Tom Tunguz

MAY 18, 2014

Investment in later stage comprised 47% of all dollars invested in Q1, while Series A investment fell to a five quarter low at 15%. First, the median investment sizes by round are relatively constant for the earlier rounds (angel, series-a, series-b). But Series C+ have seen a steady growth over the past 8 years.

Marketing 100

Marketing Investment Trends Enterprise 100

Tom Tunguz

JUNE 5, 2021

Let’s examine the relationship between total venture capital investment and the 10 year Treasury in some detail. The y-axis tracks enture capital investment by year and the year of the data point resides in the reddish circle. In short, we should expect some cooling. Do you remember this shape from high school math?

Venture Capital 355

Venture Capital Marketing Government Investment 355

SaaStr

AUGUST 27, 2021

The above example is of my third venture investment, Talkdesk. In 2014, it had 6 employees. Folks want to start startups because they have a chance to look like this: The true definition of a tech startup is probably one that if it truly achieves product-market fit, can scale almost infinitely.

Startup 275

Startup Scaling Investment Product Marketing 275

Tom Tunguz

MAY 23, 2021

2014: Alibaba. Investment processes last a few days. Pricing rounds on multiples like public market investing. Index investing and the entrance of hedge funds. Perhaps these prices are tied to blockbuster IPO markets. 2012: Facebook. 2021: Snowflake (late 2020), UIPath, Airbnb, Doordash, Coinbase.

Software Review 363

Software Review Venture Capital Cloud Pricing 363

SaaStr

OCTOBER 22, 2022

Most VC partners don’t return 1x in cash what they invest. Managing existing investments usually takes more time than meeting new prospects. One slot of 30 or so investments per fund. Seed in 2014, and then proud to double down: Super pro rata in Series A Invested big in Series B First check into Series C.

Compensation 219

Compensation Investment Management Sales 219

SaaStr

MARCH 30, 2023

Having backed more than 115 companies and facilitated over 420 add-on acquisitions, we bring extensive investment experience, deep expertise in software and technology, and a firm commitment to collaborating with management teams.

Outsourced Development 206

Outsourced Development Acquisition Pricing B2B 206

Tom Tunguz

MARCH 1, 2015

The seed stage investment market feels like it’s changing quickly. These firms raised between $5 and $75M to invest in seed stage companies. In addition, VCs have been participating in the seed stage market as well, making 2013 a banner year for seed investment. But what of 2014? 2014 1265 1272 1006.

Investment 100

Investment Marketing Finance Acquisition 100

SaaStr

APRIL 2, 2023

And if you didn’t invest proactively in systems like CPQ early, you create a byzantine mess that’s impossible to scale. Invest in back-office systems early. Mistake: Not investing in Digital Customer Success early The cobbler’s kids often have no shoes. So at Pulse 2014, I became a “grown-up CEO.” I wore a boring suit.

Sales Hiring 261

Sales Hiring Scale Scaling Customer Success 261

Tom Tunguz

JULY 28, 2015

In response last week’s post on The Fastest Growing Areas of Startup Investment in 2015 , in which Bitcoin topped the list, I received many questions about the underlying dynamics of this startup segment. Using Crunchbase data, I analyzed BTC investment patterns over the past 4 years. Which regions? Which stages?

Investment 100

Investment Blockchain Innovation Startup 100

Andreessen Horowitz

SEPTEMBER 19, 2023

Investing in Instacart was perhaps the hardest decision I had to make as a venture capitalist. It was April 2014, and the company was raising its Series B. and in 2014, it had the lowest digital penetration of any category. Focusing on the former was key to our investment decision. Instacart is a case study of this.

Marketplace as a Service 137

Marketplace as a Service Scale Underperforming Technical Team Construction 137

Tom Tunguz

MARCH 31, 2016

Q1 venture capital investment remains steady relative to Q4 2015 at about $15 billion, but down from the near records attained in 2015. So, on a historical basis, venture capitalists are still investing at rates substantially above average. In Q1 2015, venture capitalists invested $17.5 2016 is off to a slower start than 2015.

Trends 100

Trends Investment Startup Venture Capital 100

SaaStr

MAY 16, 2020

When I invested in Talkdesk in 2014, Five9 had a $150m market cap. That’s accelerated more Cloud leaders than it has harmed. It’s not just Zoom and Slack. Many other functions have quickly moved to the Cloud, e.g. call center like RingCentral and Five9. Today, six years later, it is $7 billion. Let that sink in a bit ??.

SaaS 363

SaaS Cloud Investment Marketing 363

Tom Tunguz

APRIL 1, 2019

In 2014, I published a post called Do Startup Require Less Capital to Succeed than 10 Years Ago ? In the analysis, I created a metric, the return on invested capital (ROIC). In 2014 we saw increasing efficiencies over time, which was very exciting because it reaffirmed the efficiency of SaaS go-to-market. of revenue at IPO.

Startup 267

Startup Software Review SaaS Acquisition 267

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 fact, the 2014 cohort of public SaaS companies spend more on sales & marketing and engineering than previous IPO cohorts. 1998 34 11.

Engineering 100

Engineering Investment Sales SaaS 100

SaaStr

APRIL 18, 2021

2014 $4.1B. Now is the time to invest, in team and product at least. Salesforce Growth: 2021 $20.8B Guidance 2020 $17.1B Thank you Ohana! — Marc Benioff (@Benioff) August 25, 2020. If you haven’t done a SaaS start-up before, it’s different.

SaaS 312

SaaS Travel Churn Revenue 312

SaaStr

SEPTEMBER 12, 2021

A small part of SaaStr has been learnings from and tracking some of my investments. The first 3 have been case studies on SaaStr (Pipedrive, Algolia, and Talkdesk were VC investments #1, #2 and #3), so we can learn from them together. Net net, VCs talk about the best investments often being the ones the partners were most divided on.

Scale 212

Scale Sales Hiring Investment Mobile 212

SaaStr

MARCH 11, 2022

Put differently, if you look at multiples of revenue for top SaaS and Cloud companies above from 2014-2022, you could come to one of (at least) two conclusions today: Conclusion #1: Q2’20-Q4’22 Cloud Revenue Multiples Were a Covid Anomaly. This version of the BVP Nasdaq Index illustrates the question.

Scale 263

Scale SaaS Cloud Pricing 263

SaaStr

DECEMBER 8, 2020

2013: first investment. IPO in 2014 at $1B. Unable to raise any money. Solo founder. First product doesn’t work, no revenue for 3 years. 200m from Silver Lake. 2016: IPO at $1.15B market cap. 2020: Worth $7B today. Zendesk : Founded 2006. Raised $500,000 (!) in first angel round in 2007. Worth $2B by 2017. Today worth $16B.

SaaS 200

SaaS SMB Cloud Revenue 200

Tom Tunguz

MARCH 1, 2020

It includes a basket of all the next-generation software companies since 2014.* Notice: I hold Zoom and Microsoft stock and others as investments in index funds. Let’s double-click on the impact of last week on the valuation environment. This is our familiar forward multiples chart.

Software 262

Software Travel Startup Technology 262

SaaStr

JUNE 30, 2023

Braze didn’t find a true product-market fit until around 2014-2015. How To Figure Out What Changes Will Endure Let’s look at how Braze approached this idea of figuring out which changes they thought would endure. It took three or four years of quiet building and a strong conviction to see success.

Scale 200

Scale Mobile Venture Capital Scaling 200

SaaStr

DECEMBER 9, 2020

So my first batch of venture investments hit 20x this week. The #1 investment is 55% of the returns. Reasons not to invest in Zoom: – Solo founder – us TLD – Crowded space – Low ARPU – Entering bottom market – Isn't it a commodity? But they aren't. Learnings: 1. So Top 3 = 79%.

Sales Hiring 268

Sales Hiring Scale Startup Investment 268

Buffer Resources

AUGUST 16, 2023

We shared a post about where your money went when buying a $10 Buffer plan back in 2014 — but it was well time for an update. Since 2014 our team has grown from 34 to 78 team members. Our Average Sale Price (ASP) in 2014 was $13, while our total Operating Costs were $3,575,897. a business presence in a particular state).

Merchant Services 75

Merchant Services Payment Services Payment Features Payments 75

Tom Tunguz

JUNE 11, 2017

A year later, those trends have continued to converge, and SaaS valuations have resurged, reaching their highs of the 2014-2015 boom. Assuming investors purchase the same ownership stake for their investments in each of these rounds, this data implies the market is paying premium valuations again for SaaS companies. billion from $4.2

Venture Capital 176

Venture Capital SaaS Trends Startup 176

Sales Enablement, SaaS and Growth

JUNE 5, 2017

A strong brand grows your moat Companies invest in building their brand as it creates familiarity, credibility, and trust, which further down the line leads to increased brand recognition, so people are more likely to buy a product or service. A strong brand doesn’t just help you win, it protects you too.

Branding 112

Branding Outsourcing Services Investment SaaS 112

Tom Tunguz

AUGUST 26, 2019

This has more to do with the trend that current IPOs tend to be around $200M and New Relic went public in 2014, when the median revenue at IPO was closer to $100M. 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.

Metrics 189

Metrics Benchmarks Scale User Experience 189

SaaStr

FEBRUARY 10, 2021

That advantage can literally last decades if you keep investing in it. Hubspot IPO'd in 2014, at an $880m valuation. But as soon as you have 100, maybe 500 happy customers … you have the beginning of a true brand. Even at $10m ARR, you may have a top emerging brand in your category. But Your Mini-Brand Will Come to Your Rescue.

Business 167

Business Branding Education Churn 167

Tom Tunguz

JUNE 23, 2018

Total dollars invested have fallen by 37%. In the meantime, the number of series As has only declined 20% from its high, remaining relatively stable from 2014 through 2018. In 2013, there was one Series A for every five seed investments. The seed market is in the midst of some secular changes.

Machine Learning 175

Machine Learning Artificial Intelligence Startup Investment 175

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

Tom Tunguz

JANUARY 4, 2017

The data indicates that it is certainly reverting to the mean after two record years in 2014 and 2015. Late stage market dynamics are changing as hedge funds and mutual funds seek other areas to invest. Median round sizes across the three different investment rounds all exhibit signs of inflation.

Finance 100

Finance Startup Investment Pricing 100

Tom Tunguz

OCTOBER 12, 2015

The number of megarounds, investments of greater than $40M in US companies, continues to surpass last year’s figures. In fact, there was only one month in 2015 that saw fewer megarounds than 2014 - the month of April. In terms of aggregate dollars invested, 2015 is on pace to be another record-setting year. in July 2014.

Technical Review 100

Technical Review Finance Investment Startup 100

SaaStr

MAY 29, 2019

Ellevest is on a mission to close the gender investing gap by leveraging a robo-advisor designed especially for women. With a staggering amount of likes as a presenter and a stellar sessions average. It was no easy feat as her session had the most voters participating yet still maintained its five-star average.

Payment Methods 224

Payment Methods Payment Solutions Payment Services Banking 224

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. . Digital Ocean took $40m in debt from Fortress in 2014 after doing a Series A with Andreesen Horowitz. As SaaS Metrics Become Standardized, Banks Want In On The Action.

Venture Capital 216

Venture Capital Technical Review SaaS Banking 216

Tom Tunguz

DECEMBER 26, 2018

In February 2014, forward multiples touched 7.7x. With approximately $100B raised in the last 12 months by venture and growth funds, all with an approximately 3 year investment period, the supply of venture dollars should still be strong. Then prices began a long descent into the February nadir at 3.3x

Pricing 156

Pricing SaaS Startup Investment 156

SaaStr

JUNE 5, 2021

Then we did a second meet-up in 2014 with a little content, and it went well. But all this was an accident, and personally, back in 2013 and 2014, and even 2015, I knew nothing about events, other than as an attendee. And boy we’ve learned a lot over the years. And almost 400 folks came! — and what I didn’t.

Interviewing 183

Interviewing Scaling B2B Investment 183

Tom Tunguz

MARCH 31, 2015

In 2014, there were 251 working days and 211 $40M+ growth rounds - just about one per day. In contrast to the frenetic private market, there were 15 US IT venture-backed IPOs with offerings greater than $40M last year, slightly more one IPO per month in 2014. 231 companies raised $40M+ growth rounds in 2014.

Finance 100

Finance Startup Pricing Acquisition 100

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. This may be a breakout category in 2016 for Series A investments.

Startup 108

Startup Marketplace as a Service Social Media Advertising 108

Tom Tunguz

MARCH 12, 2015

But I was curious about how widespread aggressive investments are in software companies. But in 2014, that figure fell by 25% to 653. But in 2014, that figure fell by 25% to 653. Meanwhile, Series As remained roughly constant from 2013 to 2014, and Series Bs rose by about 17%. The Series B market exploded to $6.5B

Marketing 100

Marketing SaaS Investment Startup 100