- A CEO better than me;
- With potential for outsized unit economics; and
- A handful of happy customers.
It’s a great question and you should ask the VCs you meet. The later the stage, the more the answers will converge. For me, especially as an ex-SaaS CEO, the one risk I usually will NOT take is product-market risk. I need there to be at least 10 Unaffiliated Customers (maybe 5 if your deal size is high). Because what I’ve learned is that once you know the playbook, you can execute with the right CEO, especially if you help recruit a strong management team early. But getting anyone to buy yet another B2B product? Creating the first, unaffiliated customers from the ether? That’s not a playbook. That’s magic. (OK, that’s indeed a playbook too, but a very different and less predictable one. I still call it magic.). I’ve also learned that all but the best SaaS CEOs get tired after 4–5 years. They aren’t able to reinvent themselves. — the odds they build a unicorn in SaaS are basically 0%. Because it takes 7–10 years minimum in SaaS to get there. and I’ve also basically learned that selling a $60/month product really is 4x easier than a $15/month product (what I sold). It shouldn’t be, but it is. So I look for: