Fresh Insights

Analyses, Musings & Observations

What big funds look for in a CEO

Recently, we got a hold of an investor letter from one of New York’s finest late stage venture funds.  The letter shared insights into what the fund looks for in a management team, which resonated with us.  Below we share these points, verbatim.   We like CEOs that are patient with us and believe that…
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Building an online brand

“By Invitation Only” is the story of Gilt Groupe.  While Gilt may not have been a great outcome for some investors (it ultimately exited for $250mm but was at one time a unicorn), it was still a great outcome for the founders and there is no denying they built a truly unique and successful brand. …
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Upsells are critical to SaaS growth

Net dollar retention is the most important metric in SaaS.  If you’re over 100%, revenue from upsells is outpacing revenue you’re losing from downgrades and churn.  It means you’re keeping the customer base forever, and your current customers are a major source of growth.  The latter is a wonderful bonus that isn’t well understood and…
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Improve B2B sales hiring

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…
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Raising more capital than needed

If venture funds are begging you to take their money, there is a good argument for raising more capital than you need.  Peter Thiel did just that while he was at Paypal, and it saved his company.      Recall Thiel was one of the founders of PayPal in 1998.  PayPal went on to list…
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Giving stock options to employees

Founders usually treat the option pool like gold, as they should.  Options represent the stock of a company and if you think that stock has real value, generally the thinking is you shouldn’t hand it out like candy.  An article in Business Insider highlighted one CEO that bucked that trend: the CEO and founder of…
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Layoffs 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 small (less than 30 people), everyone works in the same office, and the impact to the culture can be dramatic. …
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The story of a successful SaaS exit

We recently had the chance to catch up with Chris Wood, one of the founders of Clario Medical Imaging, about his successful exit to Intelerad.  Clario Medical Imaging is workflow management software for radiologists.  Learnings from Chris’ story are below.   At first, Clario was unsuccessful.  Clario started in 2005.  The company had the license…
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Growing a greenfield market

One of our companies had a sales consultant audit their sales team and methodology.  Our portfolio company’s market has some interesting traits: i) the market is greenfield and almost all homegrown; ii) ‘no decision’ is the company’s primary competitor; and iii) the market as it stands is currently small, but large enterprises are the target…
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SaaS Valuation Report

SaaS multiples are higher than they’ve been since we’ve tracked the data (Q4 2014): of the 73 SaaS companies we follow, the average public SaaS business is trading at 11.69x revenue while the median is 9.08x.  Interestingly, the gap between the average and median has never been larger for the time period shown (2.6x), meaning…
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