Revenue Doesn’t Matter

27 points by bretthardin 13 years ago · 9 comments

Reader

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...

mikegioia 13 years ago

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.
- abolibibelot 13 years ago
  
  "A couple hundred grand" is what a freelancer who charges well makes in a year.
  - mikegioia 13 years ago
    
    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.

casca 13 years ago

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.

kkowalczyk 13 years ago

Corrections:
1. "Some guy" = Jason Calacanis.
2. "on Twitter" = http://blog.launch.co/blog/there-is-no-series-a-crunch.html

yurylifshits 13 years ago

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.

jspaur 13 years ago

Suggested Title: Revenue alone won't get you VC

JacksonGariety 13 years ago

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

Settings

Revenue Doesn’t Matter

Keyboard Shortcuts