Software Investors for 24 Years
Innovation Isn’t Just for Products
(innovation on business models)
Experienced Software Investors
First Software-Only Fund
Founded September 1989
$1.2 B under management
Fund VI: $200 M
Com...
Some Logos
Team
Market
Market
10 Slides Cover the Basics
1. Executive Summary
(Who you are, what you do, how you make money)
2. Team
3. Market (Trends)
...
Financial Models
Year 2011 2011 2012 2012 2012
Quarter Q3 Q4 Q1 Q2 Q3
Sales 0 10,000 90,000 45,000 240,000
COGS 0 0 0 0 0
...
Financial Models
Financial Models
Financial Models
= How you think about your business
= Metrics Driven
= As Important as your product. Really.
Business Models
Direct / Channel
Pricing
Partnership Leverage
Sales Cycles
Cost of Sales / Cost of Customer Acquisition
Hi...
Business Models
OLD
- High priced sales guys
- Big expense accounts
- 9 month sales cycles
- Quarterly rhythms
- Fortune 5...
High Velocity Bus. Models
First, a few caveats….
High Velocity Bus. Models
(At the time a $15M runrate company)
No sales people
$80K in keyword spend  500 warm leads
8 in...
High Velocity Bus. Models
(At the time a $15M runrate company)
The Numbers
Sales Cycle 45 days
New Deals per month 45
Deal...
High Velocity Bus. Models
(At the time a $15M runrate company)
Sales Process…eight step methodology
Step 1 (10%) – lead is...
High Velocity Bus. Models
(At the time a $15M runrate company)
METRICS tracked (by rep by week):
Activities (moving people...
IPO’s to study
Secret Weapons
Content: blogs, SEO, SEM
Product: flow built in
Tools: automated
**Most founders are engineers, this is you...
Lars Leckie, Managing Director
lars@humwin.com
Hummer Winblad - Software Investors for 24 Years - Lars Leckie
Hummer Winblad - Software Investors for 24 Years - Lars Leckie
Hummer Winblad - Software Investors for 24 Years - Lars Leckie
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Hummer Winblad - Software Investors for 24 Years - Lars Leckie

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Lars Leckie - Venture Capitalist at Hummer Winblad Venture Partners
LinkedIn Profile: http://www.linkedin.com/in/larsleckie
Twitter Profile: https://twitter.com/LarsLeckie
Hummer Winblad: http://www.humwin.com/


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Hummer Winblad - Software Investors for 24 Years - Lars Leckie

  1. 1. Software Investors for 24 Years
  2. 2. Innovation Isn’t Just for Products (innovation on business models)
  3. 3. Experienced Software Investors First Software-Only Fund Founded September 1989 $1.2 B under management Fund VI: $200 M Committed to Software 23 years of working together 5 investment professionals Core Software Investment Areas Enterprise Infrastructure Enterprise Applications Consumer Infrastructure
  4. 4. Some Logos
  5. 5. Team
  6. 6. Market
  7. 7. Market
  8. 8. 10 Slides Cover the Basics 1. Executive Summary (Who you are, what you do, how you make money) 2. Team 3. Market (Trends) 4. Secret Sauce Overview/Background 5. Customers (Potential of Reference-able) 6. Product Plan 7. Engineering Roadmap 8. Sales Model and Marketing Outline 9. Business Model / Financials 10. Summary
  9. 9. Financial Models Year 2011 2011 2012 2012 2012 Quarter Q3 Q4 Q1 Q2 Q3 Sales 0 10,000 90,000 45,000 240,000 COGS 0 0 0 0 0 Payroll 251,412 356,507 443,113 483,188 483,188 Prof. Services 159,972 174,271 136,500 86,500 88,000 Travel & Ent 42,081 60,844 27,900 47,900 27,900 Facilities 22,789 16,289 15,900 37,250 32,250 Equip & Furniture 29,021 12,856 9,000 9,000 9,000 Office Exps 4,192 9,511 4,650 4,650 4,650 Sales & Mktg 54,973 125,343 125,000 105,000 209,000 Taxes 0 0 2,400 3,600 3,600 Total Expenses 564,441 755,621 764,463 777,088 857,588 Other Cash Inc/Use -57,741 -24,811 0 0 0 Equip purchases 47,631 24,974 0 0 0 Cash Burn -554,332 -745,784 -674,463 -732,088 -617,588 Beg cash 4,331,670 3,777,338 3,031,554 2,357,091 1,625,004 Ending Cash 3,777,338 3,031,554 2,357,091 1,625,004 1,007,416
  10. 10. Financial Models
  11. 11. Financial Models
  12. 12. Financial Models = How you think about your business = Metrics Driven = As Important as your product. Really.
  13. 13. Business Models Direct / Channel Pricing Partnership Leverage Sales Cycles Cost of Sales / Cost of Customer Acquisition Hiring
  14. 14. Business Models OLD - High priced sales guys - Big expense accounts - 9 month sales cycles - Quarterly rhythms - Fortune 500 NEW - Inside sales guys - No travel - Free download - Weekly/Monthly rhythms - Midmarket
  15. 15. High Velocity Bus. Models First, a few caveats….
  16. 16. High Velocity Bus. Models (At the time a $15M runrate company) No sales people $80K in keyword spend  500 warm leads 8 inside sales people, round robin 2 account managers 1 hands on VP Sales http://www.five9.com//
  17. 17. High Velocity Bus. Models (At the time a $15M runrate company) The Numbers Sales Cycle 45 days New Deals per month 45 Deals per rep per month 6.5 ACV per deal 16K (average) ACV quota per rep per year 1.2M (100k per month) Target 8% conversion to sales Rough efficiency model = 80K ad spend plus 80K salary spend yields 1M in ACV per month.
  18. 18. High Velocity Bus. Models (At the time a $15M runrate company) Sales Process…eight step methodology Step 1 (10%) – lead is qualified (interest, project has requirements, timing is <6 months) If a rep doesn’t act on a lead in two hours it is sent to another rep. Step 2 (25%) – product identified, value estimated, pricing discussed, discovery process, demo scheduled Step 3 (50%) – demo completed (prerecorded, webinar or 1:1), tech requirement reviewed, decision maker identified Step 4 (60%) – trial in progress, SE engaged, verified requirements Step 5 (75%) – selected as vendor, pricing sent Step 6 (90%) – awaiting signed paperwork, verbal commit Step 7 (95%) – received paperwork, submitted to finance for review Step 8 (100%) – received payment
  19. 19. High Velocity Bus. Models (At the time a $15M runrate company) METRICS tracked (by rep by week): Activities (moving people through process) Total call volume Ave Daily Calls High Quality Leads Demos driven (broken out prerecorded, webinar, 1:1) New trials Net new deals Net new large accounts Seats MRR
  20. 20. IPO’s to study
  21. 21. Secret Weapons Content: blogs, SEO, SEM Product: flow built in Tools: automated **Most founders are engineers, this is your blind spot, get educated
  22. 22. Lars Leckie, Managing Director lars@humwin.com

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