How Revenue Multiples Really Fall After Each VC Round
SaaStr
by Jason Lemkin
6h ago
So Michael Ho did an analysis here of Carta valuation data in a way that IMHO visualizes in a way so many founders miss.  And misunderstand. At the end of the day, the top SaaS companies IPO and end up trading at “standard” ARR multiples.  Today, on average that’s about 6x.  Not great, but it is what it is. But they don’t start there.  Seed rounds can’t really be done at 6x ARR typically.  A startup doing $300k in ARR is rarely valued at $1.8m post-money these days.  If they raised $2m, that would be a – $200k pre-money valuation! So ARR multiples are in a sense i ..read more
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6 Questions Founders Should Ask Themselves to Drive Value from Generative AI with Base10 Partners
SaaStr
by Amelia Ibarra
6h ago
Generative AI is a platform shift where models can take inputs such as text, image, audio, video, and code and generate new content into any of the modalities mentioned. TJ Nahigian, co-founder and Managing Partner of Base10 Partners, and Luci Fonseca, Partner, deep dive into the current GenAI landscape, incumbents vs. startups, and the six questions founders should ask themselves to drive value from GenAI. For some context, Base10 is a research-driven investment firm focusing on companies automating the largest sectors of the real economy. They’re trying to figure out what will happen with Ge ..read more
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The Best Sales Execs Are Great at The Interview Process, Too
SaaStr
by Jason Lemkin
1d ago
If a sales exec makes it anything but effortless to schedule a job interview with them, Basically it won't work out — Jason ✨Be Kind✨ Lemkin  ?? (@jasonlk) February 13, 2024 So I remember years ago I went to hire my first VP — ever.  To make it even tougher, I’d never hired anyone for this role at all (a VP of Ops).  I went to reach out to the best candidate I could find by a cold email. I went to my ex-boss and mentor and asked him how I’d know if he was interested. “Oh you’ll know.  He’ll respond ASAP.” Now as the years have gone by, I’ve learned that’s not 100% true when y ..read more
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5 Interesting Learnings from Braze at $500,000,000 in ARR
SaaStr
by Jason Lemkin
2d ago
So Braze is one of the quiet winners in today’s SaaS and Cloud world.  At $500m in ARR, they’re growing a strong 33% and trading at about $6 Billion, so they’re in the 10x ARR Club. When the average public SaaS company is still stuck at 6x. Braze is a top leader in enterprise mobile marketing and communications.  The logos are strong, and the NRR is good.  They sent a stunning 37 Billion messages between Black Friday and Cyber Monday! Let’s dig in. 5 Interesting Learnings: #1.  $500k+ Customers Fuel Growth, Up 28% — And NRR is 121% There A story of many SaaS and Cloud le ..read more
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What Venture Capitalists Look For in Leaders: Tips from a Founder-Turned VC with Ridge Ventures
SaaStr
by Amelia Ibarra
2d ago
As a founder, you may wonder what venture capitalists are looking for these days. In a lineup of all Enterprise B2B SaaS companies with similar features, investors can only choose one or two per year. So what drives that decision? Let’s find out with Akriti Dokania, Partner at Ridge Ventures, from last week’s Workshop Wednesday, held every Wednesday at 10 a.m. PST.  Akriti has spent six years doing VC with thousands of teams. She’s also sat on boards with 15 or 16 companies, figuring out what does and doesn’t work for her as an investor.  A Founder’s Story Nine years ago, Akriti was ..read more
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Annual Layoffs: The New “Best Practice”?
SaaStr
by Jason Lemkin
3d ago
Are layoffs now just institutionalized in Silicon Valley? And if so, what does that mean? Instacart was one of the 3 Tech IPOs to go out late last year, along with Klaviyo and ARM. And then crushed the last quarter, with $800m of revenue and a stunning $200m of EBTIDA! At the same time — they announced 7% layoffs to get more efficient. Now, 24+ months ago, this would have been a shocker. Today, it’s the New Normal. Everyone has to get more efficient. The average SaaS public company is now at $300k in revenue per employee, up from less than $200k in 2021. ServiceNow is over $400,000. Canva is ..read more
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Dear SaaStr: Does a Big Exit Make You Happy?
SaaStr
by Jason Lemkin
3d ago
Dear SaaStr: Does a Big Exit Make You Happy? Well here in the SF Bay Area … we live in a strange place. Folks I know with “infinite” money sort of fall into 3 buckets: Category 1:  Still Building Stuff.  For Whatever Reason.  In their DNA. This is who they are.  Oftentimes, they aren’t really happy.  But they thrive here.  Elon Musk could hand off the reins now, couldn’t he?  Zuck could give the keys to Sheryl Sandberg and things would be A-OK at Facebook, I’m pretty sure of that. Jyoti Bansal sells AppDynamics for $3 Billion+ to Cisco.  And then?&nbs ..read more
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How to Double Your Magic Number and Increase Your Go-to-Market Efficiency with Sapphire Ventures
SaaStr
by Amelia Ibarra
3d ago
Go-to-market (GTM) design and efficiency are sometimes overlooked, but they’re a critical driver of any SaaS business. Rajeev Dham and Karan Singh, Partners at Sapphire Ventures, and Jane Lee, Vice President at Sapphire walk us through how to double your “Magic Number,” a shorthand for your sales and marketing efficiency. Magic Number is your growth in ARR over a quarter divided by the sales and marketing spend in the prior quarter.  Previously in SaaS, it was widely seen that anything > 1 was healthy if you were venture-backed, and anything > 1.5 is was seen as perhaps too capital ..read more
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Remember, When A New Hire Doesn’t Work Out — It’s Always Your Fault
SaaStr
by Jason Lemkin
4d ago
So this is a simple post, in some ways, but I think an important one for leaders. These days, it seems like even more folks are quitting, not working out, etc. etc.  We all saw the Cloudflare sales rep on social media not work out.  And there were so many comments, thoughts, and more. It reminded me of a golden rule it took me years and years to figure out: If a new hire doesn’t work out, it’s always 100% your fault What do I mean?  Well, as frustrating as it can be when a new VP, a new Director, a new IC doesn’t work out … it was your fault not doing enough diligence: Did you ..read more
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Top SaaStr Content for the Week: 2 New Podcasts, What’s New at Drata, LIVE Workshop Wednesday and lots more!
SaaStr
by Amelia Ibarra
5d ago
Each week, we round up our most popular content so you can catch up on anything you may have missed. Check out this week’s top blog posts, podcasts, and videos: Top Blog Posts This Week: The Thing Is, Maybe 10%-15% of Venture-Backed Startups Are Still Running the 2021 Playbook. In 2024. 7 Things to Do When You’re Struggling The #1 Hack To Making Sure a VP of Sales or Top AE Will Work Out Dear SaaStr: Is It Normal for a Founder CEO to End Up With Just 10% Equity? Tech and Startups Have Changed. Do Founders Still Come Last? Top Podcasts This Week: 1. SaaStr 725: Mastering High-Volume, Low-CAC ..read more
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