Top Hack: Keeping a “Stub” Source of Capital in Your Back Pocket

One of the wonderful things that has changed in the years since I was running my own SaaS company is the rise of “stub” sources of capital.  Investors that, for a variety of reasons, are OK buying fewer shares than the average investor, and often, outside of the timing of traditional venture rounds. The most visceral example is how the top startups out of YCombinator Demo Day raise money.  For the top YC companies, there is always more investors than room to invest, and the startups are often fairly capital efficient.  This combo means they can leverage Demo Days to fine tune the exact amount of capital they want to raise. I wish I had had that luxury.  I didn’t have trouble raising traditional venture rounds.  But the gap in between rounds was tougher. When EchoSign was at about $6m in ARR and growing nicely, and cash flow positive,
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Continue reading "Top Hack: Keeping a “Stub” Source of Capital in Your Back Pocket"

Top Hack: Keeping a “Stub” Source of Capital in Your Back Pocket

One of the wonderful things that has changed in the years since I was running my own SaaS company is the rise of “stub” sources of capital.  Investors that, for a variety of reasons, are OK buying fewer shares than the average investor, and often, outside of the timing of traditional venture rounds. The most visceral example is how the top startups out of YCombinator Demo Day raise money.  For the top YC companies, there is always more investors than room to invest, and the startups are often fairly capital efficient.  This combo means they can leverage Demo Days to fine tune the exact amount of capital they want to raise. I wish I had had that luxury.  I didn’t have trouble raising traditional venture rounds.  But the gap in between rounds was tougher. When EchoSign was at about $6m in ARR and growing nicely, and cash flow positive,
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Continue reading "Top Hack: Keeping a “Stub” Source of Capital in Your Back Pocket"

Why I Usually (Not Always) Prefer Customer Success to Report to the CEO

Ah, who should Customer Success report to?

It’s not super simple.

There are generally 3 options in the early and middle days:

  • CEO
  • VP of Sales (once you have one)
  • VP of Something Else. Finance sometimes. Product on occasion. Other “business” co-founder.

There are clear Pros and Cons to reporting to a VP of Sales. The Pros are:

  • Usually, a VP of Sales is your best manager. So usually, she can easily also manage Customer Success as well as all her reps.  You have too much to manage as it is.
  • Better alignment with VPS owning an ARR/MRR goal vs. just bookings goal. She’ll be better able to hit your ARR end-of-year goal if she’s also in charge of churn, and all upsell.  It’s always at least a little awkward to ask your VP of Sales to own the year-end ARR number, if she can’t also control churn.  They are Continue reading "Why I Usually (Not Always) Prefer Customer Success to Report to the CEO"

The New and Improved SaaStr Newsletter

We kicked off a SaaStr newsletter about 18 months ago as a simple way to push SaaStr.com posts to folks that wanted posts pushed to them by email.  For a while, we didn’t do too much more with it, but we’ve upgraded the newsletter recently to add more value to folks that already read a lot of SaaStr content: First, we’ve added short, unique pieces of video content from the SaaStr Annual and other SaaStr events.  This week, the team added a great short segment from Josh James, CEO of Domo, on how to align your whole company on sales: Second, as we’re crossing 100,000+ followers on Twitter, we’re adding some content from Twitter because otherwise it’s impossible to keep up: Third, we continue to curate the best of SaaStr and SaaStr-on-Quora and the SaaStr podcast for you, as well as other great posts from the Internet, as well
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Algolia: From Impossible to Inevitable

Before I ever made a single investment, I was 100% heads down running my own SaaS company.  I remember asking Jason Green of Emergence Capital (my 2x investor), back in the day, how pre-IPO Successfactors was doing, where he was also on the board. Successfactors later went on to a very successful IPO and then a huge sale to SAP for $3.4 billion. His answer:  “I’m buying every share I can” I didn’t really get what he meant. Fast forward to today, I haven’t really been investing all that long, but man have I learned a lot.  I’ve raised $90m for two SaaStr Funds, been part of another $195m fundraise, and made about 30 total investments of various sizes.  The first batch is doing pretty well, and now we can go back and see what we’ve learned. One of the first investments I made when I actually figured out my
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Congrats to Point Nine. Pick Them.

Today the 1100th VC fund of 2016-2017 was announced.  It’s hard to keep up with the explosion of new funds.  I’ve even raised a few myself. But there is one I want to rate a 10 on the VC NPS Scale — Would, And Always Do, Recommend to A Friend.  Point Nine Capital has raised €75M for its fourth fund. Despite our headquarters being a dozen time zones away (Berlin vs. SF), I’ve been fortunate enough to be a co-investor with Point Nine on many winners (Algolia, Automile, Front, etc.).  What I’ve learned from that experience is there is no team more founder-dedicated, win-win and positive than Christoph, Pawel and the Point Nine team.  Christoph’s first angel investment was Zendesk.  Overachieving on your first at-bat I suspect was an informing experience about doing things “the right way” that continues to this day. If you are raising in SaaS or marketplaces Continue reading "Congrats to Point Nine. Pick Them."

Four Mistakes Founders Make When Pitching To Investors

Between SaaStr and Acceleprise, I talk to a lot of early stage SaaS founders and notice similar mistakes founders make when pitching to VC’s. Every interaction with an investor matters and can help shape the dynamic of the process. Nail each interaction early in the process and an investor will start to lean in, making them much more likely to find reasons to do the deal instead of finding reasons not to do the deal. Below are four common mistakes I’ve seen:
  1. Lack of transparency and knowledge of key metrics. Some founders aren’t willing to share their metrics up front or even worse, don’t know them off the top of their head in the first meeting. Both are a red flag for me. These are two separate issues, so I’ll address each. I understand wanting to have control over who sees your metrics and when; but if you aren’t willing Continue reading "Four Mistakes Founders Make When Pitching To Investors"