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.

Corporate VC Investments: Limited, But Real, Pros. And Cons.

SaaStr

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. New programs, or direct investments, may however.

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Investing in Valora

Andreessen Horowitz

Jackie Bona , … The post Investing in Valora appeared first on Andreessen Horowitz. cryptocurrencies & blockchains marketplaces mobile (& messaging) announcements consumer startups

Dear SaaStr: How Do VCs Find Companies To Invest In?

SaaStr

Q: How do VCs and investors find companies to invest in? Later stage VCs (Series B/C/D/E, etc) have it somewhat easier — they track startups breaking out and just reach-out. They track every startup that gets funded. They track who else invest.

ForgeRock: Top Startup Valuations Fell 19.95% in February and March

SaaStr

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.

Investing in Ambient.ai

Andreessen Horowitz

In the summer of 2011, a masked intruder managed to open a locked door of Nicira, the startup I co-founded, walk directly to the desk of a well known engineer, passing many others on the way, grab a server, and … The post Investing in Ambient.ai

Crunchbase: Early Stage Investment Doubled in 2021. But The # of Companies Funded Only Went Up 25%.

SaaStr

Everyone has slightly different data, but it helps answer a seeming conflict in the VC markets: Massive amounts of funding have flowed into startups … and yet … Why doesn’t it seem easier to raise seed funding for many startups?

Investing in ClickUp

Andreessen Horowitz

In venture capital, conventional wisdom and decades of startup history tell us that founding companies in crowded spaces is extremely hard.

Corporate VC Investments: Limited, But Real, Pros. And Cons.

SaaStr

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. New programs, or direct investments, may however.

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). startup technology venture-capital saas covid19

Investing in Clubhouse

Andreessen Horowitz

He told me about a new startup he was building—a mobile-first social … The post Investing in Clubhouse appeared first on Andreessen Horowitz.

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.

10 Tips to Avoid SaaS Burnout

SaaStr

One piece of “evidence” — a lot of fairly successful SaaS startups all sell at about the same point in time … about 5 years in. Making travel less literally painful is a high ROI investment, at least after you are at scale and have a few bucks in the bank.

SaaS 285

How Much Angel Investing is Too Much for Founders?

SaaStr

On other hand, too much time investing is a signal to others that the highest ROI of your time isn’t as a founder. That you might make more money, for less stress, investing in someone else’s company — than your own. CEOs you invest in want your time, and advice, which is great.

Should your SaaS Business Invest More in Content Marketing?

Baremetrics

Once users are in a position to invest in such a service, your SaaS should be the first that comes to mind. If you’re asking yourself how much time, energy, and finances you should be investing into developing your content, look no further.

How to Justify “Non-Sexy” Product Investments

Casey Accidental

A common issue leaders in product management, design, or engineering face is justifying investment in the “non-sexy” stuff. But I urge everyone I can in product to develop the intuition to support these initiatives without making teams jump through hoops to justify these investments.

Investing in Belong

Andreessen Horowitz

We’ve written extensively about the unbundling trend: large, horizontal platforms like eBay or Craigslist getting challenged by startups that better serve the specific needs of a vertical on that incumbent platform. .

The People Roadmap for Startups

Tomasz Tunguz

Startups create products. When a business is ready to scale, a startup ought to develop an organizational roadmap. The question for early-stage startups is how to start building this structure. Most startups begin either with a product marketer or a demand generation specialist.

How to prepare your startup for acquisition

Chart Mogul

Selling a startup can be an exhausting, overwhelming process, but the right preparation can make it much easier. 4x entrepreneur Andrew Gazdecki shares how you can better prepare yourself for your startup's acquisition, and make the journey a rewarding one.

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.

Why we invested in Athenian

Point Nine Land

Athenian is Eiso’s third startup. Why we invested in Athenian was originally published in Point Nine Land on Medium, where people are continuing the conversation by highlighting and responding to this story.

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.

Why I'm Investing $1 Million In BitClout

OnStartups

I’ve decided I’m going to invest $1 million in BitClout the blockchain-based, crypto-currency powered social network that is all the rage (at least within some circles). Example: I’ll be investing $100,000 in @bitswap (and here, I mean buying equity/shares in the startup).

Battery Ventures: VC Investments Are Way Up. But Deals Aren’t.

SaaStr

Battery Ventures’ data says while VC investment $$$ are on fire — they aren’t going into more startups. PE firms have enough capital to buy as many startups as all the public SaaS companies do. The post Battery Ventures: VC Investments Are Way Up.

Guess the Startup Answers

Tomasz Tunguz

Thanks to the many readers who wrote in to Guess the Startup on Friday. I had three goals for the Guess the Startup Post. After all, an investor looking to buy the best database investment will have to choose between Ethereum and Mongo (amongst others).

Eating My Own SaaStr Dogfood: Why I Invested in a Start-up With a Seeming 50+ Competitors

SaaStr

This was my first venture investment. One of the earliest posts I did on SaaStr was back in 2013 when I made my first venture investment, co-leading the seed round in Pipedrive. I also made a lot of mistakes on this investment I’ll share in another post.

What Are the Different Stages of a Startup: An Introduction?

SmartKarrot

While it is a major step to get up and start, the next question in line would be ‘what stage is the startup at?’. What stage is the startup at? Well, this is a question that most startup owners are asked, but how do you know what stage you are at? Stages of a startup.

Dear SaaStr: Do VCs Prefer Startups With No Competiton, Or Those Disrupting Competitive Spaces?

SaaStr

We did an analysis of SaaS startups that had IPO’d and about 70% were new versions of something new, and 30% were truly new categories: So VCs like to do both. It used to be that you couldn’t make much money as a VC investing in the ultimate #2 or #3 in a space.

A Weird and Wacky Approach To Angel Investing

OnStartups

An Odd Start To My Angel Investing. I did not plan to do another startup. I had done it for 10+ years and lived the notorious startup life. My conviction to not do startups lasted only a few.weeks. During classes (which I loved), I missed the startup life.

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.

What VCs Do With Their Time. Hint: Most of It Isn’t New Investments

SaaStr

Yes, VCs themselves have to raise the money they invest. Manage existing investments. And startups that fail often take a fair amount of time and drama to wind down. Hint: Most of It Isn’t New Investments appeared first on SaaStr.

Dear SaaStr: If So Many Startups Fail, Why Does Everyone Want to Do Them?

SaaStr

Folks want to start startups because they have a chance to look like this: The true definition of a tech startup is probably one that if it truly achieves product-market fit, can scale almost infinitely. The above example is of my third venture investment, Talkdesk.

Hacks For Founders Of High-Growth Startups With DigitalOcean’s CEO Yancey Spruill

SaaStr

The life of a startup is not a smooth ride. Starting with his time as an investment banker and later working in SaaS, Yancey Spruill, CEO at DigitalOcean , watched venture capitalists invest in seemingly strong companies, only to sell them off.

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.

The Three Eras of Startup Valuations

Tomasz Tunguz

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. But, these startups grow faster than the public companies so the market should give them the benefit of the doubt. Web3/crypto startups are often priced this way.

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. But finding just one $500m startup is hard enough. The post Why Do VCs Want To Own So Much When They Invest?

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.