Of the ten most important metrics on a startup's financial statements, revenue might seem to be the most important. But it isn't. Gross margin matters more because it is directly tied to a company's ability spend to grow and achieve profitability.
In "Time to Hang Up on Voice," Sam Lessin argues voice isn't the interface of the future for three reasons. First, voice is hard to use in public places because background noise complicates interpretation, and because many people are in earshot, voice isn't private. Second, speaking to computers is less efficient than typing or using gestures. Third, keyboards are better tools for editing text than voice. But I think he's wrong if for only one reason: speed.
In the past, we have benchmarked the revenue per employee of large publicly traded SaaS companies and determined that the average is about $200k of revenue per person. But, that analysis examined revenue per employee that only one point in time. As Jesse Hulsing pointed out to me, examining this figure over five years reveals quite a bit about the health of the business.
The startup acquisition market is poised to have its best year in nearly a decade. If acquirers maintain the same pace from the first nine months of the year through Q4, more than 450 venture-backed startups will have been acquired, generating more than $25B in proceeds. Given this state of affairs, it's a good time to take stock of the major trends in the startup market. I've observed four.
This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. Today, we'll explore one of the enterprise behemoths, both in market cap and average revenue per customer: WorkDay.
The WSJ published a recent chart of the 49 startups with billion dollar valuations. According to their research, there have never been as many privately held companies with such high valuations ever. The absolute number of these massively valuable companies alone is amazing. Ten years ago, most of them would have gone public by now. But what other insights can we tease from the data about these very special businesses?
Yesterday, I attended an event held by the IT team of a major bank. When the data analytics team took the stage, I listened with great interest as the chief of the group described their internal struggles with data and the areas where startups might help them achieve their goals. He articulated his team's needs and goals in a very concise way by bucketing his users into three personas.
I started working in venture capital three months before Lehman imploded. After the bankruptcy, the fundraising market contracted as investors internalized the new normal of the public markets. Over the past six years, the fundraising markets flipped from quite bearish to mildly bullish to extremely bullish. Or at least, that's the way it feels to me. I've struggled often to convey the magnitude of the change and its unevenness.
The market for startups raising capital has changed dramatically over the past few years. Round sizes have ballooned: startups raise 50%+ more capital in Series As than a few years ago. The looming Series A crunch never occurred. Instead, we've seen the bifurcation of the Series B market. Series Bs are the spring of hope for some startups who raise megarounds and the winter of despair for others who must compete for increasingly scarce Series B dollars.
Come work at Redpoint! The Redpoint Software team would like to add a new associate to the software team in our Menlo Park office. We're looking for someone to work alongside the tightly-knit group managing Redpoint's early stage software practice. This person will work shoulder-to-shoulder with all the members of the team, discovering new startups, evaluating their market opportunities, working with portfolio companies, expanding the firm's network and contributing to investment decisions