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Should SaaS companies trade at a 24x Enterprise Value (EV) to Next Twelve Month (NTM) Revenue multiple as they did in November 2021? Across more than 10 years we have kept the size of our Seed investments between $2–3.5 By 2021 we had to write a $3.5m How Does the Industry Really Work? This translates to about 12–15 investments.
Consequently, Jeff is a big believer in B to B opportunities or SaaS platforms, like Jeff’s own Leads 360. Although the first draft of this post began when Kluge was a proud member of NextSpace; as of this writing we have moved to a bigger office to accommodate our expanding team. Unwinding at an Amplify party.
Brad was openly writing about this and it felt like he was giving the VC playbook away for free! We write about $40 million of first-checks into new deals / year and about $40 million of follow-on investments. Of course a group of 10 seedfunds can’t fix the prices of a market. But let me be even more clear.
Consequently, Jeff is a big believer in B to B opportunities or SaaS platforms, like Jeff’s own Leads 360. Although the first draft of this post began when Kluge was a proud member of NextSpace; as of this writing we have moved to a bigger office to accommodate our expanding team. Unwinding at an Amplify party.
I’m over-paying for every check I write into the VC ecosystem and valuations are being pushed up to absurd levels and many of these valuations and companies won’t hold in the long term. Because to invest at a $60–80 million pre-money valuation (or even $40–50 million) before there is enough evidence of success requires a larger fund.
This is why investors really like SaaS software companies where you have recurring revenue and your largest customer accounts for < 5% of your revenue and your renewals rates are > 90%. If you have raised a limited amount of money from angels, accelerators or seedfunds be very careful about having a high burn rate.
SaaS 101: 7 Simple Lessons From Inside HubSpot - OnStartups , July 19, 2010 It’s been a little over 4 years since I officially launched my internet marketing software company , HubSpot. So, I’ve had about 4 years on the “inside” of a fast-growing, venture-backed B2B SaaS startup. I got a taste of that within my first weeks on the job.
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