Hey everyone -

The biggest SaaS event of the year, SaaStr Annual is coming up this September 6-8. 

Right now we're hosting our Summer of SaaS event, so spin the wheel to reveal your exclusive deal on tickets. 

Join 12,500 Cloud and SaaS Founders, VCs, and Execs. Indoors/ Outdoors, festival style! The 9th SaaStr Annual: 3 full days, 100’s of workshops, and 1000s of Mentoring sessions— all to help you scale faster.

Let’s break it down a bit.

General Partners at VC firms have to:

Raise capital. Yes, VCs themselves have to raise the money they invest. If you are top tier firm, with a long track record, this often can be done easily. If you aren’t though, it can take years. And so this can consume anywhere from 5%-50% of your time.  And these days, it’s harder than ever.

Manage their LPs. 

This doesn’t take a massive amount of time, but it does take time.

VCs have to manage their own investors, the “LPs” or Limited Partners. This includes an Annual Meeting (which can take a lot of prep), quarterly reporting, audits, and more. 

Manage existing investments. This can take a lot of time, especially if you are on a lot of boards. Many VCs end up spending 40%-50% on 15+ boards, and sort of become professional board members. In addition, in some cases VCs spend a material amount of time interviewing executives and others for portfolio companies. And startups that fail often take a fair amount of time and drama to wind down. And then there are founder issues.  All together, this can take 50% of your time or more.

Networking (sourcing) and marketing.  One way or another you have to source deals.  This can be by meeting with earlier-stage investors.  Or frequent co-investors.  Or talking with top angels and CEOs they know.  Or attending demo days.  Or doing marketing — blog posts, digital events, etc. etc.  One way or another, it’s sales.  So you have to find a way to source the best deals.

June 2016: Loom was on its last legs.

With more than one failed launch + fundraising attempt behind them, the co-founders were maxing out credit cards and had about two weeks of runway left before calling it quits.

One idea changed everything: they took a chance on a single piece of their product — the video recorder.

They decoupled it from the broader platform they’d been developing, launched it as a standalone offering on Product Hunt, and saw more signups in one day than the past six months combined.

Today, the company has raised over $203M and counts 20M users in over 230 countries.

Those first months of tumult aren’t the only ups and downs CEO Joe Thomas and his co-founders have encountered in Loom’s journey.

And they’re not alone; today’s tech founders are navigating an increasingly difficult economic climate, shifting expectations from investors + employees, and the need to continue to innovate faster — all with fewer resources.

In this session, Thomas will share some of the lessons he’s learned throughout the past year and beyond, including the need to make agility your superpower. He’ll talk about the need to balance long-term planning with strategic short-term adjustments for when the curveballs come (because they will). 

This edition of the SaaStr Daily is sponsored in part by Infinicept

Learn how to earn more revenue by embedding payments into your solution, without doing it all yourself.

So my LinkedIn feed is full of sales execs complaining how unfair startups are:

• VPs get fired seemingly without cause (it’s never that simple, though. No sane CEO wants to move on from a VP that’s performing).
• Startups not even hitting 40% quota attainment (more common these days, and brutal indeed).
• Layoffs continuing and in some cases accelerating, and going deep enough to really hit some of the best.

Are expectations for VPs of Sales, CROs, and CMOs too high?

Probably.

Is this fair? Perhaps not.

But here’s the thing that I think many miss. VC-backed startups can be an incredible journey. I’ve founded several and invested in 25+, including 6 true unicorns. We’ve done incredible things.

There’s a contract in venture-backed startups, and it’s not an easy one to meet. It’s to do everything humanly possible to achieve hyper-growth.

This isn’t for everybody, and in fact, it isn’t for most. Don’t sign up for this contract and journey if it’s not for you.

You’ll find 90% of the time you’ll want to not just tell a client who you are competing with — but do so aggressively.

And box the competition out at the start.

“Great to learn about your business!  Is there anyone else you are looking at to _______”?

Then, sales rep looks up latest tear sheer for FUD (Fear, Uncertainty & Doubt) on that Competitor.

“Ah. [Competitor 1] doesn’t really have a functional mobile app today, so that can be a challenge.”

“Ah. [Competitor 2] is about 1/10th the size of us. Good for very small businesses, but not someone you can trust for bigger deals.”

“Ah. [Competitor 3] doesn’t remotely have the level of security that we do. We’re fully _____ compliant.”

Etc. Etc.

If you don’t do it — your competitor will.

Fear, Uncertainty & Doubt can be annoying. But it works. 

This edition of the SaaStr Daily is sponsored in part by Notion

Notion combines project management with your docs and knowledge base, so you can stop jumping between tools, and stop paying too much for them too.

Ideally, at least 4 good months in a row before you try to raise a Seed / Late Seed Round.  

And at least 2 good quarters for a Series A round.  And more for later rounds.  Growth investors are going to want to see a full strong year or close to it after a slow one before they invest.

Earlier stage VCs expect that things often take a while until they take off.  A few quarters, sometimes, even a few years.  So they are OK if on the path to the first few million in ARR, they are some rough months.  But they do need to see things starting to come together, usually, before investing millions.

SaaStr events couldn’t happen without our partners, and we wanted to give a special shout-out to some of our newest sponsors for SaaStr Annual 2023. At the 9th ever SaaStr Annual, ~200 of the best and hottest companies on earth will go BIG as partners/sponsors. Join these incredible companies to experience all the value of SaaStr!

© SaaStr 2023

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