The Two Big Potential SaaS/ Cloud IPOs of 2024

So the IPO market sort of, kind of, reopened a bit in 2023 — after being closed for 2 years for the most part. Klaviyo, Instacart, and ARM all 3 great leaders, IPO’d in a short window, unfortunately, to a bit of a quiet thud.  None really traded up, and for the most part, I think folks view their IPOs as a test around a brief market up-tick that didn’t taken.

No on else really followed them in tech, and in the end, 2023 will still end with an IPO Whimper, low public multiples, and limited liquidity for Unicorns.

Having said that … it looks like 2 Really, Really Good Ones Are Ready to IPO in 2024.

That 2 SaaS / Cloud Leaders could be ready to IPO in 2024 at $2 Billion+ ARR, growing 50% or more.  And both, importantly, with strong brand names (even in consumer, With Canva).

If both trade at say 15x ARR, even in a 6x world, that would put both at $30B+ market caps. Now, maybe they both wait for 2025.  We’ll see.  

But both look strong enough to go in 2024. That will get folks excited again.

It is tough for most of us.

We get that the bureaucracy and frictional taxes are going to go up.  But it’s seeing the organization make decisions that are the “right” ones for the larger organization, but not what we see as best for our product, our team, our creation … that make it usually really tough.

My uber-learning is this: if you get acquired, you have to (mentally) give it 24 months. At least for planning purposes.

Just chill a little bit. Assume you’re signing up for something new, that isn’t yours, for 24 months … and now you are just in “best efforts” mode.

No matter what your stay package is, or anything else, first, understand it’s not yours anymore.  And second, stay mentally engaged and checked-in for 24 months … in whatever role makes sense.  Just roll with it.

Don’t try to change things, or break things.  Don’t stress out about the plan, or the goals.  Don’t even worry about the team leaving — you can’t stop them. And they may stay. Just be as helpful as you can for 24 months, and be zen about it.

Despite economic headwinds, optimism remains for the future of B2B SaaS. Klaviyo’s IPO was one recent bright spot, but what will it take for this type of activity to become a trend?

SaaStr's very own CEO and Founder, Jason Lemkin, will lead a panel of investors, exploring the current state of investments, the trends fueling growth, and what they anticipate for the years to come.

So I see a lot of folks give the same piece of advice, which I do think has a lot of truth in it:

“Be careful with titles. They’re almost impossible to fix later.”

Almost every successful founder has a story where they made someone a VP or even a CRO or CMO that didn’t really deserve it and it just created headaches down the road. They weren’t ready to be a real VP, and/or they needed to bring in a “true VP” a few months down the road, and the hire quit.

A common hack is to start someone off as “Head of ______” and see where it goes.  IMHO, if the candidate is OK with that, go for it.  The best don’t mind proving themselves.  The rest push back, however..

But as with many things, my views have gotten a bit more nuanced over time.  I’ve observed, for example, a lot of “go-getters” really, really want the CRO title now.  Maybe it’s worth it as a prize.  And a lot of folks who really are VPs of Marketing want to be CMO.  Does it matter?

I’ve learned to flip this around.

The biggest perceived issue is that you have to top someone with an inflated title later. I.e., it’s hard to bring in a CRO above a VP … if that VP already has the CRO title ;). 

But the reality is, this is fixable.  That’s what “SVP” was invented for.  Or you just, as painful as it may be, change someone that is a VP now into a “VP of Commercial” or something similar.  It’s painful to fix, but it can be fixed.  You top who you need to top.

No what I’ve learned is a much bigger issue is when they can’t do the job.  The sales leader that can’t really build a team that wants to be VP.  The marketing director that wants to be VP, but can’t really own the commit.  Etc. etc.

So if you think they truly can quickly grow into the title, and that’s the only issue in the hire, I say maybe give it to them.

A few in my experience:

• Mocking the competition, especially successful competition. The best founders do win, but they also profoundly respect the competition — and understand and learn from them.
• Hiding core issues during fundraising. Hiding that they don’t really have a CTO, or that they’ve already raised a ton of money, or other big issues. Get them out there, at least during fundraising.
• Thinking they can Go Big with just a tiny team or only a tiny amount of funding. Sometimes this is possible, but it’s rare. Few of us are Craigslist or Mailchimp.
• Arrogance. This just never plays well. I love the talk from the co-CEO of Atlassian below saying he still has Imposter Syndrome. Sometimes a little is OK from a top CTO, but basically never a CEO.
• Generic outreach. The best founders reach out with amazing emails. Not generic LinkedIn Inmails.

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