41–50 of 60 posts
with mad respect to dmor, this doesn't fit. even at 1.5m ARR, with 21 employees, office space, AWS bills and the 'etc', you aren't "massively profitable". i don't feel the need to go through the math since it's obvious. maybe there'd have been a few bucks to spare, but there are no "massive profits" there.
In fact, if our run rate had been that high we would have been massively profitable. with mad respect to dmor, this doesn't fit. even at 1.5m ARR, with 21 employees, office space, AWS bills and the 'etc', you aren't "massively profitable". i don't feel the need to go through the math since it's obvious. maybe there'd have been a few bucks to spare, but there are no "massive profits" there.
In fact, if our run rate had been that high we would have been massively profitable. with mad respect to dmor, this doesn't fit. even at 1.5m ARR, with 21 employees, office space, AWS bills and the 'etc', you aren't "massively profitable". i don't feel the need to go through the math since it's obvious. maybe there'd have been a few bucks to spare, but there are no "massive profits" there.
That comment needs to be kept in the context of my blog post -- it is based on the company in January when we went out to raise. We had 14 people on the team at that time, had reached ramen profitability and then decided to spend conservatively to grow. At that point in time, increasing our ARR 3x would absolutely have made us hugely profitable percentage-wise to how much we were spending to generate that income.
Earlier quoted context omitted.
That comment needs to be kept in the context of my blog post -- it is based on the company in January when we went out to raise. We had 14 people on the team at that time, had reached ramen profitability and then decided to spend conservatively to grow. At that point in time, increasing our ARR 3x would absolutely have made us hugely profitable percentage-wise to how much we were spending to generate that income.
i hear you. however my b2b saas business does 2M+ arr with 12 employees and still i would not consider us "massively profitable". no doubt there's a big difference between our cost structures and the biggest is probably employees. i'm assuming you must be paying below market for your technical employees in exchange for more equity.
Earlier quoted context omitted.
i hear you. however my b2b saas business does 2M+ arr with 12 employees and still i would not consider us "massively profitable". no doubt there's a big difference between our cost structures and the biggest is probably employees. i'm assuming you must be paying below market for your technical employees in exchange for more equity.
I think a big difference might be cash flow - we are getting paid up front for annual contracts. So our ARR doesn't fully represent our cash position. We pay market rate salaries, benefits, etc.
Earlier quoted context omitted.
To a degree I think in B2B you have every right to be quite a bit more risk averse as an investor, and demand to see a solid revenue stream coming in. In B2C you can bet on the idea of "explosive" growth, but that's much less likely in B2B. The flip side of that of course is that you should be seeing a lot more revenue per customer in B2B, but the quantity of customers isn't ever going to hockey stick in the same way…
I think SaaS companies are massively under-valued because most investors still do not understand how powerful a low churn recurring revenue stream is for a) predictable sales process/outcomes b) self-funding growth c) ability to take risk on new products because you can test and sell to existing customers. I think there is a very good chance that VCs will miss HUNDREDS of $100M+ SaaS opportunities due to this risk av…
Isn't this a problem then with educated them and selling them? If it fits with the rest of your strategy maybe you could do something in this area. [1]
"If I were to start a fund I would focus 100% on this asymmetry."
Are you sure that it is a lack of knowledge and understanding or there is some other reason that makes what they do the low hanging fruit?
Along the lines of [1] why don't you package and present the data and charge for it to make this case then?
I've seen this happen in other businesses (real estate investment) but that was some time ago and only with certain types of properties when it was done.
[1] Sorry to be so quick to give you something else to do. But maybe there is opportunity here that would justify the effort.
40 investors where "50% are in touch 1x per month, and 25% are in touch 1x per week." That's 60 emails a month (2 a day). Do you find this helpful? Can you keep them all so well-informed? Can you actionably react to all that communication and advice?
We have 20 something investors and on a given month there are ~2 that send more than one e-mail, 5 that send 1 e-mail, and basically nothing from all of the rest. I don't feel a burden, tbh. I like it, when I need help I get it - and I have a few really solid mentors in the group. The only pain is at series A when I'm going to have to go get all of them to sign the closing docs. That'll be hard.
Earlier quoted context omitted.
We have 20 something investors and on a given month there are ~2 that send more than one e-mail, 5 that send 1 e-mail, and basically nothing from all of the rest. I don't feel a burden, tbh. I like it, when I need help I get it - and I have a few really solid mentors in the group. The only pain is at series A when I'm going to have to go get all of them to sign the closing docs. That'll be hard.
Did you use an (investment) LLC to condense the angel round? That seems to make the paperwork easier for future rounds, I'm told...
If I were looking for a new startup job, I would check out Mattermark first to develop a list of startups I thought looked like they were doing financially well / had strong employee growth etc and could succeed before then looking into which I was interested in the work at. I think Mattermark could have some other uses for their data that could prove valuable (I'd pay for that). Right now if I were in that situation…
It's awesome.
Earlier quoted context omitted.
i hear you. however my b2b saas business does 2M+ arr with 12 employees and still i would not consider us "massively profitable". no doubt there's a big difference between our cost structures and the biggest is probably employees. i'm assuming you must be paying below market for your technical employees in exchange for more equity.
I think a big difference might be cash flow - we are getting paid up front for annual contracts. So our ARR doesn't fully represent our cash position. We pay market rate salaries, benefits, etc.