Fresh Insights

Analyses, Musings & Observations

Getting to IPO takes 4 to 9 years

How many rounds has it historically taken tech companies to go public? Based on the data from 125 IPO’s, the answer varies depending on industry. The data and observations are below. Software businesses need 4 rounds. On median, publicly traded software companies raised through their Series D before going public. The median software company raised $113mm…
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The data says you’ll exit inside of 10 years

How many years will it take you to exit? 10 years is the generic answer, but that’s wrong. The data says depending on what industry you’re in, it might take as long as 11 years (hardware) or as few as 4 years (payments). We looked at 126 tech companies in various industries that have IPO’d…
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How to hire B2B sales reps

Recently I read “Hire Right, Higher Profits” by Lee Salz which focuses primarily on enterprise sales rep hiring. Below are some of the key points of the book along with my commentary. Failure in B2B sales hiring is high. “the attrition rate among B2B salespeople hovers around 25 percent, while nearly 50 percent of salespeople don’t…
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The Series A Report

During the month of May, we had conversations with 45 companies about leading or following their Series A rounds. Below is aggregate data on these 45 raises — figures like revenue, valuation, and round size are medians from the conversations. The valuations and revenue multiples presented aren’t necessarily what the founders got, but rather it’s…
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Raise more money than you need

Venture is in a bubble, and inevitably, that bubble will pop. As a founder, what should you do? Well, you could do what Peter Thiel did while he was at Paypal: he raised more money than he needed. Recall Thiel was one of the founders of PayPal in 1998. PayPal went on to list on…
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Consumer tech valuations are rising

We follow 58 publicly traded internet companies in different industries including social media, marketplaces, content distribution, gaming, ecommerce, payments, and new hardware. The one thing these companies all have in common is that consumers are a customer/critical constituent in the business model. Given the diversity of industries, the multiples vary. Below is the data along…
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SaaS valuations are getting crazier

Valuations for SaaS are higher than they’ve ever been since we started keeping track of the data in Q4 2014: of the 77 SaaS companies we follow, the average public SaaS business is trading at 10.07x revenue while the median is 9.32x. The data is below. Negative EBITDA, positive cash flow. The median SaaS business had…
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When you hate your VC

This happens. Occasionally you and your investors/VC won’t see eye to eye, or worse yet, you’re sideways with your VC and the relationship is acrimonious or hostile. While I’ve never had a hostile relationship with a founder, certainly there are times where we’ve been in disagreement on major issues or a founder isn’t happy with…
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Founder ownership compounds with cash efficiency

There’s a compelling reason to keep burn down and be cash efficient: it limits founder dilution. The less money you raise, the less dilution founders absorb, but what many founders don’t realize is that the relationship is not linear. In other words, being cash efficient has a compounding effect on limiting founder dilution: in a…
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Layoffs done right at a startup

Many young company goes through it: at some point you may have to lay off a chunk of your team to reduce burn. Group layoffs at a startup are particularly challenging because the team is presumably small (less than 30 people), everyone works in the same office, and since group layoffs are generally not performance…
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