INVESTMENT SPECIFICS, IDEAL STAGE, CRITERIA & Commitments:
We invest in 4-5 up-and-coming SaaStr companies per year out of a $90m pool of capital. Our typical check size ranges from $1m to $5m per deal, with some seed checks of $250k-$750k.
We only invest in founders that are part of the SaaStr.com community.
Generally speaking, our ideal investment is "late seed" stage -- with somewhere between $10k and $100k in MRR, a great CEO ... but often little more. We will take 100% management team risk. We are OK if you are just figuring out sales, and your lead conversion rate isn't great. We generally prefer if the CEO is located, or at least moving to, the SF Bay Area, but having the rest of the team anywhere else in the world is a geographic risk we like to take.
We do not seek out or require "social proof" when we invest. We do not care where you went to college, or what angels are involved. We are 100% fine being the only investor in the round, and the first investor ever. We enjoy co-investing with other great SaaS VCs, but we don't require any one else to validate our investment thesis.
50% of our bet is in the CEO, 50% is in the market and early traction. We only bet in CEOs we believe will go the distance, and take the company to $100m ARR and beyond ... or wherever the future leads us. We will not invest in any company where we don't 100% believe the CEO is simply amazing. We are betting on you.
N.b. on investment stage: Once you are seeking to raise $10m or more, it's generally (though not always) too late for us. We are a Late Seed fund, not a "Series A" fund (these terms for stages of investing have gotten more and more confusing of late). If the company has not raised capital before or has been relatively capital efficient, however, we may be a good investor for some of these rounds. We still want to hear from you!
Board seats: We are "board agnostic". We do not enjoy sitting on boards or being professional board members. However, generally when a start-up raises millions (vs. hundreds of thousands), someone representing capital should be on the board. If we are the largest investor, that generally ends up being us and we are happy to do so. If we aren't the largest investor, we prefer the largest investor to play that role. Ideally, when we do serve on boards, we transition out by $10m in ARR to a role of an advisor and friend. By that point, the padawan has become the jedi. We are better off helping with PR, recruiting, promotion, etc. at that stage.
We will help you build the team. We try to help bring 1-2 key VPs and managers to each investment we make, and quickly. We’re proud to have recruiting the first VP of Sales, Controller, and VP of Customer Success to Talkdesk within 30 days of investing, for example. We can’t always do that in 30 days. But we work hard to help you quickly add a few great key execs to the team.
We are OK with wherever it goes. We only invest in founders that are better than us. But after that, wherever it takes you is fine by us. If an early exit is right for you, then that’s what’s right for you and is fine. We don’t often lose all the money on an investment, but if you’ve done your very best and that’s the way it goes, it’s OK, don’t worry about losing all our money. We know the risks, we believe in you, and we’re in it together. And if you want to go super-long, and build a generational decacorn, you’ll never get any pressure for us to sell. We want to go super-long, too. We are happy to remain a shareholder for decades.
We will deliver the next venture round, you just hit the numbers. If you hit your plan, we’ll deliver the next round investor. Our LPs include the top VCs in SaaS, and we have a very strong record of delivering next round investors.