Deciding when to raise money and how much to raise are among the most crucial decisions a startup CEO makes. The “textbook answer” for the questions above is to raise enough capital for the company to achieve an accretive milestone. After hitting that milestone the company can go out again and raise more money at a… Continue reading Can revenue reduce your startup’s value?
Cisco just announced it is acquiring CloudLock, an Israeli Cloud security startup, for $293M. This is a great outcome for the CloudLock team and the investors. Bessemer first invested in CloudLock in January 2014 when the space it was operating was still very nascent. Below is the blog post we posted on our website in January 2014 that explains why… Continue reading Key lessons from CloudLock’s $293M acquisition
Investment trends are defined by a few significant events that become engraved in investors’ minds. These can be huge positive outcomes such as Facebook’s acquisition of WhatsApp for $22B, Twitter’s post IPO surge to $40B market cap, or Emergence Capital 300-fold return on a $4M investment in Veeva System. Such positive events generate momentum for… Continue reading LinkedIn’s crash is a defining moment for VCs
As discussed earlier the two most important metrics of a SaaS company are growth rate and retention rate. Wall Street understands this and considers retention as the second most important factor in valuing a SaaS company (first is growth rate). I would take it even further and argue that for SaaS startups retention should be… Continue reading It’s all about the churn
In the previous post we discussed how the public market values SaaS companies and which metrics you should measure. Today I want to discuss what happens behind the scenes when investors determine the value of an early stage startup. The truth is that determining the value of a startup is much more art than science. The reason is that as investors we… Continue reading Why valuations don’t reflect real value
Now that we’ve talked about why SaaS is a beautiful business model, I’d like to give some guidance and tips to help do it right. Of course there is no “one size fits all” answer to how to do SaaS, but there are many things which are common across companies and many things we see that… Continue reading Grow or die