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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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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10 Tips To Avoid SaaS Burnout

Burnout is a real risk in SaaS.

Not usually in the early days.  But as time marches on — It’s a huge risk.  

One piece of “evidence” — a lot of fairly successful SaaS startups all sell at about the same point in time … about 5 years in. Because the founders get just too burnt out around Year 4 … and as Year 5 rolls in, they’re running a bit on fumes, and … they sell.  Or take a bad venture deal.  Or just plain start to give up a little.  Often, as it’s just finally getting good.

My Top 10 suggestions to avoid long-term burn-out:

  • Hire than Extra VP — a True Owner. Don’t try to save a few nickels here. You’re responsible for everything as it is. But you have to own less as you scale. Find 1 or 2 or 3 truly great VPs that Continue reading "10 Tips To Avoid SaaS Burnout"

Josh James, Domo/Omniture: DoubleUnicorns – How Things Are Different Now And Things That Never Change (Video + Transcript)

For many CEOs and founders, taking their company to unicorn status might seem like a pipe dream. Now try to imagine having two unicorn SaaS companies under your belt. As someone who has achieved just that, Josh James, CEO and Founder of Domo, can teach us some of the things he learned the second time around. One thing’s for sure, there’s a lot more pressure to be successful. He has a unique and quirky approach to many things. When recruiting, he likes to make potential hires really uncomfortable as a way to test them. The way he goes about building comp plans and incentives will make salespeople drool as well. He even talks about some fun ways, though they may only be short term solutions, to get focused on closing a lead or retaining a customer. Josh is in a unique position to shed some light on the mistakes and
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5 Advantages To Working With a New VC

We’re all attracted to brands.  We want Google and Salesforce and Amazon as our customers.  We want to be in the Cloud 100 and on TechCrunch every week.  We want to be on stage at the SaaStr Annual ? Brands do matter.  They are a proxy, albeit an imperfect one, for quality.  They at least help guide us on what vendors and products to pick, especially if we don’t have time to do the diligence ourselves. The same is true in venture capital, when you go to raise money.  There are good reasons to take money from the Top Brands in VC.  Their brand will accrete to your brand.  They likely have better networks.  And maybe even most importantly, later stage VCs all want to write bigger checks into startups funded by the VCs with the best brand at each preceding stage (pre-seed, seed, A, B, C, etc.).   Look Continue reading "5 Advantages To Working With a New VC"

Your #1 Management Hack: Weekly 1-on-1s

When I catch up with founders on the march from $1m to $10m in ARR, the number one topic is always recruiting.  Where do i find a great VP of Sales, Marketing, Engineering, Product, Customer Success, etc. Sometimes, it seems like simply building a management team is all you have time for.  But it’s not.  It can’t be.  It has to just be the start of a journey together. Once you finally build out your first management team, the last thing you want to do is lose it.  Or more subtly, for your team not to perform as well as they could. The question I always ask founders here is:  Do you do 1-on-1s with your VPs and direct reports?  I’d guess 90% do not.   Most of us end up with once a week staff meetings.  That’s OK.  But it’s not a substitute for a 1-on-1 with your VPs.
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What You Want to Hit: 50+20 at 10 (million in ARR)

The first SaaStr post that got widespread distribution was this one — “Want to Understand SaaS?  If Nothing Else — Understand That It Compounds.” The excerpt here: “What does this mean, that SaaS compounds?
  • It means it’s really, really hard to get revenues going.  You close a customer for $120 in annualized revenue, you only get to recognize $10 of that a month.  A lot of work for ten bucks.  Think of trying to get a train out of a station with a very small engine.  Tons of work, tiny revenues to start.
  • It means you’ll really have to struggle to get to cash flow positive.  Unless you get a lot of annual prepayments, cash will lag.  This will be painful.

How to Build a Sales Team 1-100 (Video + Transcript)

Going from a one man or one woman band to a full-fledged sales team is no walk in the park. As David Baga, Chief Business Officer at Lyft, tells moderator Will Kohler of Lightspeed Ventures, even after doing it a few times, it’s still extremely difficult. But that’s the beauty of it, that it’s challenging but rewarding when you hit the mark. David shares his experience in building sales teams in small startups to huge, established companies like Oracle. He’s learned that moving onto the next stage of growth isn’t like playing at different levels of the same sport–it’s like playing a different sport altogether. That’s one of the reasons why you have to be extremely adaptable when growing a one-person team to a 100-person team. And you certainly can’t make the same mistake he did by trying to implement one company’s sales playbook into another. And if you haven’t
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SaaStr Podcast #133: Ashu Garg, General Partner @ Foundation Capital Shares 3 Fundamentals SaaS Founders Have To Nail To Get To $30m+ ARR

Welcome to Episode 133! Ashu Garg is a General Partner at Foundation Capital whose portfolio includes the likes of Uber, Lending Club, Adroll and Netflix, just to name a few. As for Ashu, at Foundation he has led investments and naming just a few of them here, in the likes of Conviva, Localytics and TubeMogul, later going public in 2014. Prior to Foundation, Ashu was the General Manager for Microsoft’s online advertising business. In Today’s Episode You Will Learn:

SaaStr Podcast #131: Jens Nylander, Founder and CEO @ Automile Shares The Secret To Selling To SMBs

Welcome to Episode 131! Jens Nylander is the Founder and CEO of Automile, the startup that makes fleet and asset management much much easier. They have backing from some of the best in the business, including the Godfather of SaaS himself, Jason Lemkin, the wonderful team at Point Nine, Justin Kan and Dawn Capital in London. As for Jens, he really is a serial entrepreneur with past endeavors including creating Sweden’s largest music player and founding Jays, the manufacturer and developer of innovative headphones that went public and is listed on the NASDAQ.

In Today’s Episode You Will Learn:

* How did Jens make his way into the world of SaaS and come to found Automile?

* How does Jens look to build a repeatable scalable sales process with Automile? What are the core infrastructure requirements needed to make the process as automated as possible?

* How does Jens evaluate selling Continue reading "SaaStr Podcast #131: Jens Nylander, Founder and CEO @ Automile Shares The Secret To Selling To SMBs"