Fresh Insights

Analyses, Musings & Observations

SaaS and Tech CEO salary data

There is no dataset explicitly outlining salary levels at early stage companies, but we can see salaries from tech companies prior to IPO. The data below shows the salaries of 162 tech company CEO’s at IPO. A few observations stand out:   Some of the best CEO’s take the lowest salaries. For instance, Marc Benioff…
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Learnings selling SaaS to SMB

Fresh Works just filed their prospectus (S1) to go public. Below we summarize the major points which we found interesting for running your SMB focused business. Fresh Works is large and growing, and unprofitable. “total revenue was $172.4 million and $249.7 million in the years ended December 31, 2019 and 2020, respectively, representing a year-over-year…
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Non-recurring revenue in SaaS

While the value of any SaaS business is derived from recurring revenue (ARR), do not forsake non-recurring revenue streams. If you do, you’re ignoring free financing and a way to make the product stickier. Non-recurring revenue streams like onboarding fees and installation fees are a fantastic source of cash. Other non-recurring revenue streams such as…
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Allbirds and Warby Parker’s IPO

Allbirds is about to go public. Their S1 is out (prospectus) and below are some of the key insights on their business. There is a lot to learn from Allbirds about omni-channel and ecommerce sales. Later in this blog, we show insights from Warby Parker’s prospectus. AllBirds insights from prospectus There are 27 stores of…
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negotiating with your VC – part 2

Below is a continuation of a recent blog post about a book called Never Split the Difference by Chris Voss. Chris was one of the premiere FBI Hostage Negotiators in the world, and his tactics could be useful for negotiating with customers, vendors, and of course your VC. The original blog we wrote highlighted some…
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Negotiating against your VC

I just read a book called Never Split the Difference by Chris Voss. Chris was one of the premiere FBI Hostage Negotiators in the world, and his tactics could be useful for negotiating with customers, vendors, and of course your VC. Excerpts from the book are below.   Create warmth by using first names. “I’m…
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Doing omni-channel like Warby Parker

Warby Parker is about to go public via a direct listing. Their S1 is out (prospectus) and below are some of the key insights on their business. The business is very impressive, and there is a lot to learn from Warby about omni-channel and ecommerce sales. It’s been an 11 year journey. “When we launched…
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R&D spend should be 24% of SaaS revenue

Building out, maintaining, and upgrading a technology stack requires a constant commitment to developers and engineers. What is an appropriate level of development or R&D expense for a successful SaaS business? We looked at the last 126 SaaS IPOs at the time of IPO to get a sense for how successful SaaS businesses allocate to…
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Strategic investors don’t matter

Strategic investors, defined as corporations that make venture investments, can be a valuable source of capital but are they critical? No. We dug through the filings of 178 tech companies and found that only 29 of them had a strategic investor (18%).   Some industries have more prevalence of strategic investment than others. For instance,…
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178 Founders’ ownership at exit

The list below shows founder or CEO ownership of 178 tech companies at IPO. The median level of founder ownership shown is 15% while the average is 20%. A few things to consider: The range is wide. Snapchat cofounders Evan Spiegel and Robert Murphy owned a combined 44% of Snapchat before it went public. Mark Zuckerberg…
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