As a SaaS startup grows, recurring revenue begins to fuel the company. Not too far into the future, the existing customer base begins to contribute more of the startup's revenue than new customers and bookings. Each startup will observe this revenue composition transition at a different point in its evolution because it's a function of growth rate and churn rate.
The startup fundraising market in 2016 has been difficult to characterize. Punctuated by a concentrated decline in public tech stocks, the sentiment in Startupland has changed from resolute ebullience to a calmness approaching caution. Two months in, we can analyze January and February data. This posts analyses US headquartered information technology companies which VC-led investment rounds.
In "How People Learn to Become Resilient" Maria Konnikova retells the story of Norman Garmezy and George Bonnano, the first developmental psychologists to study grit and resilience.
This weekend the New York Times Magazine published the annual Work Issue, a compendium of 9 articles reimagining the modern workplace. They span topics from building the perfect team, to managing a company fewer meetings, to eliminating bias in recruiting processes - even the social ramifications of so many people eating lunch at their desks, "desktop dining."
The single most important business decision in evaluating a business is pricing power. And if you need a prayer session before raising price, then you've got a terrible business --Warren Buffett
A dollar is a dollar is a dollar, right? Not quite. Not all revenue dollars are created equal, but all gross profit dollars are. Gross profit, not revenue, is the metric companies should be using to compare themselves. Ultimately, gross profits account for more than 55% of the forward multiple of publicly traded SaaS companies after normalizing for revenue growth.
At SaaStr 2016 and SaaS Office Hours in New York, I shared an analysis of the fastest growing SaaS companies over the last 3 years. In particular, I benchmarked the revenue, growth rates and round size characteristics of these businesses at their Series A.
Each new year, I try to implement a new productivity hack. Getting Things Done. Bullet Notebook. This year, I'm trying to manage my to do list with my calendar.
Attorneys witness the changes in the fundraising market from a unique vantage point. Consiglieri to startup founders and investors alike, attorneys assist in the negotiation and are privy to the terms of investment. Fenwick & West, one of those law firms, released data this morning detailing the evolution of financing terms for Q4.
Join me for SaaS Office Hours on February 22 in New York at the Axial headquarters. This is the first time we'll be hosting SaaS Office Hours on the East Coast, and there will be more to follow.