Hi, I'm a partner at Redpoint. I invest in Series A and B SaaS companies. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 16,000 others receiving these blog posts by email. Subscribe.

The Machinery of Blogging

I've been getting a few questions about the tools I use to publish this blog, so I figured I'd write about it and reveal the machinery behind the curtain. I use four main tools Jekyll, Github Mou, and RStudio. Jekyll is the blogging engine; Github is the hosting provider; Mou is the app I use to write these posts; and RStudio is the place I analyze data and make charts.

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Are VC Mega-Rounds the New Normal?

Each morning's news seems to bring another fund-raising announcement of ever larger scale. Just a few months ago, Pure Storage raised $150M in the largest ever venture investment in a storage company. These record financings certainly generate significant press interest. But how representative of the fund raising environment are these mega-rounds?

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How Fast Must a SaaS Startup Grow to Raise a Series A?

Last week, Sean Ellis made an interesting comment in response to this post on public SaaS companies' growth rates. "Everyone seems to throw out the 15% - 20% month over month MRR growth as the target. But seems like it's just a random target." I'm guilty of giving the same advice to startup founders without providing a transparent rationale. This post is my explanation of why the 15-20% MRR growth number is a reasonably good target for post-Seed/pre-Series A SaaS startups to aim for.

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How Quickly Does a SaaS Startup Have to Grow to Go Public?

At the time of the IPO, the median Software-as-a-Service (SaaS) company generates $100M in revenue, creates $2.6M in profit and holds $85M in cash on the balance sheet. A company in this position typically raises $107M in its IPO and trades at 11x revenue, for a $1.1B market cap.

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Why There's Never Been a Better Time to Found a SaaS Startup

SaaS companies are the darlings of the public market. The average publicly traded SaaS company enjoys twice as strong a revenue multiple as ten years ago. SaaS companies' time to IPO has been decreasing steadily from over 10 years since founding to under 7. Despite the decrease in time to IPO, the average dollars raised at IPO has tripled from the early nineties and grown by 50% since 2000.

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The New Market Places

One of the most important trends in the Internet at the moment is unbundling. Entrepreneurs are picking apart Craigslist and eBay, vertical by vertical. At the same time, other entrepreneurs have replicated the core functions and features of Facebook and LinkedIn, creating hugely valuable companies. But simply calling this trend unbundling doesn't do the movement justice, particularly in the transactional web. The trend is more fundamental.

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A Moore's Law for Data

Since the first transistor, ncreasing speed has been at the core of much innovation in Silicon Valley . Over more than three decades, Moore's Law has remained the engine of progress in chip technology. I've been wondering if a analogous productivity law will be written for data.

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Great SaaS Companies Focus on Behavior Change

Most SaaS companies provide tools to help people accomplish a goal in a better way than they could before. A key part of a SaaS startup's toolkit, then, is changing end user behavior. A startup that doesn't change the behavior of a customer will see the customer churn in a few months or at the expiration of their contract. Customers don't change their behavior for many reasons. Sometimes the friction to adopting a new workflow is too great. Other times, the value proposition isn't compelling enough for users. Or, the use case is too infrequent for users to remember to change behavior.

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Do More Competitors in a Sector Decrease Fundraising Success?

Over the last 12 years, the number of startups founded has grown each year by 25%, according to Crunchbase data. That's quite an acceleration each year! As the number of companies in a sector grows, do the odds of successfully raising capital decrease?

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The Four Key Steps in Startup Fund Raising Processes

Raising capital from venture capitalists at any stage can seem like a very strange, ambiguous and amorphous process. I've written about the way Redpoint diligences/researches a startup and its market and what questions we tend to ask at each stage. In this post, I'll focus on the process from entrepreneur's point of view.

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Index