Yes. Boy sales is hard. It’s being told No a lot. It’s have literal, or virtual, doors shut on your face. It’s figuring out how not to be a pest — yet still be a pest. It actuall...

I think Pawel’s answer eloquently explains all the technical reasons why. Let me simplify further: convertible notes are there to simplify your life — at the expense of some deferred...

Yes. In my first start-up, the VCs pulled our term sheet between signing and closing. They had a legitimate reason — our COO had pulled out of the deal. Which was my fault, for recruit...

Well Auren Hoffman’s answer is amazing and textbook. Just read that. Let me add one nuance: If you are fundraising in July / August, maybe just be less dogmatic. If you are pitching a larg...

Free Trials are good — if they are good. Meaning, if a prospect, or at least, a subset of prospects, can have an amazing user self-guided user experience on a trial, then do it. At lea...

Try to get to $1m in ARR by the end of the second year. Faster is better, of course. But if you can get to $1m by then, it all works out: You can raise more money then, if you want. You’ll...

Nothing. We’ve all been there. In SaaS, this typically happens somewhere between $3m and $8m in ARR or so … finally, you have enough customers, enough of a mini-brand, enough going on to...

I can share my experiences, FWIW. One was inspiration, the other calculation. Both worked. For my first start-up, we purchased / licenses a dormant technology from a larger start-up. They ha...

No. At least, not once you hit scale. Once you hit $10m ARR, growing at a fast rate, no one cares where you are headquartered. Not really. You’ve proven you can scale from anywhere, or at ...

It’s a great question and you should ask the VCs you meet. The later the stage, the more the answers will converge. For me, especially as an ex-SaaS CEO, the one risk I usually will NOT ta...

Bear in mind that until a business gets fairly sizeable — there are no great comparables, no great valuation metrics. Once you hit $10m, $20m in revenues, you can start to use public c...

Don’t do this. At least not for me, at least not IMHO. It’s a negative. A super warm intro is great: “Jason, your good friend and past co-investor Linda here. ABC Corp is the best star...

Ask. I can tell you that personally, generally speaking, I am happy to buy out angels from earlier rounds. I’ve done it twice this month, in fact. Why? Because almost always, I want to buy...

Yes — but let me add a caveat. The further you are from “management” in start-up, the fewer skills you will really learn to start your own start-up. That’s still OK. But if you c...

Well, of course any well established product like NetSuite and many others will feel a bit old and have their shortcomings. NetSuite is almost a 20 year old product, as is Salesforce, Concur...

Here’s my list. Admittedly, much is obvious on it: Founders can’t work together, and/or are dysfunctional. It’s over, at least eventually, if you don’t make a change. Best case, one ...

The cost of running a start-up in San Francisco is 2x Paris, London, almost anywhere. It’s really nuts. So at the end of the day, you should only move to SF if the value of those increased...

Focus on one thing that truly is 10x better — and that matters. That can influence the buying decision. Competition is stressful, but not all bad. Competition helps define a market. An...

At a contractual level, often but not always, there is a clause that requires the Board to approve the compensation of the CEO (but not other employees). At a practical level, the CEO report...

Adding enough value the first year. If you can’t build it, can you: Sell it? That’s worth it. If you can bring in all the first customers, that’s a magical skill. Design it? Head of Pr...

It is better to be an entrepeneur. Entrepreneurs create amazing things that change our lives. This is the impossible part. This is the magic. This is what creates 1,000s of jobs. Creates VPs...

There are two scenarios where you must learn Salesforce. If you don’t, you are squandering an opportunity: First, are you building or working at a SaaS company? If so, you “must” learn...

Not Quora, but we’ve set 2+5 other core goals. For the 2018 SaaStr Annual, our goals are: $10m in top-line revenue >10,000 attendees (nominal target 20,000) 20% gross margin (minimum to...

Assume you can’t kick out investors. And plan accordingly. There are some limited exceptions, especially if you do nonstandard types of convertible debt. But for the most part, you are stu...

Of course not — but the big difference is an IPO usually doesn’t feel dilutive. If a company sells $200m of its shares in an IPO at a $2 billon valuation, everyone’s shares are wor...

My toughest times: COO pulling out after signed term sheet — VCs then pulled term sheet. This of course was my fault — I hired the “wrong” COO. But boy it was tough. I had 9 employee...

Read Leo Polovets’ answer for a great blow-by-blow in a pitch. Let me add one key insight to “Full Partnership” / Monday style pitches. The ones where everyone is there. Usually, these...

We’ve all been there. The fairly crappy, “my product is so great”, outbound random email to 30–100 folks when you are trying to get your start-up off the ground. That never reall...

Talk. Dysfunctional co-founders don’t talk. Not for real. They stew. They get passive-aggressive. They email. They Slack. But they don’t talk. I don’t mean talk in group settings, or a...

Of course not. However, it probably does mean the company is not a “cookie cutter” success story, i.e.: Hot space Strong CEO and management team, ideally with right background At $8m-$10...

They tend to be old. Their technologies and approaches, at least. The good thing in SaaS about getting to $100m ARR is you basically become unstoppable for another decade, at least. Look at ...

Of course not. In the SaaS/B2B world, AppDynamics, which was just acquired for $3,700,000,000 had no co-founder. Zoom, one of the fastest ever in SaaS from $0 to $100m in ARR, had no co-foun...

Don’t sweat it. But. Find another. First, of course you are at an extreme concentration risk. No VC, or at least very few, would want to invest, for example. It’s way too risky if you lo...

You will lose friends on many levels if you build a successful start-up. If you co-found a company with friends, it’s likely one of them won’t go the distance. And it’s likely that wil...

The best time to quit is the earlier of (x) 6 months from now or (y) at any time when the other founders ask you to. Given that you’ve decided to leave, it’s time. It’s time to move on...

The right answer is: as soon as the company can afford it. Taking a market salary when cash is very tight is, at best, penny wise and pound foolish. If you own 20%-30%–50% of a company...

I think Silicon Valley likes suits, and in general, getting “dressed up” a lot more than a few years ago. In the “old” days (8–10 years ago), not wearing business clothes, let ...