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1/ SaaS early-stage valuations are 
Exciting! And this could create a crop of zombie companies if not managed correctly and growth slows:
* Many years to grow into valuation
* Morale issues for team
* Lack of exits due to inflated price tags
Thread on how to navigate:
Exciting! And this could create a crop of zombie companies if not managed correctly and growth slows:
* Many years to grow into valuation
* Morale issues for team
* Lack of exits due to inflated price tags
Thread on how to navigate:
2/ Team: Build the Team to Grow Into Your Valuation
The company is now priced for perfect execution. So you need a team to execute perfectly. Practically, this means if you normally would hire a VP to scale to 2X the size, you need one to scale to 10X the size.
The company is now priced for perfect execution. So you need a team to execute perfectly. Practically, this means if you normally would hire a VP to scale to 2X the size, you need one to scale to 10X the size.
3/Scoreboard: Pick the Metrics to Look Ahead
Backward-looking metrics like revenue and ARR growth will lead you astray. Focus on the forward indicators of growth:
* New logo ARR
* New pipeline
* Gross Retention Rate
* Net Retention Rate
Don't manage from the rearview mirror.
Backward-looking metrics like revenue and ARR growth will lead you astray. Focus on the forward indicators of growth:
* New logo ARR
* New pipeline
* Gross Retention Rate
* Net Retention Rate
Don't manage from the rearview mirror.
4/Gameplan: Don’t Spend It All In One Place – Or In One Year
Worst thing you can do is spend the money quickly and not get the growth to show for it. No one wants to follow Tiger or Coatue in a company that is slowing. So spend carefully and make sure you measure the ROI.
Worst thing you can do is spend the money quickly and not get the growth to show for it. No one wants to follow Tiger or Coatue in a company that is slowing. So spend carefully and make sure you measure the ROI.
5/Offense: Start New Growth Engines Early
Growth will eventually slow. Eventually, every market has a finite TAM for new logos per year. To keep growth going, you always need new engines - new products, segments, verticals, etc. Don't start too late.
Growth will eventually slow. Eventually, every market has a finite TAM for new logos per year. To keep growth going, you always need new engines - new products, segments, verticals, etc. Don't start too late.
6/Defense: Be Proactive If Growth Slows
Rationalize spending right away if growth slows. If you started as a hypergrower and are now growing at just a high rate, you can still create value. You just need to shift to efficient growth.
At some point, Rule of 40 is your friend.
Rationalize spending right away if growth slows. If you started as a hypergrower and are now growing at just a high rate, you can still create value. You just need to shift to efficient growth.
At some point, Rule of 40 is your friend.
7/Special Teams: Culture and Patience Are Key
If growth slows, people will leave. But double down on the folks who believe in your mission and values. Not everyone is transactional. Focus on what makes you special.
If growth slows, people will leave. But double down on the folks who believe in your mission and values. Not everyone is transactional. Focus on what makes you special.
8/Take Care of Yourself
Twitter is an infinite feed of FOMO - everyone else seems to be crushing it. The truth is it's a grind for most (definitely for me). Even if you're not the fastest-growth-ever-company, you can still do something you're proud of.
Twitter is an infinite feed of FOMO - everyone else seems to be crushing it. The truth is it's a grind for most (definitely for me). Even if you're not the fastest-growth-ever-company, you can still do something you're proud of.
9/More Here
Special thanks to my OG investors @ajay_bcv @nakul @rogerleevc @bdeeter Jeff Lieberman for input on this post (and all the help over the years!) https://www.gainsight.com/blog/so-youve-raised-a-saas-mega-round-now-what/
Special thanks to my OG investors @ajay_bcv @nakul @rogerleevc @bdeeter Jeff Lieberman for input on this post (and all the help over the years!) https://www.gainsight.com/blog/so-youve-raised-a-saas-mega-round-now-what/
