Revenue Doesn’t Matter

#1

Post by bretthardin » Fri, Dec 28, 2012, 8:47 PM UTC

Re: Revenue Doesn’t Matter

#2

Post by smalter » Fri, Dec 28, 2012, 9:26 PM UTC

The less sensational title: Revenue alone doesn't matter, you have to consider it in context.

If the question is purely, "What is a ballpark MRR for a Series A SaaS company?", this is a helpful thread: http://www.quora.com/Software-as-a-Service-SaaS/What-are-ave...

Re: Revenue Doesn’t Matter

#3

Post by JacksonGariety » Fri, Dec 28, 2012, 9:32 PM UTC

Title is misleading. @Smalter's suggestion is far more accurate.

Re: Revenue Doesn’t Matter

#4

Post by casca » Fri, Dec 28, 2012, 9:51 PM UTC

TL;DR: Some guy on Twitter says "VCs will fund any company with a Series A if they are making $2,750 a day". The author disagrees and says that there are 3 things that are important: market, growth rate and margin.

Re: Revenue Doesn’t Matter

#5

Post by jspaur » Fri, Dec 28, 2012, 10:05 PM UTC

Suggested Title: Revenue alone won't get you VC

Re: Revenue Doesn’t Matter

#6

Post by mikegioia » Fri, Dec 28, 2012, 10:10 PM UTC

smalter wrote: post #2

The less sensational title: Revenue alone doesn't matter, you have to consider it in context. If the question is purely, "What is a ballpark MRR for a Series A SaaS company?", this is a helpful thread: http://www.quora.com/Software-as-a-Service-SaaS/What-are-ave...

Wow, the top post in that quora topic says $2M in ARR for an unproven team before they get any VC money. That seems kinda high to me. I feel like the team's proven themselves after a couple hundred grand of annual revenue.

Re: Revenue Doesn’t Matter

#7

Post by kkowalczyk » Fri, Dec 28, 2012, 10:34 PM UTC

casca wrote: post #4

TL;DR: Some guy on Twitter says "VCs will fund any company with a Series A if they are making $2,750 a day". The author disagrees and says that there are 3 things that are important: market, growth rate and margin.

Corrections:

1. "Some guy" = Jason Calacanis.

2. "on Twitter" = http://blog.launch.co/blog/there-is-no-series-a-crunch.html

Re: Revenue Doesn’t Matter

#8

Post by yurylifshits » Fri, Dec 28, 2012, 10:45 PM UTC

In my view, for Round A you need revenue and the following three:

    100M$+ market volume
    Margins
    Distribution strategy

Distribution strategy is better property to focus on than growth rate. All these week-over-week or month-over-month numbers can be gamed. And keep in mind "Crossing the Chasm" challenge. Your growth rate among early adopters has nothing to do with your ability to win the mainstream market.

Re: Revenue Doesn’t Matter

#9

Post by abolibibelot » Fri, Dec 28, 2012, 10:58 PM UTC

mikegioia wrote: post #6

smalter wrote: post #2

The less sensational title: Revenue alone doesn't matter, you have to consider it in context. If the question is purely, "What is a ballpark MRR for a Series A SaaS company?", this is a helpful thread: http://www.quora.com/Software-as-a-Service-SaaS/What-are-ave...

Wow, the top post in that quora topic says $2M in ARR for an unproven team before they get any VC money. That seems kinda high to me. I feel like the team's proven themselves after a couple hundred grand of annual revenue.

"A couple hundred grand" is what a freelancer who charges well makes in a year.

Re: Revenue Doesn’t Matter

#10

Post by mikegioia » Fri, Dec 28, 2012, 11:04 PM UTC

abolibibelot wrote: post #9

mikegioia wrote: post #6

Earlier quoted context omitted.

Wow, the top post in that quora topic says $2M in ARR for an unproven team before they get any VC money. That seems kinda high to me. I feel like the team's proven themselves after a couple hundred grand of annual revenue.

"A couple hundred grand" is what a freelancer who charges well makes in a year.

Yea but we're talking about a company with a business model that isn't "freelancing". I'm assuming a few hundred thousand dollars isn't the upper bound like it would be for a freelancer.