You can kind of back into it:
- Assume a 10% commission rate, maybe 15%.
- That means, to make $1m, an AE would have to close $7m-$10m in net new business. Maybe $5m if there is more generous comp plan in the earlier days.
- So it gets hard until a startup starts to cross $50m ARR … there just isn’t that much total net new revenue to close, that one AE can close $5m-$10m of it.
But as you pass $50m and then $100m in ARR, there probably is room for 1–2 AEs to make that much, possibly more if you are doing really big deals.
Every SaaS company I’ve been around that has gotten into that zone has the day when one rep finally brings home a $1m payday. It’s often through a big multi-year deal. Close say a huge, $2m deal for 3 years, that’s a $6m contract … that alone could get you a $1m payday if the commission is relatively high.
But the company / startup has to get big enough to support that sort of deal. And you have to be the best rep at the company at closing them. Maybe 1–2% can do it. Which makes intuitive sense.