Tom Tunguz

MAY 1, 2014

Earlier this week, I wrote about the increase in cash compensation and decline in equity grants to VPs of Engineering and Product in startups. I received a lot of comments about the analysis, and in particular hypotheses to explain the data. I dug a bit deeper into the data set to find an explanation. Founding employees keep more equity today than ever through the Series A and Series B.

Trends 100

Trends Fractional VPE Startup Part-Time VPE 100

CloseSaaS

APRIL 28, 2014

I was talking to a good friend of mine who founded a very successful SaaS (Software as a Service) startup a few years ago and is currently considering a major new direction in their product.

Startup 52

Startup Software SaaS Sales 52

Tom Tunguz

APRIL 30, 2014

What a difference three weeks make! Since I wrote “ The Correction in SaaS Company Valuations ”, SaaS company valuations have continued to fall. As a basket, SaaS companies have fallen 33% from their highs (median), wiping all the gains for the last year. To make that point more explicit, below I’ve charted the total value of public SaaS companies over the last ten months.

Marketing 100

Marketing SaaS Pricing Enterprise 100

Tom Tunguz

APRIL 28, 2014

Since 2008, there has been a secular trend to increase cash compensation and decrease equity to startup management teams. Tho two tables below tell the story for VPs of Engineering (VPE) and VPs of Product (VPP) across the US broadly and in the SF Bay Area. VPE US SF. Cash +10% +16%. Equity -19% -17%. VPP US SF. Cash +26% +8%. Equity -31% -25%. In the past 5 years, VPEs have benefitted from a 10 to 16% increase in their cash compensation, but have seen their equity grants fall by 17-19%.

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Compensation Part-Time VPE Trends Startup 100

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Innovation

Tom Tunguz

APRIL 27, 2014

The chart above compares the contribution of two hypothetical inside sales people with $400,000 quotas to an early-stage startup’s finances. In this case, contribution is the 18 month revenue of sold customers tallied cumulatively minus the salary costs of $100k annualized of the sales person. I’ve modeled a six month linear ramp for the sales person to reach 100% of quota.

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Sales Hiring Sales Recruiting Customer Lifetime Value Company Culture 100