I would have the board approve CEO salary, all material expenses (>$5k-$10k), and an overall CEO expense policy. In a startup, the reality is a CEO can probably do almost anything she wants. It’s hard for the investors to really police most activity or even be aware of a lot of it. But transparency builds trust. Get everything approved by the Board. View original question on quora The post Who should approve startup CEO expenses? appeared first on SaaStr.
You move her/him into an individual contributor role. Or just move her/him out. This is one of the most frustrating outcomes, when a very talented co-founder becomes “unrealiable”. What that really usually means is they just aren’t as committed as you are. And oftentimes, that’s completely logical. Startups are so hard, and it’s so hard to see success in the early days. It’s logical one co-founder may be less committed, and become “unreliable”. Especially if you are working for $0 or a very low salary. It’s almost un-fixable, however. You can try to transition them out. Or you should at least not have them manage anything. That lack of reliability will translate into a toxic culture of folks who are less than 100% committed. View original question on quora The post How would you deal with an unreliable co-founder? appeared first on SaaStr.
It’s getting more and more common these days and it’s not that complicated. The real question is where do you get the money to buy them out. With more and more money into venture, and more and more rounds being oversubscribed, it’s more and more common for there to be options even relatively early (Series A round) to buy out early noteholders and equityholders. I’ve done this myself (buy out earlier shareholders) at the Seed, A and B stages 4 times in the past 12 months. View original question on quora The post Can a company buy back an investor note if the investor wants out of the investment? appeared first on SaaStr.
Let me make a suggestion: Get great at an email elevator pitch. Many biases and prejudices seep into in-person VC pitches. If you don’t fit the mold, your odds go down. That’s not fair, or cool, or right. But it’s a fact. At least today. But a great email elevator pitch can at least increase the odds. What do I mean? Write an email that is amazing in describing the opportunity. Not crazy long. And not a teaser. What I mean is a 25–30 line, well organized email — with bullet points, metrics, etc. — that would make anyone want to invest. Perhaps even including links to back-up information and data if the VC wants in. Customer logos, burn rate, NPS, growth, market differentiation, strengths and weaknesses. Then run it by everyone you know. Get feedback. Iterate. And send the very best email you possibly can. With the very best Continue reading "When will VCs start to evaluate people on internals rather than on pitches?"
Budget — somehow, some way — 24 months just to get to initial traction. 6 months is not enough. You can’t budget 12 months and then “move on” if it doesn’t work out by then. It almost never “works out” after just 12 months. I know you have no savings, your co-founder has a mortgage, this, that, and the other thing. But you have to find a way to go all-in for 24 months to really know if it’s going to work. View original question on quora The post What advice would you give to a starting entrepreneur if you could use just one sentence? appeared first on SaaStr.
First — you don’t want a true net discount at all. What I mean what you want is a pricing structure that anticipates discounts so the net effect is revenue positive. Later, when you implement a CPQ and other more sophisticated systems to manage pricing for a large sales team, these processes and systems will be designed to help you do just that, at least in part. Before then, think instead about marking up the prices of non-annual contracts to account for churn. You’ll likely want non-annual contracts to be priced 20%-30% higher to account for the effect of churn, but the exact % can vary. So raise prices ~25% on non-annual contracts so you can price in a 20% “discount” for annual contracts and not have a true discount to targeted pricing at all. Second — note your views on this will change based on how much you value Continue reading "What is a reasonable discount for upfront yearly payments for Enterprise SaaS? What about for signing a 3-year contract?"
It makes sense when it’s true. Otherwise, it’s a terrible idea. Co-CEOs are very confusing:
- Investors and media will be very confused. VCs get a bit spooked by co-CEOs. Who am I betting on?
- Employees will be confused. Who’s the boss? Both of them? What does that mean? What if they say different things? What if they fight? What if I see them yelling at each other?
- Your VPs may be confused. This has some positives, but a lot of negatives. VPs really need just one boss, or it’s really hard on them to figure out the true priorities. VPs always worry a lot about making their CEO happy. Worrying twice can be debilitating.
- The co-CEOs may themselves be confused. This is the real, biggest issue. Is this an ego thing? Are the two of you thoughtful enough to truly divide up the universe in a thoughtful, efficient way?
Continue reading "When, if ever, does it make sense for a company to have co-CEOs?"