Inc - Want to Get Funded?

So in addition to other networking activities and our traditional meet-a-VC program, we’re adding a new way to connect 300+ founders and VCs together:

The 2024 Founder+VC Brunch at SaaStr Annual

We’re closing off the Roam Founders’ Lounge and setting aside 11am-2pm on Thursday Sep 12 just for VCs and founders to mingle and chat.

Monday has gone from $7m in 2017 to over $1B in revenue today — wow. But almost no one would fund them in the early days, and they did it in a seemingly very crowded category. Did monday.com’s founders feel like they’d be 100x bigger in just six years since that first SaaStr conference they attended?

Eran Zimman, monday.com’s co-founder and co-CEO came to SaaStr Annual to share his secrets to scaling and growth in an unpredictable market. And come see 200+ more sessions like this at 2024 SaaStrAnnual.com on Sep 10-12 in SF Bay!!

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

Join us for the official Chief Finance Officer (CFO) Summit at SaaStr Annual.

This is an invite-only Brunch and meet-up within SaaStr's 13,000-person industry-leading event, the SaaStr Annual.

The CFO Summit at SaaStr Annual will feature an afternoon of invite-only content and networking for leaders and executives in Finance only.

When: Wednesday, September 11, 2024 from 12 noon - 3:00 pm

Where: Within SaaStr Annual, at the 40+ acre San Mateo County Events Center

Who: Top CFOs and executives in Finance

There are a limited number of spots and tickets for the leading CFOs to attend.

Apply to be considered for one of the last spots. 

There’s so much discussion on LinkedIn and social media about how folks especially VPs of Sales should negotiate hard on the way in.

Maybe. Go for it, by all means.

But I think these posts miss a key second post. There’s an even better time to negotiate hard in many cases — around Year 2, when you’ve totally crushed it:

• When you’ve now built up a great team
• When things have accelerated
• When you outperformed everyone’s expectations

This is so rare, especially these days. To hire a leader that truly crushes it and goes above and beyond.

If that’s you, then for sure, 365 days in:

• Ask for that promotion to CRO (or whatever)
• Ask for SVP-level equity, or at least, another grant
• Push for a higher OTE that ties — to the results you’ve delivered

90% of CEOs, they may not have gotten it right at first. But the last thing most founders want is a truly high-performing leader moving on after a year.

Do it the right way. Don’t make threats you’re going to leave. But also, don’t feel like you have to get everything on Day 0.

It’s worth a shot. But you get another chance to push for more when you’ve truly earned it.

So there’s a mistake I see a lot of founders make again and again, especially when cash is tight. In fact, these days cash is tight for most, even if you’re at $20m, $50m, $100m ARR, since everyone’s trying to get more efficient and profitable.

And the mistake they make is they finally hire a great VP of Sales, Marketing, CS, Product, etc. that they really believe in … and then … they sort of veto or don’t quite believe in their first hire.

Even the very best of VPs, true VPs … need a right hand person. A Director, a VP, a top IC under them that they trust to evacuate. In fact, almost all the best VPs already have this person in mind when they take a new role.

Ask them. Ask them who’d they’d bring with them. You always should.  And 99% of the best VPs will always say something like, “I definitely need to bring Paul Donati with me.” Or “Jameson would be my first hire”.  Or something like that.

There are basically two options — really three, by blending the two:The first is to pay monthly commissions.  I generally don’t recommend this.  

I.e., if you pay the reps a 10% commission on what they close … and the customer pays say $500 a month … you pay the rep $50 a month. Each and every month, until the customer churns. This does manage cash flow better in the early days. But reps hate it, and in the end, it won’t help you conserve all that much more cash. So if you do this — don’t do it forever. Don’t do it once cash is a little less tight.

The second is to pay annualized commissions, with an allowance for churn.

And maybe add clawbacks. If that $500-a-month customer has an 80% retention rate at the end of the year on average, then that’s essentially a $4,800 deal. Instead of little $50 a month checks, you can just write a $480 check (10%) of the expected deal size when the customer signs on.

If you are worried you are paying for churned deals, just clawback a pro-rated amount of the $4,800. You’ll find it won’t matter much as you scale, as you’ll get good as estimating the total deal size from each customer segment.

And also more common recently is a blended model for utility-based models: you pay say half an annualized commission up front (40%-50%), and the rest based on usage throughout the year.

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

It’s a pivotal moment for the customer service industry. Join 1,000+ CX professionals at Frontlines on October 8th to learn how to foster a customer-first company culture and leverage AI to grow your business.

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