VCs and The Three Types of Struggling Startups; Plus Weekly SaaS News and Updates

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Hey SaaStr Community,

So there is a lot of triage going on in VC land these days. VCs have to figure out where to put their money, and their time, when the public markets are still down 50% from their peaks and late stage, follow-on capital has almost evaporated.

VCs and The Three Types of Struggling Startups

So, even more than usual, VCs have to decide what to do with their struggling startups. I don’t mean the ones 100% failing. Those are just written off, both financially and mentally.

No, I mean the ones whose growth perhaps has radically slowed, or still hasn’t quite taken off.

HOW VCS TRIAGE STRUGGLING COMPANIES

5 Interesting Learnings from PagerDuty at $360,000,000 in ARR

Post-IPO, PagerDuty became a fascinating case study of a SaaS company that IPO’d and crossed $125m ARR being very SMB-focused, but then later became very enterprise-focused. At $250m, enterprise was the big push. And now, at $360m ARR, it’s the core. Big customers, buying more and more, is the fuel for PagerDuty’s growth today.

And because of it, it’s been able to maintain consistent 33%-34% growth for quarter after quarter. In fact, growth has accelerated as they’ve gone upmarket. At $250m in ARR, they were growing 28%. Today, they’re growing 34% a year. While that’s off the torrid 49% a year pace at IPO, it’s pretty darn impressive to go from 28% growth at $250m ARR to 34% at $360m in ARR.

THE LEARNINGS

Firing the Whole Revenue Team Doesn’t Usually Work

I remember the first time I saw a CEO fire their entire revenue team.

I’d invested in a PLG-first company that was transitioning at millions in revenue to being more sales-led. And the VPs of Sales and Marketing were … well … pretty good. But not great.

But a VC on the board was convinced they could do even better. And after these endless criticisms and complaints, the CEO fired both the VP of Sales and Marketing — at the same time.

And the go-to-market motions … well, they just stopped. The company hit a wall on revenue growth.

WHAT TO DO INSTEAD

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

saastr annual 2022 l sept 13-15 2022 l san mateo county events center

Only 2 Days Now til SaaStr Annual 2022: Sept 13-15

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.

BOOK YOUR TICKETS TODAY

Q&A: What Do VCs Offer Besides Money?

Many VCs, in the end, only offer money and advice you often don’t need (which can be worse than no advice at all).

But here's what the VCs most valuable to me did.

THE ANSWER

Navigating the Rocky Road from Founder-Led Sales to The First Dozen Sales Professionals with Demodesk CEO Veronika Riederle and VP Revenue Lauren Wright

How do you build a sales organization from scratch? How do you go from $0 to $1M ARR and beyond? What about moving from founder-led sales to building a sales team and scaling your revenue growth?

Demodesk’s CEO, Veronika Riederle, and VP of Revenue, Lauren Wright, answer the most pertinent questions on scaling a SaaS start-up as they take us through lessons learned from the three stages of growth.

WATCH NOW

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

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