In this presentation, which Louis and I gave at the SaaStr Annual 2018, we're trying to answer the question of what it takes to raise capital, in SaaS, in 2018. The slides may not be completely self-explanatory, but you should be able to get most of it without the "audio".

1. What does it take to raise
capital, in SaaS, in 2018?
Christoph Janz & Louis Coppey
Point Nine Capital

2. Point Nine, in a nutshell
few
s
~ $85M seed fund geo agnostic
SaaS + more

6. + 40 other VCs

7. What we asked Series A/B investors
1 “How much ARR — quite roughly — do you expect a SaaS
company to have when it raises its Series A/B round?”
2 “What kind of y/y ARR growth gets you excited when
you’re considering an investment?”
3 “And what kind of y/y ARR growth do you expect in the
12 months following your investment?”

8. What we asked seed investors
1 “What are the things you are looking for in a SaaS seed
startup?”
(PMF, revenues,…)
2 If revenue got a high rating:
“How much ARR — quite roughly — do you expect a SaaS
company to have when it raises its seed round?”

9. Plus a few optional questions
1 “What are the Top 3 things you’re looking for when you
assess a potential SaaS investment?”
2 “Quite roughly, what was the average pre-money
valuation of the SaaS deals that your firm did in 2017?”
3 “Quite roughly, what was the average round size of the
SaaS deals that your firm did in 2017?”

10. Here’s what they said

11. ARR expectations
ARR expected upon seed, Series A and Series B.
Averages based on answers from 5 seed, 38 Series A and 11 Series B investors.
$0-100k

12. ARR expected upon Series A based on 38 answers.
Average $1.4M, median $1.0M.
ARR expectations – Series A

13. ARR expected upon Series B based on 11 answers.
Average $5.0M, median $5.0M.
ARR expectations – Series B

14. Let’s update the napkin!

15. Y/Y ARR growth expectation on and following Series A, based on 38 responses.
Growth expectation - Series A

16. Y/Y ARR growth expectation on and following Series B, based on 11 responses
Growth expectation - Series B

17. Let’s update the napkin!

18. Pre-money valuations mentioned by seed investors,
based on 9 responses. Average $5.6M, median $6.0M.
Valuations – Seed
Small sample size

19. Pre-money valuations mentioned by Series A investors,
based on 30 responses. Average $19.4M, median $20.0M
Valuations – Series A

20. Pre-money valuations mentioned by Series B investors,
based on 6 responses. Average $68.3M, median $60.0M.
Valuations – Series B
Small sample size

21. Average round sizes mentioned by 9 seed investors,
30 Series A investors and 6 Series B investors
Round sizes

22. Let’s update the napkin!

23. What are the top 3 things investors are looking for?

24. What are the top 3 things investors are looking for?

25. Based on 126 comments from 60 investors.
Count by „theme“

26. Based on 126 comments from 60 investors.
Count by „theme“

27. Let’s take a look at some of
the best comments!

28. What seed investors are looking for - Teams
“ „Some type of specialized domain knowledge that leads
to an unexpected and unconventional insight.
Speed: Time it took to get where they currently are,
time to make decisions.
“ „

29. What seed investors are looking for - Teams
1= not important / 5 = extremely important
Based on 11 participants

30. What Series A investors are looking for - Teams
“ „
We really like conversations where the founder has a deep understanding of
all the competitors (not just surface level trashtalking based on what they can
gather publicly), educated by actual proprietary intel from their networks.
It shows an ability to get information and convince people to be on
their side.
Thought leadership: great understanding of where the market is
going and being able to share this to their clients/the market.
“ „

31. What Series B investors are looking for - Teams
“ „Management that can handle
20x the size of today.
“ „Proven ability to recruit senior
people – hired 1-2 excellent VPs.
(Christoph’s 0.02 BTC)

32. Let’s update the napkin!

33. What seed investors are looking for - Product/Market
“ „Products solving problems which people
have but the market is not yet clear on.
A product that users love.
“ „

34. What Series A investors are looking for - Product/Market
“ „Super positive customer references.
Massive pain point in the market with identifiable
customer that has the wallet to pay for it.
“ „
Consistency in reasons why customers buy.
“ „

35. “ „A compelling ‚why now‘ argument that explains how multiple
trends are converging at a specific point in time to make this
business likely to succeed now (but not in the past).
What Series A investors are looking for - Product/Market

36. What Series B investors are looking for - Product/Market
“ „Customers who preach about the product.
Fat incumbents.
“ „TAM first.
“ „

37. Let’s update the napkin!

38. What Series A investors are looking for - Sales/Marketing
“ „At least one scalable marketing channel.
Evidence of repeatable sales model
(vs founder lead sales).
“ „

39. What Series B investors are looking for - Sales/Marketing
“ „CAC Payback 12 months.
Short Sales Cycles relative to ACV, e.g. 60
day sale cycle for 100K ACV is very nice.
“ „
“ „Net Dollar Retention >100%.

40. Let’s update the napkin!

41. What investors are looking for - Moat
“ „Increasing defensibility as the company grows,
typically leveraging proprietary data.
Competitive moat, ideally via usage-
driven proprietary data.
“ „Using data to generate intelligence
rather than simply managing processes.
“ „

43. Thank you!
Check out www.saasnapkin.com
on February 18, 2018, if you want the napkin.
Or email us to get it earlier:
christoph@pointnine.vc / louis@pointnine.vc
OK, there’s space for one more CTA … follow us on Twitter:
@chrija / @louiscop