SaaStr

NOVEMBER 25, 2021

Traditional VCs usually reserve another 1x-2x of their first check for later investments. If the synergies are real, they’ll happen irrespective of some token investment. An investment won’t create a partnership. An investment may anoint one vendor in the space as the preferred vendor over competitors. Be realistic.

Outsourcing Services 337

Outsourcing Services Investment Venture Capital Pricing 337

SaaStr

JULY 29, 2022

But what about startups? Most VC funds “carry” startup investments at their last round price, unless their value has been materially impaired. Even if the startup isn’t quite a rocketship anymore, most smaller VC funds will stay hold it at the same value. And in the middle are growth funds and investments.

Startup 283

Startup Venture Capital SaaS Cloud 283

SaaStr

SEPTEMBER 29, 2023

Many of you are familiar with this visual, most likely created by an investment firm. This showcases a narrow segment of a niche market, and it’s missing a lot of startups. Any startup in any reasonable category likely has dozens of competitors, and Altman believes the best strategy to compete in 2023 and beyond is multi-product.

Scale 222

Scale Scaling Startup Sales Hiring 222

SaaStr

JANUARY 4, 2024

In 2022, revenue growth held up for many leaders, but share prices and multiples cratered. It was mixed actually, even if startups didn’t seem to get a breather, it wasn’t so bad for most public SaaS leaders. per Jamin Ball’s great summary below The Top 10 in SaaS saw their stock price up 136% on average!

Startup 177

Startup SaaS AI Pricing 177

SaaStr

AUGUST 1, 2022

Because in the Best of Times, there’s always more money to invest in top performers — and even mid-pack performer s. That really leaves just $120m to invest. (Yes, Yes, there are ways to “recycle” to get the amount available to invest up, but that’s not super important for this analysis). checks on average ($2.5m

Venture Capital 275

Venture Capital Startup Investment Pricing 275

SaaStr

APRIL 10, 2023

However, what many businesses may overlook is the startup segment. Often, startups are lumped in with small businesses, yet this approach fails to recognize what motivates and attracts these early-stage companies. Why Seek Out Startups? How is it that you want to sell to startups differently than the rest of your customer base?”

Startup 197

Startup Scale SMB Venture Capital 197

Tom Tunguz

DECEMBER 11, 2022

First, the premium to the public price is 31%. As Michael Mauboussin writes in Expectations Investing , there’s information in price. Coupa’s sale continues a trend of private equity buying venture backed startups , a result of record PE fundraising & depressed multiples. Second, the multiple is 8.4x

Acquisition 246

Acquisition Startup Software Pricing 246

SaaStr

APRIL 18, 2022

These platforms are used to trade shares in the largest, late-stage startups: Forge Global, which just SPAC’d / went public itself, found the clearing price for trades for top startups fell 10% in February and another 10% or so in March , after just starting to go down in January. But this is … to be expected.

Startup 274

Startup Pricing Investment Data 274

SaaStr

AUGUST 12, 2022

Dear SaaStr: How Much Money Does a VC Make If Their Investment Sells for One Billion? Let’s say: The fund owns 10% at exit, with a blended entry price of ~$100m (fund invested early, but also did some pro-ratas) and thus a total blended investment across rounds of ~$10m. Often not as much as you’d think.

Investment 227

Investment Pricing Startup Sales 227

SaaStr

DECEMBER 19, 2022

Dear SaaStr: Why Are We Seeing Such a Big Drop in Startup Fundraising? Cooley is one of the top law firms representing startups , and so they have data that no one else quite has. They know exactly what venture deals are priced at, exactly how many are happening, and exactly what is happening across 100s and 100s of leading startups.

Startup 211

Startup Education Pricing Investment 211

Tom Tunguz

DECEMBER 27, 2021

Ten years ago, startups pulled capital from the capital markets. A startup raised money, executed for 12-24 months then sought more capital on Sand Hill, flaunting milestones to justify a higher valuation. Third, investors price these infusions on multiples just the way a sell-side equity analyst would.

Startup 256

Startup Strategy Marketing Entertainment 256

Tom Tunguz

JULY 15, 2017

The article pointed to the seeming collapse in the amount of venture capital raised by San Francisco startups relative to other regions. The slowing of venture investment more broadly across the US serves as a backdrop to San Francisco’s particularly strong correction. Now it’s the Valley startups’ turn to raise.

Investment 202

Investment Startup Venture Capital Trends 202

SaaStr

APRIL 19, 2024

How do you reverse-engineer your first million as a SaaS startup founder? He’s invested in startups as a VC since 2013 and has 10x his fund. His first million came from a startup making implantable batteries from nanomaterials that sold for $50M after 12.5 That’s how you approach pricing until you’re really big.

Engineering 237

Engineering Business Model Pricing Scaling 237

SaaStr

OCTOBER 6, 2023

If you’re a seed-stage startup, Michael shares the best ways for you to present your company to startup investors. They could talk about how they were starving startup founders who couldn’t pay their rent. If this is week two of your startup, you probably don’t have any traction. Let’s go back to Airbnb. Don’t include it.

Payment Methods 213

Payment Methods Startup Payment Solutions Sales Hiring 213

SaaStr

NOVEMBER 13, 2023

To me, the most jarring statistic was this one: 80% of IPOs since 2020 are trading below their IPO price, or “broken ”: So what, you might think? But the problem is this — when folks don’t make money off startups, everything gums up and slows down. Most VC investments do need to make money. Buyer beware? Not all, but most.

Pricing 250

Pricing Investment Startup Data 250

SaaStr

NOVEMBER 25, 2021

Traditional VCs usually reserve another 1x-2x of their first check for later investments. If the synergies are real, they’ll happen irrespective of some token investment. An investment won’t create a partnership. An investment may anoint one vendor in the space as the preferred vendor over competitors. Be realistic.

Outsourcing Services 175

Outsourcing Services Investment Venture Capital Pricing 175

SaaStr

MARCH 4, 2024

We don’t need it, but at that price — it’s basically free” 2024: “Free? Raising a high-priced round, just to raise it Raising a lot of extra money on SAFEs Raising too much “non-dilutive” capital Used right, these tools all can work well. A High Priced Round Puts a Ton of Pressure On The Exit and Growth Rate Raise $2m, $4m, $10m?

Finance 215

Finance Payment Solutions Payments Pricing 215

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

Chart Mogul

JANUARY 27, 2023

In this episode of SaaS Open Mic, I speak with Matt Lerner, the founder and CEO of Startup Core Strengths. He shares his perspective on establishing and optimizing pricing using the Jobs to Be Done framework. Later, … In this episode of SaaS Open Mic, I speak with Matt Lerner, the founder and CEO of Startup Core Strengths.

Pricing 52

Pricing Startup PayPal Payment Methods 52

SaaStr

MARCH 16, 2024

Why do scale-ups and startups do this? Keeping the cap table as tight as practical does not benefit some folks on it — but it does make a startup easier to run. This has often been the case in PE, in European startups, buy-outs, etc. startups in many ways. #5. Personally, I’ve lost here. Ok but you asked Why.

Systems Review 207

Systems Review Startup Trends Pricing 207

Neil Patel

NOVEMBER 9, 2020

The problem with selling your startup is the long exit time. Who wants to wait almost a decade to buy a startup when the face of tech is evolving at such a rapid pace? Plus, the price tag on those more established businesses often run into the billions. That’s an expensive mistake if you make the wrong investment.

Technical Review 144

Technical Review Payment Methods Acquisition Development Team Review 144

Baremetrics

AUGUST 8, 2021

For most, the easiest ways to increase customer acquisition rates are to offer a freemium model or price your product on the lower end of the spectrum. However, to keep your business afloat, you’ll need to effect a SaaS price increase. Ensures You Attract the Right Customers When Should You Increase Your Pricing?

Pricing 111

Pricing SaaS Scale Churn 111

Tom Tunguz

JANUARY 16, 2018

Last week, I shared a presentation with an executive team at a large public SaaS company on everything I’ve learned about pricing. Here’s a summary of the frameworks and theory that I’ve aggregated over a decade of investing in startups. Why do we set prices? There are four components to pricing: 1.

Pricing 240

Pricing Market Research Interviewing Product Marketing 240

SaaStr

NOVEMBER 17, 2023

PE wants to invest in leaders, if not necessarily always #1 in a category. The startup I invested in that were acquired by PE in the 2020-2021 Boom were acquired for 8x in one case, 12x in another, and 15x in a third. The prices would be lower today for the latter two I suspect. So what do they pay on average?

AWS 239

AWS SaaS Pricing Acquisition 239

SaaStr

SEPTEMBER 20, 2023

So Harry Stebbings was kind enough to have us back in the new group format on 20VC with 2 of the legends in seed investing, Eric Paley of Founder Collective and Mike Maples of Floodgate: While both aren’t pure SaaS investors, they’re both in the top 1% (!), with investments in The Trade Desk, Okta, Airtable, Slack and much more!

Venture Capital 227

Venture Capital Investment Pricing Startup 227

SaaStr

OCTOBER 3, 2023

The reality is, few folks have all 3 options available to them: Most startups cannot attract venture capital, at least not in the early days. Most startups can find some angels to invest, but not always enough. Many startups cannot find a way to self-fund / customer-fund to extend a long-enough runway to achieve success.

Venture Capital 225

Venture Capital Startup Investment Pricing 225

Tom Tunguz

DECEMBER 26, 2018

Just where are we pricing SaaS companies today? Then prices began a long descent into the February nadir at 3.3x These are exceptional businesses growing at exceptional rates trading at exceptional prices. What does this mean for early stage startups? Reading the news in the past week made me wonder.

Pricing 182

Pricing SaaS Startup Investment 182

SaaStr

JUNE 14, 2021

The biggest change is that growth investors, the folks that invest at $10m+ ARR, are often now looking for SaaS startups to be tripling at this stage — not doubling. Not for the premium prices, at least. What’s the bar now to be a decacorn-in-waiting? Or at least growing 150% or so. Is that fair? Not T2D3 anymore.

Startup 242

Startup SaaS Cloud Pricing 242

SaaStr

FEBRUARY 17, 2023

In this edition of CRO Confidential, Sam Blond (former CRO at Brex and current Partner at Founders Fund) hosts his former colleague Lucas Fox (GM of Brex for Startups). Churn vs. Expansion: Where to Start As many startup founders know, in the beginning, acquiring customers is key to getting off the ground. Something missing?

Retention 200

Retention Revenue Startup Sales Hiring 200

Clouded Judgement

FEBRUARY 9, 2024

Going in to this earnings season I expected a big driver of stock price performance to be how 2024 full year estimates change pre / post earnings. Since the macro feels more “stabilized” it felt fair to assume “are numbers going up or down” to be the question most correlated with stock price performance.

Cloud 195

Cloud Pricing Startup Revenue 195

SaaStr

APRIL 3, 2022

Most VC funds “mark-up” their investments to the price of the last round and … just sort of leave it there. But they generally have a lot of lattitude on when to continue to carry an investment at the last round price. Billion to invest. And if it goes to $0, of course, they have to write it off.

Technical Review 283

Technical Review Startup Investment Pricing 283

SaaStr

DECEMBER 13, 2022

Cooley is one of the top law firms representing startups , and so they have data that no one else quite has. They know exactly what venture deals are priced at, exactly how many are happening, and exactly what is happening across 100s and 100s of leading startups. And at the earliest part of investing, seed is still active.

Education 283

Education Startup Pricing Investment 283

Tom Tunguz

FEBRUARY 22, 2022

PitchBook surmises non-traditional VC (aka hot money) comprises 78% of venture dollars invested in 2021. Across Series A to Series E rounds in the US, hedge funds participated in 63% of startup financings worth more than $200B in 2021. Last year, early stage prices expanded by half without the benefit of hedge-fund money.

Finance 359

Finance Pricing Investment Startup 359

Tom Tunguz

DECEMBER 9, 2020

Linda’s professional journey has taken her across businesses of all sizes — from startups in hypergrowth mode to mature, multi-hundred million-dollar businesses. It was there that she felt inspired about the impact she could have on a startup, and from there she became a founding member at Tapjoy, and then, Nextbit. Yo-Jud Cheng.

Startup 258

Startup Management Systems Review Leadership 258

Tom Tunguz

JUNE 2, 2018

There are five forces driving the startup ecosystem today. Private capital has become so abundant that it supplies hundreds of millions and billions to startups. And we all know what happens when demand exceeds supply: prices increase. All of this means more efficient pricing of startups. Market maturity.

Startup 182

Startup Acquisition Pricing Metrics 182

Tom Tunguz

DECEMBER 31, 2023

Record inflows into tokens fuel all-time highs in Bitcoin, Solana, & higher performance L1s who offer better price/performance to market. US VC investment falls from $275b in 2022 to $200b in 2023 & sustains at about $200-220b in 2024 as LP interest in venture attenuates after the euphoria in 2020 & 2021. 3 KnowBe4 4.6

AI Search 234

AI Search AI Scale Headcount 234

SaaStr

JANUARY 6, 2022

Even with these market wobbles, if you’re fortunate enough to be a “hot” startup in SaaS today you may find yourself oversubscribed in a fundraising round, and/or with investors that really want to invest between rounds when you don’t want or need any more money. Investing in essence now, but at the price of the next round.

Finance 218

Finance Pricing Startup Investment 218