What is a typical organizational structure for a SaaS startup with sales reps?

A rough structure from 1–25 sales reps:

Early days:

  • CEO acts as VP of Sales.
  • CEO hires 2 reps, in the beginning, each barely pays for themselves, but by months 4–6 they are able to close 3x-5x their total compensation.
  • Once 2+ reps can do 3x-5x their comp, the model gets pretty efficient.

Then:

  • Have to scale from reps 3–8 or so. CEO often struggles to manage so many directly.
  • CEO starts looking for true VP of Sales before $1m, ideally hires one by $1m in ARR.
  • VP of Sales hires next 5–10 reps herself.

After 8–10 reps, you have to add more management:

  • A VP of Sales can probably only manage 6–8 reps and a handful of SDRs herself.
  • So for each 8 AEs or so, and 8–10 SDRs, you need a Director of Sales.
  • You also start specializing more here. Segmenting by customer size, and sometimes geography.
  • By 15 sales reps, you probably need a first head of sales operations to handle training, onboarding, compensation, quotas, etc.

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Published on November 16, 2018

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