I'm a partner at Redpoint. I invest in Series A and Series B SaaS companies. I write daily, data-driven blog posts about key questions facing startups including how to fund raise, startup benchmarks, management best practices and team building. I co-authored the book, Winning with Data. Join more than fifteen thousand others receiving these blog posts daily by email.


A Key Moment in Time for Vertical SaaS Startups

In the past week, Oracle acquired two vertical SaaS companies. OPower is an Arlington Virginia based company that employs approximately 600 people. The company analyzes utility consumption patterns and helps homeowners reduce their energy consumption. Textura provides collaboration tools for the construction industry and is based in Illinois. Oracle paid $663 million, net of cash for Textura and $532 million for OPower. These two acquisitions form a notable moment in time for the evolution of the vertical software industry.

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Is the 2016 Economy a Risk to SaaS Companies?

It is an election year. The Federal Reserve has changed its interest rate hike plan. Venture financing has slowed by upwards of 15% in the first quarter. Q1 GDP growth fell to 0.5% from 1.4% in Q4. How much have all these factors impacted SaaS companies? Are buyers purchasing less software?

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Land, Expand, Retain

In ServiceNow's Q1 Investor presentation are the first semblances of SaaS metrics in public company reporting. If you sift through the 40+ public SaaS businesses, you won't find mention of annual recurring revenue, churn, account expansion, or cash collection cycles in most of them - even though these are the the metrics the management teams employ to evaluate and steer their businesses.

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Five Charts on the State of the Early Stage SaaS Market in 2016

As the overall venture market environment evolves in 2016, so too does the SaaS and Software segment. The number of Series A, B, C, and D investments in software companies stabilized at roughly 170 per quarter from mid-2013 through mid-2015, before falling 17% in Q4 2015 to a two year low. In Q1 2016, SaaS rounds increased a modest 10%. The SaaS fundraising has slowed in parallel to the rest of the market. But early 2016 pace still exceeds the best quarters of 2010-2012.

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The Secret of Exceptional Teams

It's hard to read Boys in the Boat before I sleep. The stories of the 8 rowers awaiting the coxswain's call at the starting line of a boat race remind me of the races I competed in with so many wonderful friends and oarsmen. Imagining those races - and in particular, placing second at nationals, the adrenaline surges and my heartbeat accelerates, resurfacing all those memories and moments.

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There are Only 3 Pricing Strategies for Your Startup

Pricing. Is there any word that confers some whisper of dark arts than pricing? Or any question that instills less confidence than, "How did you derive your pricing strategy?" Many times, startups replicate and tune competitors' pricing strategies. If everyone else prices per seat, then so should we...Is this the right thought process?

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Just How Far Along Are We In SaaS?

About 15 years since the creation of the first SaaS companies, public SaaS companies account for 14% of total software revenues generated by public companies, a figure growing at about 17% per year. Over the last ten years, the total amount of revenue generated by software companies has tripled from $53B to $169B, meaning SaaS companies are both taking share and growing the market.

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Have VCs Changed Their Seed Investment Strategies?

Starting in late 2015 through the first quarter of 2016, founders have shifted their seed fundraising strategies toward a single investor. Seeds led by a single investor have increased by 50% in these trailing six months. How much of this trend is due to greater participation of venture capitalists investing in the seed market?

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Party Rounds in Seeds - Just Getting Started or Has the Clock Struck Midnight?

Party rounds symbolized the heyday of the startup seed market just last year. Called parties because of the number of investors who collaboratively financed seed rounds of startups, the lists became almost comically long as seed sizes ballooned and investor syndicates swelled with them. Recently, I have heard from founders that they are less interested in party rounds, but does the data support the caseages?

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Five Questions About The Future of Chatbots

Last week, Facebook launched the messenger chatbot platform, which like Slack, Telegram and others, presents a big market opportunity for startups to innovate. In addition, the companies and products that determine how to most efficiently distribute their product on these new platforms will benefit from user curiosity and less competition, both of which result in lower cost-of-customer acquisition.

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