Fresh Insights

Analyses, Musings & Observations

VC ownership at exit is ~50%

When tech companies exit by going public, how much of the company is owned by venture investors at that point? We looked at 178 tech IPO’s to find out. The data is below.   Our big take-aways are below. Venture owns ~50%. Venture and other major investors own on median 54% and on average 51%…
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Cash efficiency and ROI in SaaS

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 + debt — cash]. We did an analysis looking at cash efficiency of the 58 most recent publicly traded SaaS companies at the time…
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AE and SDR compensation

If you’re hiring AE’s and SDR’s for your SaaS co, CompGauge.com puts out very nice data on average compensation for these roles. Below we summarize the latest data. AE’s. The average AE is pulling $167k all-in with salary, commission, signing bonus, and stock in the following proportions: 50%, 46%, 4%. The 95th percentile of AE’s…
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The capital it takes to SaaS IPO

We looked at the equity and debt raised as well as remaining cash of the past 58 SaaS IPOs to determine how much net capital it took them to get to IPO. According to that data, it takes $328mm on median and $600mm on average. The average is skewed by Mcafee, Palantir, Snowflake, Dynatrace, Powerschool,…
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Fundraising rounds to tech IPO

How many rounds has it taken the latest crop of tech companies to go public? Below is the data from the last 40 IPOs.   Software. On median, publicly traded software companies raised through their Series E before going public. Note that Palantir went all the way through their Series K. Other companies like Datto…
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Tech profitability matters again

AirBnB, Uber, and Lyft have one ominous thing in common: when they went public, they burned a lot of cash (and still do). Similarly when WeWork tried to do it’s IPO, the company was so unprofitable the IPO couldn’t launch and the company had to restructure. It seems however that the desire for profitability is…
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Growing your SaaS cohorts

Before we get into the meat of this post, first, a quick refresher: a cohort is a group of customers acquired at a particular time; for instance the “January 2018” cohort would be those customers who were acquired in January 2018. One very important measure in SaaS is cohort growth. Often times this is depicted…
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B2C metrics of 8 public co’s

The most important metrics for B2C companies are customer acquisition cost or “CAC” and life time-value or “LTV”. The first measures the cost of acquiring the customer while the second measures the profits of the customer over their life with you. We found a few B2C public companies that disclose their metrics, and you should…
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Ask for 3 year contracts in SaaS

Ask for 3 year contracts in SaaS If you’re a SaaS business selling to enterprise, chances are good you’re selling 1 year contracts, paid up front, with auto-renewal subject to a 60 day out and automatic annual price escalators. That’s a fine, traditional contract structure in SaaS, but more and more we’re seeing companies open with…
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What SaaS upselling looks like

What SaaS upselling looks like One of the key drivers of SaaS growth should always be to upsell existing customers with new features/products and greater value-add. Blend, which just went public, illustrates this well in their S1. Their software drives transaction and loan volumes for banks, and they ended 2020 with $96mm of revenue, up from…
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