Fresh Insights

Analyses, Musings & Observations

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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Advice from a SaaS investment banker

Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Email him directly at sammy@blossomstreetventures.com, especially founders. Recently an investment banker named Tom Metz was kind of enough to share his book with me entitled “Perfect Your Exit Strategy”. It’s about going through an exit with an investment banker. Below are direct quotes I…
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Acceptable level of SaaS cash burn

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. Most SaaS companies burn cash as they grow, but what is the acceptable level of burn? We looked at the last 41 SaaS IPOs to find out. The data is below…
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The most successful VC in SaaS

Who are the most successful VC in SaaS? To answer that question, we looked at the past 41 SaaS IPOs and who their major investors were. The list is below.   The best. Not surprisingly, Sequoia and Accel top the list with 6 each. August, NEA, and TPG have 3 each. Lots of 2’s. Ten…
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SaaS founders owned 14% at IPO

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. The founders of Jfrog owned 24% of the business at IPO. Viant’s founders owned 93% and Datto’s founder owned 15%. The range of founder ownership at exit/IPO can be quite wide…
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Startup Learnings from legendary founders

Sammy is the Managing Director and Cofounder of Blossom Street Ventures.  Email him directly at sammy@blossomstreetventures.com, especially founders.   The book ‘Founders at Work’ interviews well known tech founders about their earliest days.  It’s well worth the full read, but below I summarized portions that really stood out to me.   Introduction   “Perseverance is…
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