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Why IPOs, Direct Listings, and SPACs Will Flourish in Startupland

Tom Tunguz

But investors in private companies use a different metric, enterprise value to forward annual recurring revenue (ARR).The In 2017 and 2018, the median high-growth private company raised at a higher forward ARR multiple than in the public markets. The private markets project the ARR a year from now.

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A Look Back: “SaaS Metrics Masterclass: Key Business Metrics, Pricing Strategies and Billing Models with Stripe’s Head of France and Southern Europe, Guillaume Princen” (Video + Transcript)

SaaStr

Check out this 2018 Europa session with Guillaume Princen, Head of France and Southern Europe @ Stripe, where he talks about the metrics you need to be focused on in your startup. If you don’t have the time to watch the whole session, here are the main metrics you should be mindful of. MRR, obviously. We talked about churn.

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Benchmarking DataDog's S-1: How 7 Key Metrics Stack up

Tom Tunguz

To put the company’s stellar trajectory in context, I’ve plotted its metrics relative to two other incredible monitoring companies: NewRelic (NEWR) and AppDynamics (APPD). in 2017, the day before their IPO. This is a measure of turning investment dollars into revenue, a sort of return on equity metric.

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A Funny Thing Happened on the Way to Sand Hill Road

Tom Tunguz

That’s a lot of buffer to achieve Series B metrics [1]. Today, the public markets value companies like it’s 2017. 2] Tangentially, this is why the burn multiple (total burned / total ARR) has become an important investor metric. In 2021, employment costs per capital increased to roughly $200k.

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5 Interesting Learnings from Vimeo at $330,000,000 in ARR

SaaStr

But over time, it’s added a large enterprise and B2B component for marketers and others to track, manage and market videos that we’ll spend a bunch of time digging in on, as it’s the fastest-growing segment, growing from little-to-none in 2017 to 25% of revenue today. 5 Interesting Learnings: #1.

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Pitchbook & IVP: Top Tier SaaS Companies Usually Raise at 15x ARR. It Was 114x in 2021.

SaaStr

So there are a lot of rough and arm chair metrics for fundraising in SaaS in terms of valuations. So the minor point is maybe we’re just back to 2016-2017 in SaaS venture capital for Series A and later rounds. For the best ones. But the bigger point is especially for new founders and execs to just look at the chart above.

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5 Interesting Learnings from GitLab at $250,000,000 in ARR

SaaStr

First $100k customer in 2017. This is an interesting segmentation of core metrics. While GitLab has 15,356 customers as of July 2021, it focuses its metrics on its 3,600+ ones with an ACV of $5k or more. While this makes sense as their core persona and area of growth, it also flatters a lot of the metrics like NRR, etc.