Fresh Insights

Analyses, Musings & Observations

VC will own 53% at exit

How much of your company will VC own at the time you exit? We looked at the level of VC ownership of 160 tech companies at the time they went public to answer that question. The median and average level of VC ownership at exit was 53% and 51% respectively. By the time of exit,…
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Strategic investors dont matter in tech

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 160 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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Consumer tech multiples here for Q2

Below are revenue multiples for publicly traded consumer tech companies we follow (B2C). Industries and therefore multiples vary widely. Commentary is below. If you’re looking for data on SaaS multiples, check out our post from last week.   Social media came down to 15.6x. Multiples rose steadily through 2020 peaking at 22.7x on median in…
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An easy way to improve net dollar retention

Maintaining net dollar retention over 100% is critical to the health of your SaaS business and getting a premium valuation. One easy hack to improve NDR is to include automatic price escalators in your annual contracts with customers. Our portfolio companies do this, and the automatic price increase upon renewal is anywhere from 5% to…
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How to cold email a VC

Most VC hate cold emails from entrepreneurs. Reasons vary: i) cold pitches are often poorly prepared; ii) skeptical VC will say to themselves “why couldn’t you find a warm relationship to fund this” or “why am I seeing this and not someone else;” iii) some VC insist that you actually go out and find a…
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SaaS multiples for Q2

Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Connect on LinkedIn or email him directly at sammy@blossomstreetventures.com, especially founders at all stages. SaaS comps continue to be strong. Of the 102SaaS companies we follow, the average public SaaS business is trading at 17.6x revenue while the median is 12.7x. The gap between the…
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SaaS sales team structuring

Sammy is the Managing Director and Cofounder of Blossom Street Ventures.  Connect on LinkedIn or email him directly at sammy@blossomstreetventures.com, especially founders.   I just finished reading Strategies That Win Sales by Mark Marone & Seleste Lunsford.  It’s worth a deeper read, and below are some of our favorite excerpts.   Support depends on complexity. …
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Autopsy of a dead venture backed company

Sammy is the Managing Director and Cofounder of Blossom Street Ventures.  Connect on LinkedIn or email him directly at sammy@blossomstreetventures.com, especially founders.   In 2017 we had our first zero at Blossom Street Ventures.  I’ll withhold the name of the company, but I do want to share key learnings from that experience. Below is an…
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SaaS cash efficiency needed to exit

Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Connect on LinkedIn or email him directly at sammy@blossomstreetventures.com, especially founders. Cash efficiency is one of the most important metrics in SaaS. Since the revenue at SaaS companies is largely recurring, we measure it as ARR / net investment. Formulaically it’s revenue / [equity…
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SaaS margins are terrible

Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Email him directly at sammy@blossomstreetventures.com, especially founders. It’s common to hear “SaaS has great margins,” but that’s not true. The margins in SaaS are terrible as the data below show. The table has 42 publicly traded SaaS companies with median revenue of $180mm meaning they’re…
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