How often is it for founders to cash out in between raising rounds?

These days, if you raise money at a >=$80m-100m valuation, and are oversubscribed, most bigger Silicon Valley VC firms will offer to provide some founder liquidity. It’s not out of the goodness of their hearts. It’s so they can buy more. Bigger funds want to own as much as they can, and if they can get another 2%-3% more than otherwise, secondary liquidity is a way to get it. Some advice here though:
  • Founders taking secondary liquidity at lower valuations creates huge signaling risk — especially CEOs. If a founder is willing to sell shares at $30m … there is no way I believe you are trying to build a $1b+ company. You are selling way, way too cheap.
  • It’s much, much, much better to be asked. If a founder really wants to sell at almost any price, it’s a flag. But if the VC offers first, and the founder Continue reading "How often is it for founders to cash out in between raising rounds?"

Benchmarks in SaaS for Seed and Series A Rounds in 2017

I’m often asked by founders what milestones they need to get to in order to raise an institutional Seed round or Series A and what size do those rounds tend to be. The short answer is, it depends; but below are some benchmarks I’ve seen, which is based on companies raising in the Bay Area and NYC. Keep in mind, there are always exceptions and outliers! Average Round Sizes: I looked at Crunchbase data for Seed and Series A rounds in SaaS companies in NYC and the Bay Area over the last 2 quarters. NYC:
  • Seed – Average round size – $2M
  • Series A – Average round size – $7.65M
Bay Area:
  • Seed – Average round size – $1.7M
  • Series A – Average round size – $8.6M
Benchmarks for getting a Seed round done: Repeat and proven founders with past success can often raise a seed round Continue reading "Benchmarks in SaaS for Seed and Series A Rounds in 2017"

Benchmarks in SaaS for Seed and Series A Rounds in 2017

I’m often asked by founders what milestones they need to get to in order to raise an institutional Seed round or Series A and what size do those rounds tend to be. The short answer is, it depends; but below are some benchmarks I’ve seen, which is based on companies raising in the Bay Area and NYC. Keep in mind, there are always exceptions and outliers! Average Round Sizes: I looked at Crunchbase data for Seed and Series A rounds in SaaS companies in NYC and the Bay Area over the last 2 quarters. NYC:
  • Seed – Average round size – $2M
  • Series A – Average round size – $7.65M
Bay Area:
  • Seed – Average round size – $1.7M
  • Series A – Average round size – $8.6M
Benchmarks for getting a Seed round done: Repeat and proven founders with past success can often raise a seed round Continue reading "Benchmarks in SaaS for Seed and Series A Rounds in 2017"

Last Day to Sponsor SaaStr Annual 2018 at 2017 Rates — And Pick First!

Screen Shot 2017-03-31 at 9.05.29 AMWe’re on track for 2.2x the attendees at the 2018 SaaStr Annual vs. 2017, at least so far. Next year will be better than ever, and we’re building a dedicated sponsor pavillion right as you walk in and enter the site. Combine the two, and I’m hopeful sponsors get as much as 3x the traffic as they did this year. Renew TODAY, before the month and quarter is out, and you can renew at the 2017 rates … with up to 3x the booth traffic. And you also get to pick booth position first.  First come, first pick. This is the best deal on the Internet folks. More here or email us at sponsors at saastrinc dot com   Screen Shot 2017-03-31 at 9.03.08 AM

SaaStr Podcast #108: Peter Gassner, Founder & CEO @ Veeva Systems On Growing to $500m in ARR

podcast-featured-108-Peter Gassner Welcome to Episode 108! Peter Gassner is the Founder & CEO of Veeva Systems, the industry cloud for life science systems. With just $4m in capital raised, Peter has taken Veeva to almost $500m in ARR and a prominent force in the rising tide of enterprise SaaS. As for Peter, prior to Veeva, Peter was a Senior Vice President of Technology at Salesforce where he experienced the successful IPO of the company and their rise into the most successful SaaS platform in the industry. Before Salesforce, Peter was with PeopleSoft for 9 years where he led a team of 450 professionals to support PeopleSoft’s technology platform. I do also want to say a big thank you to Jason Lemkin for the intro to Peter today, without which the episode would not have been possible. Peter-Gassner_320x3201In today’s episode you will learn:

Psychology Says: Make Your Pricing Fair (or at least appear that way)

Most of us want to feel that we are both being treated fairly and treating others in kind. And sure, some people are always looking for an edge, but humans by nature prefer deals that seem reasonably equitable. And it’s this preference that can have a huge impact on your pricing and how you present it. In behavioral economics, this desire for equity is demonstrated in an experiment where people pair off and one person is given say $10. The first person has to offer to share some of that money with the second person. The second person can then accept the first person’s offer or reject the whole situation and return the $10 bill so that both parties get nothing. Try this with your team and see what happens. Most people will offer between $3 and $5. Almost everyone accepts this offer (a few people will reject $3 or
Continue reading "Psychology Says: Make Your Pricing Fair (or at least appear that way)"

The Most Important Thing I’ve Learned about Writing

The most satisfying compliment the reader can pay this to tell me they feel personally addressed. Think of your favorite authors and see if that isn’t precisely one of the things that engages you, and often at first without noticing it. A good conversation is the only human equivalent.
Christopher Hitchens, a famous journalist, wrote this in his book Mortality. After writing nearly 1000 blog posts, I have to agree. Paul Graham says it a different way. “Here’s a simple trick for getting more people to read what you write: write in spoken language… You don’t need fancy words describe complex ideas.” Dictation is one way of writing the way you speak. Though the technology has improved, this idea isn’t new. Henry James and Joseph Conrad dictated their later novels. This post is also dictated. But, that’s not enough to be engaging. Over the years, I’ve read many books Continue reading "The Most Important Thing I’ve Learned about Writing"

What are the biggest challenges of building a tech company outside of Silicon Valley?

Every Friday, we’re answering your questions about business, startups, customer success and more. Happy Friday! This week’s question is: This is a question that comes up a lot. I started Groove from my house in Newport, Rhode Island. Not San Francisco or Silicon Valley. Not New York. Not Boston. Not really anywhere that would be considered a place with a real “startup ecosystem.” At the time, I did find myself thinking a lot about the challenges that being “off the beaten path” came with, but in retrospect, those challenges were mostly superficial ones. Sure, some investors are less likely to find your company interesting enough to look at because of your location. You don’t want those investors anyway. The tech press is less likely to cover you. But tech press coverage, overall, has probably been the least valuable marketing exposure that we’ve had. You can’t find top talent by Continue reading "What are the biggest challenges of building a tech company outside of Silicon Valley?"

The Key to Saas Pricing: Choosing the Right Pricing for Your Customers

Editor’s Note: The following is an excerpt from Clearbit’s new book Data Driven Sales: How the Best B2B Companies are Using Data to Grow Sales Faster. You can read the full chapter here. In September 2009, Andy Wilson learned that Inc. Magazine had named his company, Logik, #181 on their list of the fastest growing businesses in the U.S. He had grown the e-discovery services company 1,067% over the prior three years, to $4.4 million in revenue. It was profitable, too. Logik had only 8 employees and brought in $3 million in profit in 2008.
We saw the future and it was not humans managing hard drives and creating databases. That’s going to be done by software.
That same year, the recession hit and Andy made an unconventional decision. He decided to shut down Logik’s core business and transform the company from a services business model to Software-as-a-Service (SaaS).
Continue reading "The Key to Saas Pricing: Choosing the Right Pricing for Your Customers"