There is no dataset explicitly outlining salary levels at early stage companies, but we can see salaries from tech companies prior to IPO. The data below shows the salaries of 196 tech company CEO’s at IPO. A few observations stand out: Some of the best CEO’s take the lowest salaries. For instance, Marc Benioff of…
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While the value of any SaaS business is derived from recurring revenue (ARR), 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. Other non-recurring revenue streams such as…
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Building out, maintaining, and upgrading a technology stack requires a constant commitment to developers and engineers. What is an appropriate level of development or R&D expense for a successful SaaS business? We looked at 141 SaaS IPOs at the time of IPO to get a sense for how successful SaaS businesses allocate to R&D. The…
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Allbirds and Warby Parker are public, and their prospectuses teach a lot about omni-channel and ecommerce sales. Key learnings from each are summarized below. AllBirds insights from prospectus There are 27 stores of which 12 are outside the US. You have to have a brick and mortar strategy. “In 2020, our digital channel represented 89%…
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We met with a SaaS business that in our view is operating using best practices. Below some of my notes which you may find helpful for your own SaaS business. Customer Success. At this company, customer success reps are specialized by industry so that they can speak the customer’s language and develop some real…
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At the end of every quarter, we publish SaaS multiples of publicly traded SaaS companies. It’s very important data since public market valuations do drive those in private markets. We’ve never published the data during a quarter, but the correction in SaaS multiples has been especially rapid. Below are the latest SaaS multiples as of…
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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 198 tech companies and found that only 31 of them had a strategic investor (16%). The list is below. Some industries have more prevalence of strategic investment than…
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The list below shows founder or CEO ownership of 198 tech companies at IPO. The median level of founder ownership shown is 15% while the average is 20%. A few things to consider: The range is wide. Snapchat cofounders Evan Spiegel and Robert Murphy owned a combined 44% of Snapchat before it went public. Mark…
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The founders of Jfrog owned 24% of the business at IPO. Viant’s founders owned 93% and Datto’s founder owned 15%. Braze’s founders owned only 4% combined. The range of founder ownership at exit/IPO can be quite wide and is dependent on any number of factors, including the ability to command high valuations during fundraising and…
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When tech companies exit by going public, how much of the company is owned by venture investors at that point? We looked at 198 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 53% and on average 52% of…
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