What are some strategies to justify to a potential acquirer a higher valuation for my company?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




The easiest “strategies” to get a higher price in an acquisition — which admittedly are very hard to deploy quickly:
  • Raise a venture round at a high price. This is controversial “advice” because it can backfire on you. But the reality is, many M&A prices are driven by a multiple of the last venture round — at least in deals where the acquirer really wants to get it done. Yammer famously had to be at $1.2b — because the last round was at $0.6m. My first start-up sold for exactly 5x the total all-in valuation of the first and only round. Corp dev departments know this, and so they get the company ready to “pay up” at least 2x-3x the last round price to get a deal done. But if the deal isn’t hot, this can backfire. It can turn off an acquirer if the valuation in Continue reading "What are some strategies to justify to a potential acquirer a higher valuation for my company?"

What are the qualities of a good co-founder?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




My list:
  • Same values and commitment as you. No matter how smart you both are, you also have to share the same values and commitment. Are you both 100% all-in? Are you both willing to go 18–24 months before initial product market fit? Are you both willing to do what it takes to win? Are there ego issues around titles? Is one of you willing to go fulll-time, but the other isn’t yet? If you aren’t aligned here, it won’t work out.
  • At least one key skill the other doesn’t have. Someone has to sell. Someone has to be the #1 engineer. Someone has to be the face of the company. Someone has to raise the money. Some overlap here, even a lot is OK. That worked fine for Google. But one of you has to lead on Customers/Sales/Marketing and the other likely on Product/Engineering for it really to work. Continue reading "What are the qualities of a good co-founder?"

Why has Microsoft Teams overtaken Slack with 13 million daily users?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




It’s an impressive statistic. But … it is difficult to know how seriously to take this without knowing true engagement, because Microsoft Teams is packed into so many editions of Office, etc. Just like Yammer was (and still is): Perhaps that means Teams will kill Slack. But perhaps it also means that the $600m+ ARR worth of folks are paying for Slack instead of something that comes essentially for free with Office. We’ll see. There is a long history of apps packed in with other critical services that just don’t have the same level of long-term engagement as the core apps. Suites are super convenient. But users and customers still seem to have a habit of seeking out best-of-breed apps instead, more often than not. A bit more here: 5 Interesting Learnings From Slack. As It IPOs (er, Direct Lists). | SaaStr Also, importantly, Slack for now clearly remains the
Continue reading "Why has Microsoft Teams overtaken Slack with 13 million daily users?"

What skills do you look for in an entry level sales person?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




If you are a founder hiring salespeople to manage yourself (i.e., you don’t have a VP of Sales or other sales leader yet) … your #1 criteria should be trust. Specifically, does your gut and time with him/her say you can trust her with a lead. Leads and potential customers are so precious in the early days. Can you trust this rep with a lead? At least, with a part of the sales process? If you aren’t close to 100% sure you can trust them with a lead, find another candidate. Even if the resume / LinkedIn seems perfect. Even if all the other intangibles check out. View original question on quora The post What skills do you look for in an entry level sales person? appeared first on SaaStr.

We lost an enormous RFP because we are too small of a company. They said our revenues are too small to put thousands of seats on. How can we keep the relationship alive and get a second chance later?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




This is a big bummer. Three things though:

How do you still get the sale when they ask for mission critical features you don’t have yet?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




This is indeed the art of enterprise sales. 🙂 Marc Benioff and his team were legendary at this. Many seasoned enterprise sales execs are good at it, too. The key is simply to acknowledge the gap — and commit to building what the customer needs within X months. Enterprise customers are used to this. Sometimes, they will bite and agree. Other times, they’ll need more proof. But it’s worth a shot if (x) you fill 90%+ of their need as is and (y) they believe you to be the overall vendor of choice. View original question on quora The post How do you still get the sale when they ask for mission critical features you don’t have yet? appeared first on SaaStr.

How can I get a large enterprise customer to commit to paying for more seats off the bat? We are self funded and the cash up front helps but they asked for a phased rollout.


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




There’s no question that getting a full year or two of cash up-front can be magical to cash flow in SaaS. Back in the day, we set a goal of collecting at least 110% of our MRR in cash each month. They key was as many annual pre-paid deals as possible. But … customers in SaaS know what they want, and how they want to pay.
  • Some customers will take a discount to pre-pay annually. Others won’t.
  • Some will want to start with a small pilot or a phased roll-out. Others don’t.
You can ask for pre-paid annual, and provide a nominal discount for it. Many customers will say yes, the bigger and more enterprise ones. Especially if they have already budgeted that full amount for the entire year. But if they don’t bite, don’t add friction to the deal. Give them the term they want, and move on. A Continue reading "How can I get a large enterprise customer to commit to paying for more seats off the bat? We are self funded and the cash up front helps but they asked for a phased rollout."

Why do venture capitalists almost always receive preferred company stock?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




This has evolved over time. In the Old Days, preferred stock had two key advantages:
  • They had some downside protection, in that they’d be paid first in the case of a small exit; and
  • They had upside “protection”, in that participating preferred increased the return of preferred over common, often until a significant cap (say a 500% return).
But times have changed. First, almost all acquirers in smaller deals rewrite the acquisition terms in some fashion that incent (and thus favor) common stockholders. This doesn’t completely eliminate the benefit of preferred here, but in practice, it substantially reduces the modest downside protection. Second, VCs are more focused on bigger and bigger outcomes, so downside protection is less interesting that before. Many VCs will “give” on this to get into a good deal. Third, the participating part of preferred has morphed into other vehicles / clauses more focused on pricing protection. Continue reading "Why do venture capitalists almost always receive preferred company stock?"

Is Salesforce meant for startups or larger companies?


This post is by Jason Lemkin from SaaStr


Click here to view on the original site: Original Post




Salesforce is meant for, and to benefit, managers. It:
  • Forces and automates workers to input all key customer data.
  • Provides management dashboard-level insights into their pipeline and business.
  • Enables forecasting.
Little of this helps reps themselves, and thus little of it really helps tiny start-ups which often have no real management. Not really. But … As soon as you have management, you’ll likely want to move to Salesforce. That means as soon as you have a VP of Sales that has used Salesforce before. That could be as early as employee #10-#20. So plan on it. View original question on quora The post Is Salesforce meant for startups or larger companies? appeared first on SaaStr.