Inc - The 20 Minute Test in VP Hiring

So much has changed in recruiting in the past 4 years:

• Folks do far more Zoom interviews than they ever did IRL, often with zero research
• Reference checks aren’t taken as seriously as before, or even done at all
• Many don’t even plan to stay for a year
• Many are working 2 or more jobs at the same time, and multiple side hustles
• Layoffs are up
• SaaS companies have to be far more efficient than before
• Folks want bigger teams, and to do less work themselves

And with that, I think across my portfolio of 30+ investments, I think we’ve all gotten a bit worse at hiring. Hiring is always tough. It never gets easier. But in general, I’ve seen folks lower the bar, hire faster, and do less diligence on hiring than we used to.

SaaStr Europa 2024 is June 4-5 in London and it will be full of VCs!

Just a sampling of who’s already coming:

20VC

Accel Partners

Activum SG Ventures

Albion VC

Altair Capital

Atomico

B Capital

Backbone Ventures

Beacon Capital

Beringea

BlackRock

There’s no magical answer, but for venture-backed start-ups, for years VCs have aligned on around 6%-8% equity for a non-founder / outside CEO. As you approach IPO and very late stage, that often goes down.

And as a rough rule, all the founders together at IPO, if you raise multiple rounds of venture capital, will likely share about 20%-25% as a group.  Here’s a nice chart for Rubrik that Meritech made illustrating that, the latest SaaStr / Cloud leader to file to IPO.

So it’s been a long IPO drought since HashiCorp was the last IPO of the Boom Times in December 2021. Since then, we’ve had just one — Klaviyo.

But now a second SaaS security leader has filed to IPO, Rubrik. They’re still transitioning from onprem / appliciance model to cloud, which makes some of the metrics a touch confusing.

But they are ar $780,000,000+ in ARR, with an 86 NPS and strong revenue growth at 29% overall and 49% in subscriptions (yes, it’s confusing).

Is this the new bar to IPO in SaaS? $500m+ ARR, with ~50% growth?

If so, it’s a mighty high bar.

A little while back, Harry Glaser sold his SaaS analytics startup, Periscope Data, for $130M. It was a difficult, punishing, and rewarding experience. At a recent SaaStr Workshop Wednesday, he shared a behind-the-scenes look into what this process looks like and five key takeaways for other founders who want an inside look into the process.

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

Stripe Sessions brings together business leaders and builders to discuss the most important internet economy trends. In 2024, we’re focusing on what’s possible—and what’s inevitable—as technological advancements change the world and the global economy with it.

First, be honest about why. You can blame it on macro issues if you want, but if growth has radically decelerated, it’s likely because you are less competitive than you were before. 

You probably have fallen out of product-market fit, partially or entirely. Be honest. And go close those feature gaps, and get back to being ahead of the competition — not behind.

Second, focus on the customers you do have and making them super happy.

I’ve been there, we’ve all been there. At least, patches where we weren’t growing fast enough. If you have a ton of money, yes, you can sort of spend your way out of it, to some extent.

But in the end, most of your customers will come from your existing customers. Via word-of-mouth, via referrals, via blog posts, via folks taking them with you to new jobs, etc. Take a look at this chart from HubSpot on how it got to its first $1 Billion in ARR. The #1 source of new customers? Word-of-mouth.

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