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“Seed is Broken But There is More Seed Funding That Ever”: The Latest Deep Dive with Harry Stebbings and Jason Lemkin

SaaStr

To IPO, companies need to triple their market share in their core market and have a churn rate of less than 3-4% per month. The market is flooded with capital, leading to higher valuations and unrealistic expectations. There is more capital available to startups than ever before. Venture capitalists are investing more money.

CTO Hire 175
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Every Top Founder Ever: “I Should Have Acted on Bad Trends Earlier”

SaaStr

A Burn Rate That is Too High Venture capital is meant for investing, for sure. Almost every founder regrets using capital to keep a high-burn rate engine going that isn’t scaling rapidly. #2. Not Jumping on High Churn Some types of churn certainly can be addressed over time.

Trends 272
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Top SaaStr Content for the Week: Dave Kellogg, PayFit and Insider CEOs, Notion COO, Salesforce CMO and More!

SaaStr

The 10x Rule: What Raising $1 of Venture Capital Really Means. The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long. SMB SaaS has a lot going for it, but one big existential challenge — inherent churn. 7 Secrets to a Successful SMB GTM Strategy with PayFit and Accel.

New CTO 230
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5 Interesting Learnings from Expensify at $140,000,000 in ARR

SaaStr

GRR of 86% and NRR of 119% are very impressive for SMBs … although they only count customers with 5+ seats. Their tiniest customers still have higher churn, as with almost every other SaaS company. A reminder to segment churn, and be careful when looking at public company NRR rates. Expansion so far is limited to U.K,

Scale 282
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5 Interesting Learnings from Squarespace at $700,000,000 in ARR

SaaStr

It’s very helpful to see this called out for SMBs, and is pretty low for a public SaaS company. But perhaps not that uncommon for higher-churn SMB categories. Most higher-churn SaaS companies seem to obscure, or at least, not highlight any NRR below 100%. 70% annual, 30% monthly subscriptions.

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5 Interesting Learnings From Slack. As It Gets Ready to IPO.

SaaStr

Revenue Retention / Net Negative Churn of 143%. All the great SaaS companies IPO’ing now have strong revenue retention, whether SMB or enterprise focused. million funded by Slack and the balance funded by the venture capital funds who partner with Slack Fund.” Even for Slack. Not burning that much cash.

Scale 275
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The Latest in VC Funding + Scaling SaaS: An AMA with SaaStr CEO Jason Lemkin (Pod 581)

SaaStr

I believe you, it’s true, but venture capital is a weird niche thing that… Frankly, venture capital at any stage only wants to invest in folks that are already off to the races. SMBs are doing that every day. No one is canceling ERP, Shopify is growing more slowly, but its churn is not up.

Scale 184