In SaaS at least, I’ll give you one metric that is fairly reliable: How many dedicated sales professional do they have, just 100% selling the competitive product? If it’s > 20 or so, ...
I think this is a false choice. Every successful founder I know thought his or her venture was not that risky — at least when she started it. Sometimes, oftentimes, 6–9–12&...
Let me suggest one simple rule: don’t take an investment from any investor where the amount is > 1%-2% of their net worth. If you do, it will be nothing but headaches. They will stress ...
You are right, do not raise venture capital. $150k in MRR is a time when you will become attractive to many investors, and perhaps, for the first time be “fundable”. But that’s not a r...
Yes. Flash requires legions of very expensive engineers to maintain its many versions on many platforms, and makes Adobe almost no money and has no brand or other value at this point. On a p...
I think it’s harder, but when done right, it’s wonderful. One model is a SaaS company that is 80%+ focused on SMBs. I’ve invested in Automile and Pipedrive here as two examples which a...
We in essence ‘bought’ the patents and more importantly, the related IP, from a company we sort of spun-out of. The assets were no longer being used and appeared to have $0 in market val...
Very roughly, it is cut in half. Recurring revenue companies are valued at about 2x (and sometimes much more) their non-recurring customers. For a very visceral example, Adobe’s stock has ...
No one cares. At least, not in Silicon Valley. Unless it was a spectacular failure (i.e., lost > $20m+, or maybe these days, more). This is mostly good news. You can start another, and if...
Because you should always be asking yourself, if everyone in a senior role is the right person for the next stage. Including you. Most of your VPs won’t scale all the way from $1m to $100m...
I’ve come to almost exclusively invest in founder-CEOs that are engineers. Or at least where the co-founder CTO is a true equal partner to the CEO. Why? Well to get something off the groun...
The #1 key: design a template that is simple enough you can send it out on the first of the month, every month. That way you will actually get it done. Beyond that, in SaaS, I love a short u...
I think $800k or so is a good starting point — once you are at say $1m-$2m in ARR. Rough-and-tough, a quota of 5x the OTE (on target earnings, i.e. base + bonus) is a great target to a...
Probably the most important thing to understand is that in 95%+ of tech companies, the “M&A team” does not drive M&A. Instead, they implement it. M&A is usually driven by eit...
Here’s the thing: most VCs, at least, most early VCs … know if they want to invest mid-way through the first meeting. Not for sure, but they’ve made a tentative conclusion they want to...
CEO. Although, perhaps say it in a neutral tone, with no bravado. I always thought the title was a bit silly when running tiny start-ups. But I missed an important point: Customers, Prospect...
It’s a huge risk. A lot of “pretty successful” startups all sell at about the same point in time … about 5 years in. Because the founders get just too burnt out around Year 4 … and...
I’m sure there are some, but to save your sanity, I’d suggest that 95%+ of the SaaS companies I work with find that paid ads “perform” in SaaS (i.e., they deliver customers), but: (x...
At the end of the day you have to solve for two things: A plan that gives the reps a living, fair wage; and A plan that you know and feel is accretive to the company. It can be and feel toug...
In the early days, when Cash is King, I paid the sales reps a full commission on all cash paid up-front. And I paid nothing on multiyear deals without cash upfront, because we had basically ...
I think so. First, YC has spawned many of the top next generation of B2B leaders, especially non-enterprise ones, from Stripe to DropBox to Gusto to Plangrid etc. Add in sales-driven B2D lik...
Ah, who should Customer Success report to. It’s not super simple. There are generally 3 options in the early and middle days: CEO. VP of Sales (once you have one). VP of Something Else. Fi...
Of course. If the founder-CEO is great at sales — not just revenue/product sales, but vision sales, stock sales, and recruiting sales as well — then as long as the “technical...
I say Usually Yes. Don’t send your deck to an investor you haven’t heard of. Don’t send your deck to an investor that hasn’t asked for it. But a good investor, at a good firm, that a...
Equity should be “fair” for cofounders — that’s the only way to do it. That doesn’t mean it should be equal. In this case, you’ve joined late at the 5th cofounder. 3%-5% cert...
There are so many mistakes I made in the early days. But the #1 thing I wish I’d told myself is this: getting from $10m to $100m in revenues is very doable. I knew a few things as a founde...
You’ll know by your first crisis, or at least the second, if your co-founder is really as committed as you. It may be murky until then. A time will come however, when your startup almost d...
The percent that want to. Annual billing is a wonderful thing. In the early and middle days, it’s magical for cash flow. It decreases churn, at least in terms of timing (even if they churn...
No. I got this backwards, as do most founders. We think “being vested” protects us from VCs. Yes, there can be some corner cases where that is true, I guess. Maybe. Some times. But what ...
It is very common in true enterprise software, i.e. sales of complex, expensive solutions to large problems. And it’s OK, up to a point. When you are selling a $500k, $1m+ piece of softwar...
I think what alarms everyone is when there are too many startups funded with > $10m-$20m in venture capital, without a true break-out leader. As soon as you have 4–5 competitors in ...
Plenty. Just in SaaS, I was, Byron Deeter at Bessemer was, obviously the entire Andreesen partner team was, David Skok at Matrix (OK not Bay Area) was as were many of the partners there, etc...
I don’t know Elon Musk, but he was an intern at the first start-up my co-founder worked at, a super-capacitor startup (that I think failed). I assume this was during college: She would tel...
Try everything. Then, double down on anything that works even a little. That may sound obvious, but what I mean is, most start-ups scale roughly the same way after $1m in ARR or so, at a giv...
No. In both my start-ups, I was the only founder to contribute cash. It didn’t matter. Yes, you need money. But writing code, bringing in the first customers, raising seed funding, recruit...
A few thoughts: You will lose all your money, almost certainly. If you are dabbling, it almost certainly will be a very early stage company. Most of these fail, anyway. The very best ones yo...
In the “old” days, there was a rough rule that as soon as you are bringing on more than 1–2 reps a quarter, you needed to hire a director of sales ops. That at that point, at a min...
First, bear in mind acquisition are quite rare. The vast majority of startups will never get one acquisition offer, let alone a good one. Having said that, at a high level, three things you ...
Each story is different, but there is one clear penultimate step: recruiting and managing a small team yourself. What 95 times out of 100 is a recipe for failure is jumping straight from suc...
I love Joel Onyshuk’s answer, just read that one 🙂 I have learned a few things from the sponsors at the SaaStr Annual over the past four years. There’s a good summary from one here: H...