Why Later Stage Valuations Have Fallen; Plus Weekly SaaS News and Updates

Hey SaaStr Community,

Fenwick, one of the bigger Silicon Valley / tech law firms put out its quarterly report on the venture market, sourced from 194 deals that actually closed in Q2’22, and I found the way the data was presented super helpful given all the drama in the venture markets, on Twitter, etc.

Don’t get me wrong, it’s a lot tougher out there in venture land than it was in 2021.  Post-seed and Series A rounds are a lot harder to get, crazy valuations, to some extent, have gone on pause, and everything has slowed way down.

But it’s not quite as bad in my experience as it may look on social media. And the data from Fenwick confirms that.

So we took a look at Toast just after it IPO’d.  Times were good then, and Toast was worth $24B.

Fast forward to today. and there’s not much to criticize Toast for.  They dominate a large market, and are growing almost 60% at $800m in ARR!  And yet, the markets are tough today, and Toast is now worth less than $10 Billion, despite executing admirably.  Of course, their margins are lower than a pure software play.

Way back in the early days of Adobe Sign / EchoSign, my co-founder was a digital marketing genius — but was opposed to events.  They don’t work, he’d say.  They take too long to deliver ROI, he’d say.  They’re a distraction, he’d say.

And then, a few months later, he came to me and said we had to get a booth at Dreamforce.

So which was it, I said?  You gotta be at the biggest and best one in each industry, he said.  The exception that makes the rule, in his mind.  And he wasn’t wrong.  It worked out great for us.

Well, as the years have gone by, and I’ve talked to 100+ CMOs and more that have sponsored or partnered with SaaStr, I’ve basically learned there are 3 strategies for industry events.

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

OK we're down the final moments now before SaaStr Annual 2022 officially starts.

We'll be taking over the San Francisco Bay Area, Sept 13-15th at the San Mateo County Events Center.  

7,865 SaaS executives, investors, and professionals are already registered. There will be 10,000 by the time Annual starts.

Book your ticket now before we sell out.

When you are fighting literally for every dollar, this will irk you.  It will get everyone’s dander up.

But as you scale past a few million in ARR, you’ll learn it doesn't matter.

As SaaStr Europa 2022 drew to a close, attendees took one more opportunity to ask Jason questions about topics like how to navigate the current market, the future of work, playing in a crowded space, and hiring your first VP of Sales.

Podcast episode 585 is an excerpt from the AMA, and you'll find the full video and a transcript on the blog.

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

• UserGems is looking for a Senior Product Manager to own the vision, strategy and roadmap for one of our key products. In close collaboration with the leadership team, you'll drive the development of additional features, analyze consumer needs & current market trends and work with engineering teams to deliver with quick time-to-market.

• Outreach is seeking a Senior Event Marketing Manager to be focused on developing innovative in-person and virtual experiences for our customers and prospects, building our brand affinity and impacting pipeline and revenue.

• SaaStr 583: Scaling Faster, Part 2: An AMA with SaaStr Founder & CEO Jason Lemkin
• SaaStr 584: More Than Revenue: Why Choosing Your First Customers Matters More Than You Think with Pigment Co-Founder & Co-CEO Eléonore Crespo
• SaaStr 585: The Answers to Scaling, Hiring, and Everything Else: A SaaStr Europa AMA with SaaStr CEO Jason Lemkin

Listen on Apple Podcast, Google Podcasts or Spotify

The March 2020 downturn in tech lasted about 60 days or so

The March 2022 downturn in tech lasted a bit longer, but in the end, not that much longer

The #1 mistake I see founders make when they hire their first VP of Sales …

Is that the founder stops doing much sales themselves.

It doesn’t work that way.

Sales almost always goes down as a result.

Oftentimes, dramatically so.

A "woe is me" spiral is a tough one for founders to pull themselves out of

One of the top benefits of having a truly great co-founder

They pull you out

Some startups I funded on a cold email:

Talkdesk, worth $10B Today

Algolia, worth $2.25B Today

Salesloft, Vista at $2.3B

Pipedrive, acquired for $1.5B

Look, worry less and just send the email, folks

© SaaStr 2022

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