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. But the classic Silicon Valley angel investing $25k-$100k each usually do not seek all that many rights or control.

Venture Capital 225

Venture Capital Startup Investment Pricing 225

SaaStr

NOVEMBER 25, 2021

These are the Best of Times for venture capital. And as part of this, more and more big corporations are adding and expanding their venture arms. 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.

Outsourcing Services 175

Outsourcing Services Investment Venture Capital Pricing 175

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 226

Venture Capital Investment Pricing Startup 226

SaaStr

AUGUST 1, 2022

So much has changed in venture capital since the start of the year, and many founders don’t fully understand it. And founders don’t really need to understand all the changes in venture capital. That really leaves just $120m to invest. (Yes, But they should understand some. checks on average ($2.5m

Venture Capital 275

Venture Capital Startup Investment Pricing 275

SaaStr

MARCH 5, 2021

When you go to raise venture capital, if you are in the fortunate group of start-ups with access to venture capital, you’ll either have options (more than one VC wants to fund you), or you won’t. If (x) you only have 1 offer and (y) you need to raise venture capital, the only question to ask is probably When.

Venture Capital 326

Venture Capital Branding Pricing Investment 326

SaaStr

AUGUST 24, 2023

How much optionality do you give up when you raise venture capital? Your VCs may be hoping to make 50x-100x their investment, but they are expecting to make at least 3x. Had an investment with a quiet but big nine-figure exit this week The key? It’s really the last stop before IPO or Bust.

Venture Capital 180

Venture Capital Acquisition Pricing Investment 180

SaaStr

FEBRUARY 1, 2023

Public stock prices go up and down, after all. The real problem is how venture capital works in practice — the nichey, quirky way private financings and investing works: VC investment is high-ish risk and you need to know when to just walk away. A lower price doesn’t make a bad deal into a good one.

Venture Capital 244

Venture Capital Pricing Finance Investment 244

SaaStr

DECEMBER 8, 2019

Q: Why would an investor invest in a pre-revenue company? If you don’t understand it, it’s hard to understand how early-stage venture capital works. And you’d even wait if that meant the price went up a tiny bit. As long as the price doesn’t go up too much, it’s still generally better to wait. As long as you could.

Investment 144

Investment Revenue Venture Capital Pricing 144

Tom Tunguz

MAY 23, 2021

While not as hyperbolic an inflation rate as copper or lumber, the price trajectory of early stage cloud startups does result from a similar supply demand/imbalance. 3 of the years saw declining prices. Perhaps these prices are tied to blockbuster IPO markets. Investment processes last a few days. 2012: Facebook.

Software Review 364

Software Review Venture Capital Cloud Pricing 364

Tom Tunguz

NOVEMBER 19, 2020

If the government lends at a low rate, then the cost of capital is less, so companies should be able to invest more at the same cost, and grow faster. We should expect four outcomes: More money should enter venture capital funds. More dollars chasing higher growth, higher yield, and riskier investments.

Venture Capital 353

Venture Capital Government Pricing Investment 353

SaaStr

JULY 29, 2022

So we’re in a bit of a weird world and time in venture capital. Most VC funds “carry” startup investments at their last round price, unless their value has been materially impaired. And in the middle are growth funds and investments. So, the investment gets marked down. The public markets are down 50%+.

Startup 283

Startup Venture Capital SaaS Cloud 283

SaaStr

FEBRUARY 26, 2022

Now VCs are worried about the next round at least a bit, for all but their very top investments. Yes, everyone still cares about capital efficiency, even in the best of times. Basically, hunker down and carry on — if you have enough capital: * Fundraising has already gotten harder. Having 24+ months of runway is freedom.

Venture Capital 361

Venture Capital Cloud Startup SaaS 361

Tom Tunguz

APRIL 27, 2022

Reflecting on this question a founder posed this week, I remembered how we came to be here, the three eras of startup pricing: cash-flow, multiples, and discount-to-future-value. The art of startup pricing in a recipe. $5m Startups were priced first on forward-revenue multiple. Web3/crypto startups are often priced this way.

Startup 264

Startup Venture Capital Pricing Investment 264

SaaStr

FEBRUARY 2, 2021

Even these days, in The Best of Times for SaaS, many founders are wary of Venture Capital. But early-stage venture capital is so risky. And VCs usually are investing in you, in the CEO, as much as the start-up, at least in the early days. Even at a substantially lower price. And be honest. Probably not.

Finance 273

Finance Venture Capital Consulting Investment 273

SaaStr

FEBRUARY 25, 2023

VCs are expecting a positive return on their investment. First, if the exit price is at least 2x-3x the total amount raised, it can be worked out. You should only raise Venture Capital if you (x) have to, or (y) it’s “cheap”. By cheap, I don’t just mean price. The VCs will not be happy. But … Three things.

Venture Capital 239

Venture Capital Pricing Investment Revenue 239

Tom Tunguz

JANUARY 26, 2020

Nathan Heller published an article called Is Venture Capital Worth the Risk? It’s a well-researched critique of the venture industry. If you have ideas for how to improve venture capital for founders, please tweet me or send me an email with the link above. First, venture capital has become much bigger.

Venture Capital 201

Venture Capital Merchant Services Innovation Finance 201

SaaStr

APRIL 25, 2022

Seed investment isn’t slowing down. Basically three things are happening right now, which makes the announcements in the press and Twitter and LinkedIn confusing: Seed funds grew 20x in the past 2 years and are still mostly investing like it’s 2021. They have a lot to invest and valuations only change so much as seed.

Venture Capital 222

Venture Capital Investment Startup Pricing 222

Tom Tunguz

SEPTEMBER 19, 2019

I’ve been searching for a great history of the venture capital industry since before I joined Redpoint. Creative Capital. Nicholas traces the history of the venture capital industry back to whaling. They were called venture capitalists back then, but they serve the same role. Done Deals.

Venture Capital 197

Venture Capital Technical Review Investment Pricing 197

SaaStr

MARCH 27, 2023

They either raise prices or they don’t give discounts. They invest in the right tools, and in the right team, to understand the impact. Then they really invest in recovering the CAC as soon as possible. How do they achieve this? So how do they get there? They are really, really good at forecasting.

SaaS Payments 197

SaaS Payments Technical Review Software Review Venture Capital 197

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. Series As and Cs are roughly similar.

Investment 203

Investment Startup Venture Capital Trends 203

SaaStr

JUNE 26, 2020

And there are Series A investments of all different shapes and sizes these days. But here’s what you can assume: Most larger VC firms ($250m-$2b fund size) want to own 20% of each investment. They’ll even often pay a higher price to get that ownership if need be. It’s how “traditional” venture capital works.

Venture Capital 213

Venture Capital Investment Pricing SaaS 213

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

Trends 100

Trends Investment Startup Venture Capital 100

SaaStr

APRIL 26, 2020

VCs are Worried about “Deflation” in terms of pricing funding rounds. Mark sees multiples falling, which doesn’t just lead to lower prices … it leads to a Stop. “It makes price discover much more difficult.” It Angers Folks, So VCs Default to Newer Deals vs. Lower Priced Rounds.

Technical Review 287

Technical Review Venture Capital Innovation Pricing 287

SaaStr

JUNE 20, 2022

Logan Allin, Managing Partner at Fin Venture Capital, has reviewed hundreds of deck submissions and shares the secrets to crafting the perfect presentation to win over investors. Further, you need to showcase your pricing model and the different ways you plan to monetize. Keep Everything Clear, Simple, and To-the-Point.

Venture Capital 187

Venture Capital Management Business Model Investment 187

SaaStr

DECEMBER 5, 2022

Startups often begin with a bootstrapping phase with little to no outside investment. Experiment with different plans and position the pricing as whole numbers. Pricing is another vital lever in your business. But how do companies constantly reevaluate their pricing? Lever #6: Price localization.

Payments 130

Payments SaaS Payments Payment Solutions Venture Capital 130

Clouded Judgement

JANUARY 12, 2024

Every type of investor was broadly operating in a “risk on” mindset given the ZIRP environment, and the venture capital ecosystem was no exception. This is for information purposes and should not be construed as an investment recommendation. Altimeter is an investment adviser registered with the U.S.

Cloud 284

Cloud Venture Capital Acquisition Metrics 284

SaaStock

JANUARY 30, 2019

Grab an early bird ticket for SaaStock LatAm before February 15th to get the best possible price. Undoubtedly, Brazil is the most mature market for VC funding in Latin America – with both a diverse pool of venture companies and a range of promising SaaS businesses to attract funding. Stage: Early Stage Venture, Seed.

Venture Capital 155

Venture Capital SaaS Healthcare Finance 155

SaaStock

MARCH 8, 2019

Grab a ticket before the end of the day on March 8th to avail of Early bird prices. Today Carman is Founder and Managing Partner of Click Ventures, the globally renowned Hong Kong venture capital firm. Hooi Ling then moved on to Salesforce, where she was Senior Director for Pricing Intelligence and Monetization.

VP of Engineering 264

VP of Engineering CTO Coach Venture Capital SaaS 264

SaaStr

MAY 4, 2021

But here are some things that founders do that perhaps suggest you aren’t yet ready to raise venture capital. You change / make up a new valuation based on how much the VC wants to invest. Don’t change the price, at least not explicitly, based on a VC saying they’d invest $Xm or $Xk. “Oh And up to a point.

Venture Capital 219

Venture Capital Investment Pricing Business Model 219

SaaStr

OCTOBER 16, 2019

If that round is at $5m post-money, you get $1m to invest. If that round is at $10m post-money, you get $2m to invest. That’s a lot more to invest. If you push your investors to the max on price, they’ll think a lot more about if you are the right CEO. This can be important. More on that here: Tier 1 VC is Great.

Startup 183

Startup Venture Capital Acquisition Investment 183

SaaStr

MARCH 7, 2023

Pepper shares that ICONIQ, a venture capital firm with $10B under management, made fewer investments last year than ever before. Some other strategies for creating a more efficient go-to-market are: Adjusting pricing and contract terms with customers. PST, to unveil the data behind effective scaling.

Outsourcing Services 164

Outsourcing Services Scaling Venture Capital Forecasting 164

Tom Tunguz

JUNE 11, 2017

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. In 2016, venture capitalists reduced their investment in staff companies by 1 ⁄ 3 , falling to $2.8 The only exception is in the Series C.

Venture Capital 201

Venture Capital SaaS Trends Startup 201

SaaStr

APRIL 10, 2023

And as part of that push from my vantage point as Chief of Staff, I saw the need to continue investing in those early-stage startups so that we didn’t put all our eggs in one basket but that we continue to grow and nurture the companies that would go on to become great.” The Timeline: Pre-2018: $134 off/month, 1-year offer.

Startup 196

Startup Scale SMB Venture Capital 196

Andreessen Horowitz

JANUARY 23, 2024

I’ve developed my own method of investing and have learned to trust my insights even when they aren’t obvious. Being able to try new styles and colors at a great price, shopping without having to think too hard, is what Cider’s all about. Jeff Jordan, my coach who shared his hard earned operating and investing insights with me.

Venture Capital 104

Venture Capital Travel Startup Leadership 104

SaaSOptics

AUGUST 11, 2022

So far this year, only 42 companies have priced IPO offerings. So what should you do if you’re strapped for cash and have your sights set on venture capital? In this case, you may not be prepared to take on a round of venture capital. Reevaluate your billing and pricing models. It just works.

Scale 97

Scale Scaling Technical Review Venture Capital 97

Tom Tunguz

JUNE 26, 2018

Earlier this week, I wrote about the collapse in the number of seed investments. Second, many of the most active seed investors and institutional seed funds are investing in fewer companies. Second, many of the most active seed investors and institutional seed funds are investing in fewer companies. Why is this happening?

Venture Capital 160

Venture Capital Marketing Investment Pricing 160

Andreessen Horowitz

NOVEMBER 16, 2023

This rapid innovation has been fueled by an unprecedented amount of investment. Despite the recent slowdown, venture capital investment in the biotech sector in the US ballooned to nearly $25 billion in 2022 from just under $4 billion in 2000. But it comes with a hefty price tag of $2.1

Marketing 120

Marketing Venture Capital Innovation Investment 120