9 Learnings from 10 Years of SaaS Investing
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The document provides nine key learnings from 10 years of investing in SaaS companies. The learnings include: creating an effective fundraising deck; understanding that achieving product-market fit can be long and bumpy; charging enterprise customers more for premium plans; not assuming paid marketing will scale; hiring a VP of sales at the appropriate stage; rebuilding products is difficult but necessary; understanding the metrics needed to reach $100M in annual recurring revenue; aligning customer acquisition costs with lifetime value; and that most venture capital is invested in companies pursuing $100M+ valuations.
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9 Learnings from 10 Years of SaaS Investing
- 6. www.theangelvc.net @chrija 9 Learnings from 10 Years of SaaS Investing
- 8. www.theangelvc.net @chrija You get a Term Sheet nobody wants to invest everybody wants to invest Time Investor interest
- 9. www.theangelvc.net @chrija Learning #1 Create a killer deck Be on top of your KPIs Run a process
- 11. www.theangelvc.net @chrija Time PMF How you get to PMF How it’s probably gonna look like think you’ll Getting to PMF
- 12. www.theangelvc.net @chrija Learning #2 The road to PMF can be long and bumpy. Don’t try to scale before you have PMF.
- 14. www.theangelvc.net @chrija SMB vs. Enterprise Pricing How you should be pricing SMBs Enterprises Your pricing Price SMBs Enterprises
- 15. www.theangelvc.net @chrija Learning #3 Ask enterprise customers for more $$$. Increase the spread between your entry plan and your higher tiers.
- 16. www.theangelvc.net @chrija 4. Scaling paid acquisition
- 17. www.theangelvc.net @chrija Scaling paid marketing Marketing spend CACs Your projections Your actuals
- 18. www.theangelvc.net @chrija Learning #4 Don’t assume that PPC will scale. Invest in product and content. NPS matters. If ARPA big enough, try outbound sales.
- 19. www.theangelvc.net @chrija 5. Hiring a VP of Sales
- 20. www.theangelvc.net @chrija „The 48 Types of VP Sales“ YOU
- 21. www.theangelvc.net @chrija Learning #5 Your 1st VP of Sales is probably you. Then, find one who can get you to $10-20M ARR. Always hire for the right stage.
- 23. www.theangelvc.net @chrija Rebuilding your product How long you estimate it will take How long it will actually take 0 1 2 3 4 5 0 2 4 6 8 10
- 24. www.theangelvc.net @chrija Learning #6 Fixing your racing car while driving 200 mph is hard … but you can’t afford to take a break.
- 25. www.theangelvc.net @chrija 7. Getting to $100M in ARR
- 26. www.theangelvc.net @chrija Which animal are you hunting? ARPA (in $ per year) # of customers (in 1,000s) 10 100 1,000 10,000 100,000 10 1 100 1,000 10,000
- 27. www.theangelvc.net @chrija Learning #7 Know what animal(s) you’re hunting. Align your CACs (and CoGS!) with your ARPA.
- 30. www.theangelvc.net @chrija Learning #8 Align your CACs with your ARPA. (yeah, sorry, I said this already, but this is important)
- 32. www.theangelvc.net @chrija Power Law Company rank Return How you think What it really looks like 301 15 Power Law looks like
- 33. www.theangelvc.net @chrija Learning #9 VCs only invest in companies with homerun potential. If you’re not trying to build a $100M+ ARR company, don’t try to raise VC.
- 34. www.theangelvc.net @chrija Thank you! More SaaS learnings: www.saaslearnings.com www.theangelvc.net Questions? christoph@pointnine.vc
- 36. www.theangelvc.net @chrija Should I go through an accelerator? Is it YC? YES No Go for it! Do they want > 6%? YES RUN AWAY!!! No Think about it
- 37. www.theangelvc.net @chrija Finding good engineers engineers looking for a new job open positions
- 38. www.theangelvc.net @chrija Contracts Number of pages % of pages with a >0 chance of ever becoming relevant. 100% 0% 50% 1 200100 Legal fees ¤5k ¤100k
- 39. www.theangelvc.net @chrija When corporates discover „entrepreneurship“ We need more innovation! Let’s start a Corporate VC. Let’s spin.-off the VC. oops, we’re not attracting the best and the brightest. Let’s start an incubator. Let’s do an „intrapreneur program“ oops, we’re not attracting the best and the brightest. oops, we’re not attracting the best and the brightest.