What is considered a fair or happy medium secondary amount for the founders to take off the table at a Series B VC funding round?

I’ve come up with a rough guideline:
  • If valuation is > $100m pre,
  • And founder sells < 5% of her holdings,
  • It’s not that big of a deal, and probably a good idea. If it makes things less stressful for the founders, that’s better for everyone.
Where I get anxiety is if it’s neither of those too cases. If the founder is selling > 5%, she’s not just getting a little liquidity … she’s selling out a material amount of her stake. That’s worrisome. And if the price she or he is selling is less than $100m pre, it sort of tells me they aren’t really building a Unicorn. If you think you are building a Unicorn, why sell > 5% of your shares at < 1/10th the exit price? No one would. It’s just getting good. Anyone would want to hold in that scenario, other than to get some
🙂
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How big should the addressable market be to go into vertical SaaS? Is it a good idea to avoid the addressable market if it appears small?

I try to look at two things in Vertical SaaS:
  • Will everyone in the industry use it? and
  • Is the app so core, they can charge $20,000+ a year for it?
Even a fairly small business can pay $20,000 a year for one app, usually. Oftentimes, only one. But if it’s the core ERP of their business, what they truly run their company on, that one app … they often can afford $20,000+ and up. If I see evidence of that, I get very bullish, even if the market doesn’t seem huge. Now what if you just can’t get $20k+ up from SMBs and SMEs in a vertical? Then market size starts to be super important. There’s a whole other category of apps SMBs and SMEs can afford that cost $99-$299 a month or so. There are a ton of apps that end up being $3k-$6k a year. The good
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If you just received your Series B funding (10-15 million USD) for your B2B SaaS company focusing on SMEs, what would you use the funds for?

If you’ve raised $10m-$15m, I’m assuming you are somewhere between $2m and $10m in ARR (revenue). The answer is almost always the same: double down on what is working. You’ll be tempted to use the capital to enter new markets, to expand into new segments, to try out new verticals. Tiny experiments are OK. But almost always, the fastest and easiest way to go from $1m to $10m is to double down on what is working:

The Rising Stakes in SaaS

Last week, I participated in two discussions about the changes in the SaaS world. I believe they are fundamental. The most important force shaping the industry today is competition. The level of competition in many core SaaS segments is intense. Why? The SaaS era is about 20 years old. Salesforce was founded in 1999. Since then, many major categories of software have been saasified. Venture capitalists have financed many of those businesses. Over that 20 year period, annual SaaS investment has increased 20x, peaking in 2014 at $7B. Those venture dollars have financed a panoply of competition. In 2012 ChiefMartec landscape counted 350 vendors selling to sales and marketing. Today, that figure is 5000. The landscape is so vast - and the logos so minuscule - that it’s useful only as an illustration of competition. This sea of SaaS startups have reshaped the market. Incumbent client/server technologies have lost their
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SaaStr Podcast #147: Shan Sinha, Founder & CEO @ Highfive On Why Payback Period Is The Critical Metric

Shan Sinha is the Founder & CEO of Highfive, the startup that quite simply makes insanely simple video conferencing. They have raised over $45m in funding from some of the best in the business, including a16z, Lightspeed General Catalyst, and Founder Collective, and then individuals including Aaron Levie, Drew Houston, and Marc Benioff. Prior to Highfive, Shan was the Group Product Manager for Google Apps for Enterprise, which he joined following Google’s 2010 acquisition of his prior company, DocVerse, which later became part of Google Drive. In Today’s Episode You Will Learn:

Blind Hiring: How to Implement Inclusive Hiring Strategies

Hiring is top priority for most businesses – and that’s definitely true for OpenView’s portfolio companies. But, have you ever thought about what your job descriptions say about your company or your culture? Or how the way you write job descriptions might discourage qualified candidates from even applying? Well, according to an internal report from HP, men apply for a job when they meet 60% of the qualifications listed, while women will typically only apply if they meet 100% of the requirements laid out in a job description. HP attributes this phenomenon to the fact that women tend to be ‘rule followers’ – in other words, women will only apply to jobs for which they are certain they have the requisite experience. But as a Talent Manager, I’ve seen plenty of beyond-qualified women who are in fact perfect for jobs despite not having all of the “required” skills or
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