My Top 8 Mistakes Investing in SaaS Startups

SaaStr

My biggest mistakes in SaaS investing actually in the end haven’t been truly costly because, in the end, power laws mean your winners overwhelm your losers if you do it right. But still I have screwed up a number of investments. Investing when the CEO was a bit of a B.S.

Declan Kelly Joins Techstars Investment Team

TechStars

Kelly will help Techstars increase connectivity between startups and the global venture community to fuel innovation and growth. In his new role, Kelly will expand Techstars’ global investor ecosystem, with a focus on Europe, Middle East and Africa (EMEA), connecting more investors with some of the most exciting and disruptive startups around the world. . About Techstars Announcements Declan Kelly EMEA investment team investments investors

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When a VC Investment Fails, Does That Mean It Was a Bad Investment? Probably Not

SaaStr

With venture capital investments that fail, is the problem most often with the entrepreneur or was it a bad investment by the VC? The earlier stage you invest, the more often some of them just … don’t work out. Especially when you invest early. Now imagine you invested in say Zoom and own 11%–12% like Emergence and Sequoia do. More on the math here: What has a higher chance of making you money, being a venture capitalist or a startup founder?

How Important Are Happy Employees When VCs Invest?

SaaStr

Do startup investors care about how employees are treated where they invest? Last week, I literally was on a back-door reference call for a $250m+ valuation investment (not a company where I am an investor) where a late-stage VC did not invest just for this reason. Few seed-stage VCs I know will invest in a CEO they don’t personally want to work with. Later stage investing becomes more purely transactional).

How does an investor protect himself when investing in a startup?

SaaStr

Q: How does an investor protect himself when investing in a startup? Investing in startups actually requires a lot of trust by VCs and investors. This is more common in angel investing than you might think. And a lot of startups have some bad behavior here. Another reason investing in founders that have already made you money is attractive. Just remember there is a lot of trust involved in start-up investing.

Janet Bannister on human-centered investing

TechStars

Canadian VC Janet Bannister, a partner at Real Ventures, loves investing in “conscious founders” who are trying to make the world a better place. Her style of “human-centered investing” prioritizes people and relationships, and investing in smart, self-aware, teachable entrepreneurs. . Now she’s all in, with an approach that she calls “human centered investing.” Like Techstars, Janet believes that team is paramount in whether a startup will succeed or not.

Will VCs who invested in my startup be happy to exit with a 4-5x return after 4.5 years?

SaaStr

Q: Will VCs who invested in my startup be happy to exit with a 4-5x return after 4.5 So why isn’t 4x-5x good enough on any individual investment? If you put all the fund into 1 investment, then a 4x-5x return would be plenty. But if the investment was say 3% of the fund (a typical amount), then that would only return 12%-15% of the fund. VCs know only a few of their investments will knock it out of the part.

Are VCs Still Investing?

Point Nine Land

At the same time, tech companies are better off than any other industry, and, to answer the question posed in the headline, VCs are still investing (we’re one of them). Let’s drill down even further and take a look at early-stage SaaS deals (tagged “SaaS” or “Cloud” in Crunchbase): A few things that stand out here: The amount of pre-seed/seed financing raised by SaaS startups has more than doubled from May 2019 to May 2020. startup technology venture-capital saas covid19

Investing in the Podcast Ecosystem in 2019

Andreessen Horowitz

In the world of podcasting, the flywheel is spinning: new technologies including AirPods, connected cars, and smart speakers have made it much easier for consumers to listen to audio content, which in turn creates more revenue and financial opportunity for … new media consumer startups entertainment new mediums

Why Do VCs Want To Own So Much When They Invest?

SaaStr

Why Do VCs Want To Own So Much When They Invest? To meet its own financial goals, a VC firm has to return 3x the amount it invests. And to reach that goal, to simplify, for most VC funds, each investment needs to be able to “return the fund”, i.e. return 1x the entire amount of the fund. But finding just one $500m startup is hard enough. The post Why Do VCs Want To Own So Much When They Invest? It’s confusing. Why do VCs need to own “so much”?

Expanding My Investment Thesis to Run the MetLife Digital Accelerator powered by Techstars

TechStars

Today, I start my next adventure in startup investing – I’m the new Managing Director of the MetLife Digital Accelerator powered by Techstars. My objective is to give the startups I invest in tremendous support in acquiring customers and fundraising from investors. Read on to learn more about my investment thesis or skip to the bottom to watch the AMA to learn more. My Mental Model for Investing in Startups.

Why It Shouldn’t Really Matter If Your VC Loses All The Money They Invested in You — On The First Check In, At Least

SaaStr

Why do venture capitalists invest in lots of companies even though 90% of them go bankrupt? Well, 90% of most venture-backed startups that don’t go bankrupt. Because if you do VC investing right, the winners far outpace the losers. that does 25 $2m investments.

Why Your Startup Doesn't Invest Sufficiently in its Differentiators

Tomasz Tunguz

When a startup has established product market fit, the differentiator is clear. As the product team talks to customers, they are likely to hear feedback encouraging more investment in MMRs and neutralizers. The startup must invest in that differentiation to sustain their market lead. Defending differentiation, investing in it, and reinforcing the startup’s competitive advantage.

A sneak peek into Point Nine's investment thesis

The Angel VC

Over the last couple of weeks and months we spent some time putting our investment thesis on paper. The purpose of this exercise was to challenge and discuss our implicit assumptions and to get everyone on our team aligned on what kind of investments we seek. One of the things that being very clear about our investment focus helps with is getting to “no” faster. Expect a follow-up post with more details from Pawel (who’s leading most of our marketplace investments) soon.

Two years into investing out of our first Impact Fund: here’s what we’re learning

TechStars

Since then, we have made over 73 investments and our fund is nearly fully invested. . In addition to investments made through our Techstars Impact Accelerator (Austin, TX), Techstars Sustainability Accelerator in partnership with The Nature Conservancy (Denver, CO) and Cox Enterprises Social Impact Accelerator powered by Techstars (Atlanta, GA), this fund participates in Seed and Series A deals of impact companies across our global ecosystem as well.

How do VCs value startup?

SaaStr

Now, VCs have a benefit in that not every single investment has to be a unicorn. If you are early, and have no track record or even word-of-mouth … but if both Google and Facebook have bought your product and said you are the best-in-next-generation now … everyone will want to invest. The post How do VCs value startup? There is one common factor, that founders know, but often lose track of in their pitch: every VC, at any stage, is looking for outliers.

How Much Should A SaaS Startup Invest in Sales & Marketing?

Tomasz Tunguz

How much should a SaaS startup invest in sales and marketing at different stages of the business? Sales and marketing investment depends on many different factors including establishing product market fit, the business’s sales model (inside, field, freemium), and not least, cash balance and fundraising capacity. The chart above shows the sales and marketing investment of publicly traded software companies at different revenue levels.

Q1 2016 Startup Investment Trends

Tomasz Tunguz

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 Seed investments in dollar terms have fallen by about 30% in the last two quarters. Series As are flat at roughly $2 billion invested per quarter.

Announcing our investment in ChartMogul

The Angel VC

We’re thrilled about the investment. The decision to invest in ChartMogul , which has developed an analytics solution for subscription businesses, was a very easy one. So when Nick told me a few months ago that he’s leaving Zendesk to start his own startup, I was sad for Zendesk but also very keen on learning more about his new gig.

Seed Investing Today: What’s Changed, What Hasn’t with Aileen Lee and Jason Lemkin (Video + Transcript)

SaaStr

What Nobody Tells You About Seed Investing with SaaStr CEO Jason Lemkin and Cowboy Ventures Founder and Partner Aileen Lee. I think it gives us a perspective that maybe we don’t get in some other places, in addition to many great investments over the years. On either a scale of 1 to 10 or a percentage basis, where is seed investment? I think that’s going to be an awesome time to invest, but I don’t think we’re quite there yet.

The Decline of Investment in San Francisco Startups

Tomasz Tunguz

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. The startups raising hundreds of millions or billions might bias the data, I thought. Bloomberg published a post this weekend called San Francisco’s VC Boom is Over.

Startup Investment Trends in 2015

Tomasz Tunguz

In the last six months, VCs have invested more than $57B according to Mattermark data , which puts 2015 on pace to exceed 2000 as the year the most venture capital will be deployed, ever. The chart above contrasts the top 12 sectors receiving venture funding in the US, and plots the relative share of dollars invested by month. Sectors receiving an increasing amount of investment include biotechnology, financial technology, healthcare, and social networking.

5 Things that Kill Startups with Y Combinator

SaaStr

Y Combinator CEO Michael Seibel is featured in one of our most-watched SaaStr videos of all time — so we were delighted to have him back during our SaaStr at Home event to share the top 5 things that kill startups after their seed rounds, and how to avoid them. In this tactical session, he highlights the trends he’s seen most commonly seen in startups that die and offers insights on the causes, symptoms, and solutions. #1 Startup in a space you have organic insights in.

The Startup Funding & Financing Guide

Baremetrics

There are more funding and financing options for startups today than there ever have been before. There’s also been an explosion in debate and transparency about navigating startup funding and financing. Let’s explore the funding and financing options for your startup. Funding Your Startup. For Companies A, B, and C, they all exchanged equity for capital, leveraged debt, and used profits from customers to fund their startup.

How do venture capital general partners resolve investment choice disagreements? If a number of partners think a certain startup is a good portfolio candidate and others don’t agree, what happens?

SaaStr

The more junior the partner, or investing professional, the more she/he needs others to buy-in. Smaller investments (measured as a % of fund size) often don’t require as much buy-in. An investment < 0.5% Most funds believe the best companies were less obvious investments. Are any of her investments “hot deals” yet? The post How do venture capital general partners resolve investment choice disagreements? It varies.

Are We Investing Enough in Our Managers?

Tomasz Tunguz

” I wondered, are we investing enough in our managers? Talent is the largest investment of an early stage company. 80%+ of startup operating expense flows to compensation. This is why investing in each creates a competitive advantage. That’s a quite an investment for an early stage company. How should startup invest in improving its management? One of the startups I work with has an MBA club. I met a seasoned executive recently.

Ideas we'd like to invest in: Industry-specific SaaS solutions

The Angel VC

Following my post about electronic signing I'd like to describe another area that we'd like to invest in. It's not a specific idea this time, rather a category of startups that we're very interested in: Industry-specific SaaS solutions I talked about the topic before when I wrote about "The land of a thousand niches" and touched on it in my "1st DO for SaaS startups". clio ideas we'd like to invest in jobber saas software as a service verticals

Mary Grove on the origins of Google for Startups & Startup Weekend

TechStars

From Google for Startups to Startup Weekend to Rise of the Rest and beyond, Mary Grove is passionate about community-driven change, and helping make it happen. Over 14 years, she went from working on the IPO deal team to starting Google for Startups. Google for Startups very first partner was Startup Weekend, which Mary helped to spread from a few dozen to 140 countries, vastly broadening its impact. Google for Entrepreneurs – became Google for Startups.

Ideas we'd like to invest in: Mobile-first SaaS

The Angel VC

I just have a feeling that there are huge opportunities ahead for startups which rethink how people will use business applications in the future. you're working on a mobile-first SaaS startup, let me know! BYOD ideas we'd like to invest in mobile saas

Mobile 111

What should a startup know before rejecting an outside investor?

SaaStr

Q: What should a startup know before rejecting an outside investor? Investing in start-ups is very risky. There just almost never is enough time and bandwidth to know for sure if you should do the investment. Startups are … raw. And startup investment periods are often compressed. And yet … and yet when you see a startup you think is in the top 5%, you want to invest. The post What should a startup know before rejecting an outside investor?

The Riskiest Investment a Startup Can Make

Tomasz Tunguz

Marketing investments are unlike any other investment a startup. They are the least-tangible, least-measurable investments and that’s why they are perceived as the riskiest investments. After raising a round of capital, a startup’s management team has a pool of capital to invest. All of the aforementioned products have long-term value and the benefit of the investment can be seen immediately.

Using Product Led Growth as an Indicator for Investment w/OpenView Venture Partner, Ashley Smith (Video + Transcript)

SaaStr

I’m talking about product-led growth as an investment strategy, but really my background is 10 years of operating experience in the product-led growth world. Now I’m investing in that. I say investment strategy, but really it’s like how do you build a company that’s focused on product-led growth? Thought I wanted to be an engineer, quickly realized I actually prefer the customer facing side of the startup world.

Why Hiring Senior Leaders Early Is Worth the Investment

OpenView Labs

Engineering is a huge component of many startups. Investment is for this very reason, and in my experience, VCs get excited about the prospect of hiring big because they know that proven and seasoned winners really move the needle. The number of decent startups in London (and elsewhere) is increasing. It can feel wrong on some level to invest so much in someone who’s not necessarily hands on, whether it’s writing code, or performing some other classically tangible role.

Why It’s More Stressful to Run a Venture-Backed Startup. And How To Work Around That.

SaaStr

Q: How stressful is it to run a venture-backed startup? Your investors want to see an “exit” of at least 10x what they invest. The post Why It’s More Stressful to Run a Venture-Backed Startup. Being a CEO in general is pretty stressful ??.

Techstars Alumni Can Apply to the $5 Million 43North Startup Competition for Free

TechStars

The startup ecosystem in Buffalo, NY is on the rise. Today, Buffalo has more startups than ever, as well as a growing community of enthusiastic startup employees, customers, suppliers, mentors, and storytellers, all supporting this groundswell of entrepreneurial activity—more than Buffalo has seen in generations. VCs are noticing, too, and showing their approval with increasing investments. . Learn more about the Techstars Startup Ecosystem Development program. .

5 Growth Hacking Ideas for Startups

Teamgate

Startups – they can either be exciting, scary or both at the same time. The prospect of getting into business to address a pain point someone or another has experienced can be daunting, and thinking about how to keep your startup sustainable and profitable can also be a little frightening. But growing a startup (and keeping it afloat) is easier now more than ever. For the past years, growth hacking has been the way to go to make even the newest startups flourish. .

The Cadence: How to Turn Your SaaS Startup into an Army with David Sacks (Video + Transcript)

SaaStr

Really, the better the startup is doing, the more chaos there is, because they’re growing faster, this isn’t a problem that you solve by not growing fast, this is actually caused by growing fast. So, the first insight is that there’s two key systems in a startup.

Techstars and Innovation Leader Reveal Best Practices for Leveraging Startups in Corporate Innovation

TechStars

Research shows corporations create coherent partnering and investing strategies with startups. BOSTON & BOULDER, CO – Innovation Leader today released a new survey sponsored by Techstars , the worldwide network that helps entrepreneurs succeed, which shares how executives at large corporations are approaching engagements with startups and other disruptors to fuel corporate growth.

The Fastest Growing Areas of Startup Investment in 2015

Tomasz Tunguz

Earlier this week, we examined the trends in the major categories of startup investment including eCommerce, Software, Social Networking and Education. But which lesser known startup sectors are starting to raise venture dollars? Each year, starting in mid-2012 through mid-2015, these sectors have grown their investment dollars by more than 145%, according to Mattermark data. Space travel startups look to conquer the final frontier.

Techstars Announces $42 Million Investment

TechStars

Investment round led by SVB Financial Group to speed Techstars global expansion and continued growth. July 30, 2019 – Techstars , the worldwide network that helps entrepreneurs succeed, today announced a $42M investment led by SVB Financial Group , the holding company of Silicon Valley Bank, with additional participation from existing investors including Foundry Group. BOULDER, Colo.