24% of all Seed VC Rounds Were For SaaS in 2024

So for a while, it did feel like SaaS was dead in VC.  Somewhere from March 2024 to October 2024 or so. The, the SaaS leaders started to re-accelerate growth, and their market caps in many cases went up 40%+ or more. AI was often the accelerant.

And it’s clear now, at least for now, SaaS is back.

So the latest data from Carta is helpful. Of 1,302 seed-stage rounds on Carta this year. 308 or 24% were into SaaS — and it was the largest category:

As you enjoy the Holidays, why not set yourself up for success to attend the biggest SaaS event of the year — SaaStr Annual, May 13-15 2025!

Grab your tickets now before prices go up Jan 4:

• Save 20% on 1-2 tickets, $200 savings
• Save 30% on 3+ or more tickets, $350 savings
• on each ticket!

But should you miss these holiday savings: 

• Startup tickets will be $1099 on Jan 4th
• Big Co & VC tickets will be $1299 on Jan 4th

This is your chance to hit your goals next year and experience the biggest SaaS event of the year. Not to mention, this will be 11th SaaStr Annual so we'll be adding even more new ways to network and get together, building off the success of the CEO + CRO, CMO, CCO and CFO summits we launched in 2024.    

So with the end of the year coming up again, it’s time to once update a classic SaaStr post. It may even be our official SaaStr Holiday post, really.

On why the best sales teams just close so much on the last day of the year (be it Dec 31 for many of you, Jan 31 for others). When there really is no need to buy then … at all. Not really. Especially when budgets remain under much more scrutiny than a few years back.

Why would a customer buy the last week of December? Or even, on New Year’s Eve?

I know many are talking about AI fueling 1 person, $1B start-ups.  I hope that happens.  But maybe … not so much in SaaS.

Today, the most efficient public SaaS company is probably Doximity, at about $700,000 in revenue per employee.

They get many network benefits, being the “LinkedIn for Doctors”.

So that’s probably as efficient as you can get outside of AI magic.

If you are sales-driven, you’ll usually stall out at $1.5m-$2m in ARR or so if you don’t start growing the team to the next level, The First 50.

There’s just physics here to get to $10m in ARR in a sales-led model, even a partially sales-led model:

• After $1.5m or so at the very latest, you’ll need to start hiring dedicated customer success professionals. Assume 1 per $1m in ARR, you’ll need to scale a team of 5 at least to get to $10m in ARR.
• You’ll need another sales rep at least per every $500k in new ARR. In the early days, the CEO may do it all, or a single hero rep. But even with a higher quota than $500k, you won’t hit a yielded quota that high. And reps take time to scale. So best case, to get to $10m ARR from $1.5m, you’ll need at least 15 reps to get there, and really more so you don’t stall out. And you’ll need a few managers to manage them.
• You’ll need a full marketing team.
• You’ll need a product development team, at least a couple folks, to keep up with your much more complex roadmap.
• Even best case, it’s hard to imagine a dev team tinier than 8–10. And you’ll need a real QA team as you scale. You can’t hack QA forever.
• As you scale, you’ll need a dedicated 24×7 devops/techops team. It’s hard to do this with < 3 folks.

Add it all up, and 10–20 folks can hack their way to $1m, $2m, maybe even $4m in ARR if the product is relatively simple, the leads are mostly in-bound, and sales is simple, too.

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

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So it’s ending up a good year for Enterprise SaaS, fueled in part by AI, but also fueled in part by bounced off some lows in terms of overall enterprise IT spend:

• ServiceNow is worth a cool $230 Billion at $11 Billion in ARR — the 20x club! Its stock is up a cool +64% this year!
• Salesforce is now worth a cool $340 Billion at $38 Billion in ARR.  Its stock is up a cool +40% this year!

Both are epic platforms.

But ServiceNow’s ARR multiple is far higher, as its growing at 23% a year, while Salesforce has dipped below 10% a year growth this year.

#1:  “Don’t do any VC investments your first year. Take your time”

Sound advice. But would have missed 4 unicorns if I had. I would have missed leading seed investments into Pipedrive, Algolia, Talkdesk, Parklet/Greenhouse, and more.

#2: It’s Hopeless. Let’s Throw in the Towel.

Yes, it was. But quitting doesn’t help. And by not quitting, it ended up not being hopeless. We had customers. Just not enough of them. That was something, not nothing.

3.  Don’t start that start-up, it won’t work, there aren’t enough customers, and the technology doesn’t work.

All true, based on conventional knowledge. We sold that company (my first start-up as a founder) for $50,000,000 12.5 months later.

4.  Don’t join that start-up, it’s not enough money.

True, but it got the journey going. Do things that accelerate your growth and career.  Worry less about a few nickels and dimes today, at least if you can.

5.  Don’t leave.  I’ll pay you $50,000 to stay.

A lot of money, especially at the time, when it was more than my life savings.  But the moment had come to do the next thing.  Still, I stayed 60 days for that boss.

6.  Don’t hire that VP.  He has one terrible reference.

Yes, but what about the other 3 great references? The best in startups often break a little glass. Too much is a problem. But a chip on the shoulder can be good.

– Director of Content:

Take over and manage a big part of our content calendar, and help manage our speakers and webinars. The engine already works here, you don’t have to create content (unless you want to), but you need to own a big chunk of the calendar and speakers. You have to be able to work at scale and with a lot of volume of content (30+ posts, 2 podcasts, 2 youtubes a week; 200+ speakers a year; 50 workshop wednesdays). But if you can own a big chunk of it, it’s a great chance to own it at a strong brand and platform.  This is not a great job for someone that likes to just work on 1 or 2 pieces of content a week or per month.

– Director of Growth:

Take over our rich, nuanced email campaigns and a multi-million dollar revenue target. If you know Marketo / HubSpot cold and love running highly segmented campaigns, this could be your role. A lot of variable comp potential. If you are truly great at email++, come get paid to run the playbook at scale here.  It’s really a B2C playbook for B2B executives though.  It’s a ton of high-volume campaigns, carefully tailored to many sub-audiences.  With relatively big revenue targets.

– Senior Sales Exec, Sponsor Sales

A chance to close $2m+ of partner / sponsor sales a year or more, and get paid well doing it, with a fair amount of autonomy. A fun way to close $60k-$100k deals with great brands to sell to — and a great brand behind you. If you enjoy selling to marketers especially.  But it’s selling sponsorships (events + media).  Make sure that’s you.  The role can be U.S.-based remote, it’s OK. The ideal candidate could work 2-3 days a week from our Palo Alto office, however. You can learn a bit what it’s like here.

– Director of Events

Want to help own SaaStr Annual, Europa and APAC?  Are you a truly hands-on IRL event exec that wants their shot at owning several iconic industry events?  Take your time and let us know what you could truly own here. And not just tell an agency to do it all.

When Dan O’Connell stepped into the CEO role at Front, a customer service platform with nearly 9,000 customers and nearly $100M in revenue, it wasn’t his first rodeo. Having previously taken over from the founder as CEO at TalkIQ (pre-revenue), Dan brought to SaaStr Annual his valuable insights about managing change at different company stages.

Dan shared four practical tips for leaders stepping into new roles – whether as a CEO, executive, or first-time manager. Here’s what he learned about driving effective change while preserving company culture.

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