How to Raise Extra Capital From Existing Investors Right Now; Plus Weekly SaaS News and Updates

Hey SaaStr Community,

There’s a lot of panic from VCs now.  The markets, at least for now, for SaaS and Cloud stocks have fallen dramatically from their post-Covid peaks.  Many aggressive late stage funds like Tiger and Softbank are, for now at least, sitting on massive losses.  And no one knows when revenue multiples, now at multi-year lows, will rebound — if at all.

So fundraising is harder now.  It has to be.

But there's a group of you who will be very attractive investments to their existing investors — especially if you keep it simple, and just raise a little more capital at the last round price.

If Your Numbers Are Good — Now Might Be a Great Time to Raise a Little Extra Capital From Your Existing Investors

So we took a look at RingCentral early in this series at $1B in ARR.  RingCentral is a very interesting case study in SaaS of starting very SMB, way in the early days of SaaS in 1999, keeping at it … and then tilting upmarket to going much more enterprise post-IPO.

Fast forward to today, they are 27% SMB and 63% Mid-Market and Enterprise at $2B in ARR growing 33%.  And the real growth is all in bigger deals.

This edition of the SaaStr weekly is sponsored in part by DuploCloud

I remember about 24 months back, I asked one of the very best VPs of Sales I know to help me find a VP of Customer Success.  This VP of Sales has built legendary teams, and his Directors and Managers have gone on to run many of the top SaaS companies out there.

And he said to me, “You know, I don’t really know that much about Customer Success.”

I didn’t totally get it at the time.

This edition of the SaaStr weekly is sponsored in part by Reachdesk

You can certainly start with a few small checks — to learn.  As long as they are experiments, to learn, and you are OK losing it all.

But you probably need at least $2,500,000 liquid to do it right. $10,000,000 to do it well.

From a remote-first company founded in 2005 to a $7B valuation in 2022, 1Password grew for 14 years through word-of-mouth marketing and a core focus on its customers. Today the company has grown to over 600 employees, serves over 100,000 businesses, and counts individual customers in the millions.

The processes have changed and the teams have grown, but the core focus on customers remains. CEO Jeff Shiner and Board Advisor Carilu Dietrich will dive into the seven most meaningful tactics that have brought 1Password to this stage.

• SaaStr is seeking new team members! We're hiring in Sales, Marketing, Event Content, and Customer Success. If you're ready to help us grow the SaaStr community, see all the opportunities!

• Carta is looking for a Marketing Operations Associate. In this vital GTM role, you’ll own and manage all foundational marketing and customer data, including governance, enablement and processes and related technologies. 

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Secrets to Building a High-Performing Revenue Marketing Engine with Demandbase VP of Marketing Tracy Kraft

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7 Drivers in Building to a $7 Billion Company with 1Password CEO Jeff Shiner and 1Password Advisor Carilu Dietrich

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Where Venture Is Right Now with Iconiq GP Doug Pepper and SaaStr Founder Jason Lemkin

Listen on Apple Podcast, Google Podcasts or Spotify

For most seed investors, including myself, we still want to do the same # of deals this year as the last year, and every other year

It's just, the types of deals may be a bit different

#1 change: who will do the Series A, when, why and how

How about this:

Invest in capital-efficient startups, with prudent CEOs and good early indicators of success

Offer a fair and market-correct price

And ignore the rest

Like, whatever

The real reason seed investing isn't slowing down much is because it's not that complicated

There are still great companies being created weekly

You invest in them

Valuations fluctuate, but are roughly consistent

The other stages of VC investing are much more complicated

% of Free edition SMB users that convert to paid:

1%-5%, typically

% of Free Pilot “customers” in Enterprise that pay nothing, that then magically convert to paid at end of pilot:

0.00000000001%

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