Tom Tunguz

AUGUST 6, 2023

With 15 years’ perspective, I plotted the QQQ (Nasdaq) value against venture Investing activity & venture Exits activity (all log normalized). for QQQ/Investing & 0.93 Then GreenDot’s IPO in Q2 2010 at $1.4b The public markets & private markets are staggeringly correlated at 0.98 for QQQ/Exits.

Venture Capital 202

Venture Capital Acquisition Investment Marketing 202

Clouded Judgement

OCTOBER 20, 2023

For context on a 10Y at 5% - from 2010 to 2020 the 10Y averaged roughly ~2.5%. Said another way, the 10Y today is double what it averaged from 2010 to 2020. This is for information purposes and should not be construed as an investment recommendation. Altimeter is an investment adviser registered with the U.S.

Cloud 161

Cloud Azure AWS Software Review 161

Tom Tunguz

NOVEMBER 19, 2020

If the government lends at a low rate, then the cost of capital is less, so companies should be able to invest more at the same cost, and grow faster. And it would be 4x the size of 2010. More dollars chasing higher growth, higher yield, and riskier investments. Prices are higher, investment rounds larger, exits more valuable.

Venture Capital 353

Venture Capital Government Pricing Investment 353

Clouded Judgement

SEPTEMBER 29, 2023

As a reminder - the average software multiple from 2010-2020 was ~7.8x, and the average 10Y over that same period was ~2.3%. This is for information purposes and should not be construed as an investment recommendation. Altimeter is an investment adviser registered with the U.S. The current median multiple is ~5.7x.

Cloud 183

Cloud Government Banking Software Review 183

Tom Tunguz

APRIL 1, 2019

In the analysis, I created a metric, the return on invested capital (ROIC). In 2010, one venture dollar bought $1.24 If we look at the ROIC across IPOs across the last 12 years or so, we see that same initial dynamic of incredibly efficient companies in the 2010 and 2014 IPO cohorts. of revenue at IPO.

Startup 279

Startup Software Review SaaS Acquisition 279

Tom Tunguz

JANUARY 7, 2020

I wondered if Softbank's changes in investment strategy had much to do with it, but as the chart shows, they were not a meaningful contributor. Their investment is marked in the black line. Since 2010, the number of round by quarter has followed a periodic growth, with consistent seasonality.

Marketing 239

Marketing Finance Investment Trends 239

Clouded Judgement

DECEMBER 22, 2023

The median projected growth rate today is 14% The piece left out of the analysis is interest rates, which are obviously higher today than the period of 2010 to 2020. This is for information purposes and should not be construed as an investment recommendation. Altimeter is an investment adviser registered with the U.S.

Cloud 177

Cloud Subscription Payment Features Metrics 177

Tom Tunguz

MARCH 10, 2019

Angel investing was an important part of the Startupland ecosystem. 2018 observed the fewest number of angel-led financing rounds since before 2010. And the total number of dollars invested by angels halved from a peak of $365M to $177M. It’s massively outstripped any growth in angel investing, growing from about $0.5B

Finance 279

Finance Trends Investment Startup 279

Clouded Judgement

JANUARY 13, 2023

As a reminder - from 2010 - 2020 the average 10Y rate was ~2.3%. That was more broadly a period of ZIRP, and it’s interesting that today the 10Y isn’t hugely different from where it was in the period of 2010 - 2020 Morgan Stanley CIO Survey Everyone is eagerly awaiting 2023 forecasts to be “de-risked.”

Cloud 130

Cloud Forecasting Subscription Payment Features 130

Clouded Judgement

NOVEMBER 3, 2023

This growth adjusted premium also comes at a time when the 10Y is nearly double what it was from 2010 to 2020. This is for information purposes and should not be construed as an investment recommendation. Altimeter is an investment adviser registered with the U.S. So what’s holding up software stocks valuations??

Software Review 161

Software Review Cloud Software Azure 161

Clouded Judgement

OCTOBER 21, 2022

And to get ahead of some questions, the long term average I’m using is from 2010-2020 (so excluding the crazy multiples of Covid). The average 10Y in the period of 2010 - 2020 was ~2.3%. I don’t think it goes back to ZIRP, but I think it looks closer to the average from 2010 - 2020 than what it does today.

Cloud 130

Cloud Software Review Subscription Payment Features 130

Clouded Judgement

JUNE 16, 2023

Said another way, the median NTM revenue multiple is ~23% below it’s historical average, but forward growth expectations are the lowest ever (~40% below historical average), and the 10Y is ~40% higher than it’s historical average (from the period 2010-2020). Median NTM Growth Rate was ~25% Median 10Y was ~2.3%

Cloud 130

Cloud Software Revenue Subscription 130

Tom Tunguz

APRIL 14, 2014

Last week, we proved SaaS startups are raising more than they have in the past and newer SaaS companies seem to be generating more revenue per dollar invested. In combination with the chart above, these data points imply that greater sales investments generate more revenue than in the past. 1998 34 11.

Engineering 100

Engineering Investment Sales SaaS 100

SaaStr

APRIL 1, 2023

Rewind The Clock — How Did We Get Here Most small businesses in pre-2010 didn’t have computers in their store or restaurant. SMBTech Companies Take A Long Time To Build Richards and Luck have been investing for quite some time, and early on, they learned that not everything works right out of the box. Most didn’t even have internet.

Scale 188

Scale SMB Merchant Services Payment Methods 188

Clouded Judgement

FEBRUARY 24, 2023

So today, the median multiple is ~25% lower than where it’s longer term average (pre 2010 we don’t have much data on cloud software multiples as there weren’t many public cloud software companies). It makes sense the median multiple today is lower than the 2010-2020 average given the difference in rates.

Cloud 130

Cloud Subscription Payment Features Revenue 130

SaaStr

AUGUST 9, 2020

And I’m also going to throw in a few small moments from running “SaaStr Inc” now to almost $20m in annual revenue, and investing in a handful of awesome unicorns. A Good Day: Dec 31, 2009; Dec 31, 2010; Dec 31, 2011; Dec 31, 2012. Maybe it will be cathartic for you. It is true. New Years was spent in the office.

Sales Hiring 354

Sales Hiring SaaS Revenue Churn 354

Tom Tunguz

AUGUST 26, 2019

DataDog provides a very popular IT monitoring solution that has grown from its founding in 2010 to a huge business. Here’s why: For every dollar of sales and marketing investment, DataDog generates $1.68 One last chart: revenue dollars at IPO per venture dollar invested. DataDog is no exception.

Metrics 189

Metrics Benchmarks Scale User Experience 189

Tom Tunguz

JUNE 23, 2018

Total dollars invested have fallen by 37%. In 2013, there was one Series A for every five seed investments. Startups can invest in deep technology by building machine learning software that might take a year or two to bring to the market. For now, though, the Series A market is the strongest its been since 2010.

Machine Learning 189

Machine Learning Artificial Intelligence Startup Investment 189

A Smart Bear

JANUARY 4, 2018

Of course a nice chunk is primary capital, i.e. for the company balance sheet, to invest in growth initiatives, security and quality, and advancing our existing strategic priorities through acceleration and de-risking. The majority of the funds pay back our early investors who believed in us enough to trust us with their money.

Engineering 70

Engineering Investment Revenue Technical Review 70

SaaStr

MAY 29, 2019

Ellevest is on a mission to close the gender investing gap by leveraging a robo-advisor designed especially for women. In 2004 he became CEO of MarkLogic where he stayed until 2010. With a staggering amount of likes as a presenter and a stellar sessions average.

Payment Methods 220

Payment Methods Payment Solutions Payment Services Banking 220

SaaStr

SEPTEMBER 12, 2019

I’m talking about product-led growth as an investment strategy, but really my background is 10 years of operating experience in the product-led growth world. Now I’m investing in that. I say investment strategy, but really it’s like how do you build a company that’s focused on product-led growth?

Investment 100

Investment Underperforming Technical Team Sales Hiring Software Review 100

Tom Tunguz

JANUARY 4, 2017

Late stage market dynamics are changing as hedge funds and mutual funds seek other areas to invest. Seed rounds have seen the greatest growth since 2010 from approximately 1000 rounds per year to more than 4000 rounds per year in 2014. Series As and Bs counts grew 40% from their 2010 figures before falling 20% in 2016.

Finance 100

Finance Startup Investment Pricing 100

Intercom, Inc.

DECEMBER 31, 2019

To give some perspective, there were about 300 million smartphones sold in 2010. At a time when SaaS companies represent the vanguard of disruptive innovation, it’s not surprising that an armada of non-software companies are following suit by attempting to replicate the business model in a bid to attract investment. There are about 3.2

Payment Solutions 259

Payment Solutions Payment Methods Software SaaS Payments 259

SaaStr

JUNE 5, 2020

This set of metrics that Salesforce began to standardize enabled other providers of Financial Capital to more quickly analyze new SaaS companies and invest. . 2004-2010 marked the early days of SaaS where the model was still risky, and cloud providers were competing hard with their on-prem predecessors. .

Venture Capital 218

Venture Capital Technical Review SaaS Scale 218

The Angel VC

MAY 17, 2017

In our weekly investment team call earlier this week we decided to pass on two early-stage SaaS startups that were both on track to grow from zero to $100k in MRR in their first 12 months of going live. And chances are that it would have been a good investment. I’ll keep you posted.) What does it mean for SaaS founders?

Business Model 180

Business Model Venture Capital SaaS Underperforming Technical Team 180

Casey Accidental

NOVEMBER 28, 2023

It kept investing in making its overall growth model stronger. Modeling your loops helps you start investing in building out those new growth loops or products well in advance of when you need them to sustain your growth, because of course developing them takes much more time than improving a current loop. Why did they do this?

Payments 63

Payments Scale Payment Methods Underperforming Technical Team 63

Tom Tunguz

FEBRUARY 24, 2016

That figure has grown each year by 80%, and for the investments that closed in early 2016, that figure reached $163k. 2014 and 2015 were two of the largest VC investment years in the last 20. And to put things into context, seed investment has grown 5x since 2010, Series A investment has doubled and Series B+ has tripled.

Benchmarks 100

Benchmarks SaaS Pricing Investment 100

Tom Tunguz

APRIL 3, 2014

To answer that question, I’ve taken the same basket of public SaaS companies and computed a revenue-on-invested-capital (ROIC) across the four 4-year IPO cohorts from 1998-2014. The revenue-on-invested-capital is the revenue at IPO divided by the venture dollars raised pre-IPO, inflation adjusted and measured in 2014 dollars.

Startup 100

Startup Trends Investment Cloud 100

Tom Tunguz

MAY 2, 2017

I plotted the mean round size of Series As from 2010-2016 in the bar chart above. Perhaps venture capitalists aim to invest in 2 companies per year. They seem to vie more stridently to invest in startups in September, and relax most in March. There is no pattern to investment seasonality in the startups.

Startup 100

Startup Pricing Investment Data 100

Buffer Resources

AUGUST 16, 2023

Looking ahead at our future investments When we look ahead to future years, we anticipate that employee expenses will continue to make up the majority of our Operating Costs. We also plan to continue to invest in paid marketing. Our marketing budget has really grown in the last two years, but we are seeing this investment pay off.

Merchant Services 76

Merchant Services Payment Services Payment Features Payments 76

Chart Mogul

DECEMBER 4, 2020

When Stripe was launched in 2010, dealing with payments online wasn’t a straightforward matter. As I outlined in the beginning, handling payments wasn’t easy in 2010, even for developers. Stripe also invests heavily in two areas that are often overlooked by tech companies — its API and documentation.

Payment Methods 105

Payment Methods Payment Services Payments Payment Solutions 105

Tom Tunguz

JANUARY 2, 2016

Which of the 16 major start of categories in information technology will reap disproportionate share of investment dollars in 2016? The chart above contrasts the pace of investment across the two markets by sector measured by % of total dollars invested anually. of the market in 2010 to more than 7.5%

Startup 113

Startup Marketplace as a Service Social Media Advertising 113

The Angel VC

DECEMBER 26, 2010

Continuing my little 2010 portfolio review ( here's part 1 ), the next stop after San Francisco ( Zendesk ), Vancouver ( Clio ) and Berlin ( Momox ) is Edinburgh, home of FreeAgent Central. myGengo is a pretty recent investment of mine which I've done about half a year ago together with Dave McClure and other angel investors.

Marketplace as a Service 115

Marketplace as a Service Software Review Innovation Investment 115

Intercom, Inc.

JUNE 16, 2020

But first, let’s take a look at how loyalty emerged as a priority, and why leading businesses are investing in customers, not stakeholders or employees, to drive up revenue. In 2010, leading management thinker Roger Martin declared we’re entering the age of “customer capitalism.” The era of customer capitalism.

Scale 237

Scale Social Media Customer Support Scaling 237

The Angel VC

JANUARY 4, 2011

Here's the third part of my 2010 portfolio review. I invested in the company together with Team Europe Ventures early last year. 2010 saw the company dramatically expand its product offering to become a complete accounting solution for SMBs in Poland and grow the team from just five people at the beginning of the year to 14 today.

Payment Solutions 104

Payment Solutions Payments Payment Features Software Review 104

Tom Tunguz

APRIL 25, 2016

The number of Series A, B, C, and D investments in software companies stabilized at roughly 170 per quarter from mid-2013 through mid-2015, before falling 17% in Q4 2015 to a two year low. But early 2016 pace still exceeds the best quarters of 2010-2012. In dollar terms, Q1 notched the greatest amount invested yet.

Marketing 100

Marketing SaaS Investment Startup 100

The Angel VC

DECEMBER 25, 2010

As 2010 is drawing to a close I’d like to take a moment to give you a quick update on my angel investment activities and more importantly, thank the incredibly talented and hard-working people who have made it such an amazing year. Some highlights: Zendesk has had a phenomenal year.

Cloud 106

Cloud Investment B2B Subscription 106