Fresh Insights

Analyses, Musings & Observations

Why you shouldn’t build a relationship with VC

Building a relationship with VC and speaking to VC when you’re not fundraising doesn’t make much sense, isn’t a good use of your time, and may actually be detrimental to your business.  Here is why:   You have better things to do.  We love founders that are so busy building the business, they’d prefer to…
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How long will your exit take

We looked at how long it took 128 publicly traded tech companies to exit.  Specifically, we used their S1’s – a securities filing a company makes before IPO – to find out the year each company was founded and compared it to the last year financials were released as a private company.  The data is…
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The real role of a CEO

We’ve invested in 19 companies since our founding and we’ve seen some CEO’s use their time much better than others.  In our view, below are the tasks a CEO should prioritize.  After that we’ll share some of the things we see CEO’s do that aren’t a good use of their time.   Partnerships.  One of…
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CEO salaries

We’ve seen a wide range of CEO salaries in our portfolio, from as low as $35k annually to as much as $325k (plus bonus).  While there is no dataset explicitly outlining salary levels at early stage companies, we can use the salaries from tech companies at their IPO to get a sense for what the…
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Non-recurring revenue is important

VC love recurring revenue and many VC won’t ascribe any value to non-recurring revenue streams.  That said, 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, which means…
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Sales Hack: remove steps & friction

How many clicks does it take someone to actually purchase your product? How many steps are between your customers’ dollars and your product? Do everything you can to make the purchasing process as frictionless as possible, because extra steps and friction are costing you sales.   While that seems obvious and intuitive, in practice companies…
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Profitability not required

I cringe writing that title because we’re sticklers for cash efficiency and achieving cash break even. However, we looked at 100 tech companies at IPO and determined 75 of them were not profitable (75%) and 61 were not generating positive cash flow (65%).  The data and additional observations are below.     Ecommerce, Hardware, and…
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SaaS M&A is much harder than you think

We spoke to an investment banker yesterday about his view of the SaaS market.  Some of the learnings he shared where surprising, and a departure from what most bankers and investors will tell you.  Because the conversation was so candid and not a glowing view of SaaS, he’ll remain anonymous for purposes of this article,…
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SaaS may be recession proof

SaaS Capital, a lender to software businesses, put out an excellent research piece which examined the performance of publicly traded SaaS businesses during the recession.  The 3 page research report is well worth the read, and we decided to summarize some of the findings. Below is the data and under that are observations.    …
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Market size determines the IPO

IPO’s are not only an exit, they’re usually also a company’s largest capital raise.  Below we look at the size of 106 tech IPO’s.  The overall takeaway: i) the larger the size of your market, the more money you’re going to raise, especially at IPO; and ii) the year of a tech company’s IPO has…
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