10 Hacks to Have Happier Investors; Plus Weekly SaaS News and Updates

Hey SaaStr Community,

We’ve crossed over 10,000 posts, podcasts, sessions, braindates, and answers on SaaStr, and we held off for a long time on writing on most other VC tropes.  But I thought it might, in these times when valuations have taken a hit, and VC is under stress, to update our “Top 10” list of things that are relatively easy to do, now, that will make your investors and board happier.

Even if your investors never help … or even if they are driving you nuts … your life will still be better and easier if they are happier.

So Cloudflare is that quiet Cloud leader that just keeps … killing it.  We last checked in on them at $500m in ARR, growing 50%.

Today, they are at just about $1B in ARR … and growing even faster at 54% year-over-year than they were at $500m in ARR!  Wow.

And while everyone has taken a hit in public market valuations, Cloudflare has outperformed.  Its stock roared up 27% after its last earnings release.

Today is the Best of Times for Cloudflare.  No downturn, no slow down.  Even with some sales cycles indeed getting a bit more challenging, especially for deals in the $500k-$1m range.

So, in many ways, we use SaaStr itself as sort of a lab to try sales and marketing experiments.  I have my own experience as a SaaS CEO to draw on, for a product now doing hundreds of millions in ARR a year.  And I have the experience of investing in 5 SaaS unicorns and decacorns.  But you need to keep it fresh.

Running SaaStr itself definitely helps.  We have a world-class sales team now that does $20m a year, with just 6 sales execs, so I’ve learned a lot about efficiency there.

And one experiment we finally ran this past year was to drop our smallest customers.  It’s something at SaaStr I generally strongly recommend against.

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

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.  

10,000 SaaS executives, investors, and professionals are set to join us for 3 days of epic content, networking, evening events and so much more. 

This is your last chance. Book your ticket now before we sell out.

What can happen sometimes in SaaS is, you are close to a product the market really wants, close, but not quite there. But how long do you wait to know for sure?

As a founder, there are different ways you can set your start-up apart from other companies at the venture and growth stages. Investors look for specific metrics to see whether you stand out from the crowd, ranging from your market expansion potential to your product vision and product-market fit.

Atomico Partner, Irina Haivas, and Principal, Hillary Ball, explore what investors are looking for from the early stage through growth.

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

• Stax is looking for a VP of Marketing, Stax Connect to oversee all marketing efforts for Stax Connect, leading short term and long term strategy and creating scalable processes that drive continued growth.

• Drift is seeking a Sales Development Representative (SDR) to use a combination of phone, email, video, social media and Drift to help build our sales pipeline by connecting with prospective customers, understanding their unique needs, and identifying the best way to position Drift.

• SaaStr 585: The Answers to Scaling, Hiring, and Everything Else: A SaaStr Europa AMA with SaaStr CEO Jason Lemkin
• SaaStr 586: Scaling From $10M-$100M ARR: The Good, The Bad and The Ugly with Showpad Co-Founder Pieterjan Bouten
• SaaStr 587: The 7 Tips to Setting Yourself Apart During the Venture and Growth Stages with Atomico Partner Irina Haivas and Principal Hillary Ball

Listen on Apple Podcast, Google Podcasts or Spotify

PagerDuty:

* $360m ARR

* Growing 33%-34% quarter after quarter

* Clear path profitability

* No deceleration

* Strong NDR of 124%

And yet ... a $2 Billion market cap

Everything is still going pretty darn well in SaaS.

Except valuations

Valuations are brutal these days, folks

The truth is, the stress load goes way, way up when you raise much more than $10m or so in VC capital

The stakes just go up from there, and they should

Once raise $10m, you’re committing to exiting for $100m+

Once raise $30m+, you’re committing to exiting for close to billion

When I founded my first start-up,

* I had to sign a full recourse note to my VCs for $750,000 to get a tiny bridge

* We had to sell 60% of the company in the first round

* I had to agree to step down as CEO whenever they wanted

Man, let me tell you, it’s easier these days

VCs are well paid by any standard

However, only a small handful get truly, truly rich

And they’re running a specific playbook:

High ownership in decacorns.

Multiple decacorns.

© SaaStr 2022

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