Over 160 Venture Capitalists already purchased their Unicorn Hunting Licenses for 2018…

Year after year, VCs show up to SaaStr Annual locked and loaded, term sheets in hands, on the hunt for soon-to-be Unicorns to add to their portfolios. From the Founding Partners, Managing Directors and big name SaaS VCs who grace the stage — like 10X unicorn investor Jason Green of EmCap or SaaS legend Tomasz Tunguz, to the firms that send over a dozen of their Partners and Associates — everyone who invests in SaaS has a presence at SaaStr Annual. We also see some private equity firms registering early, and the list of publicly traded companies sending Corporate Development teams is at least 2Xing year over year. Whether you’re in it for the long haul and need cash to scale, or you’re looking for a speedy exit — or even if your dream is to become part of something bigger, where you can watch your product live
SaaStr Annual Silicon Valley VC Term Sheets - fundraising deals get done at SaaStr. Matt Garratt, VP, Salesforce Ventures
Mamoon Hamid, Managing Director, SaaStr Annual Strategy Stage
Tomasz Tunguz, Redpoint Ventures, at SaaStr Annual
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$3 Billion Is the New $1 Billion in SaaS

A funny thing happened as part of the overall bull run the last 2 years: $3 Billion became the New $1 Billion In SaaS.  So maybe it’s time to change the definition of a SaaS Unicorn. Let’s look at Bessemer’s Cloud Index at the last batch of SaaS and SaaS-ish companies to IPO:  Box, Hubspot, Mulesoft, RingCentral, Xero, Zendesk, etc: They are all now $3 Billion+ companies, or close to it. A lot has changed.  I remember in the Series Seed fundraising deck for EchoSign in 2005 (I know, a long time ago), I put on Slide 0 (the cover slide): “Positioned between eFax ($800m) and Salesforce ($2.6b)” to give investors context. Back then, even Salesforce wasn’t at $3b at yet.  Today, the three poster childen for “on prem to SaaS” (Salesforce, Workday, ServiceNow) are worth $130b+ collectively, and Salesforce has grown 40x in value since
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Building a Series A SaaS valuation estimator (2017 edition)

 I have financed nearly 50 early-stage companies and the question of proper valuation comes up in every financing. There is the obvious tension: Generally speaking, the existing shareholders would like the highest valuation possible, while the new investors would prefer the lowest. For founders, understanding how VCs look at valuation is critical for a successful fundraising process. Read More

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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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"

John Somojai (Salesforce), Mark Suster (Upfront Ventures): Top Lessons Learned after 200+ SaaS Investments (Video + Transcript)

Mark Suster, Partner at Upfront Ventures, chats with John Somorjai, EVP Corporate Development at Salesforce, about the dos and don’ts of M&As. After 20 years in the business and more than 200 investments in SaaS companies, John can certainly teach us a thing or two. Furthermore, these two gentlemen have worked together in the past, which allows them to provide some unique insights into how the M&A between their companies worked out. One of the first things to keep in mind when you get into an M&A partnership with someone is that you shouldn’t make it all about money. That will cause a slew of problems in the long run and you’re only going to hurt yourself in the end. Focus on finding the right partner that will have the company’s best interest in mind. When you’re looking to get acquired, you’re like going to be talking to multiple buyers
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