Tom Tunguz

SEPTEMBER 28, 2014

Bill Gurley and Fred Wilson have focused on burn rates as an important topic for startups. The immediate question that follows this commentary is: How much does the typical startup burn throughout its life? I use a rule of thumb to evaluate the burn rate of a Series A startup. A few patterns emerge from the data. SaaS Companies.

Startup 215

Startup Scale Sales Hiring Benchmarks 215

Tom Tunguz

NOVEMBER 3, 2021

Before, most investors used forward ARR multiples to value companies, but recently, the 100x multiple seems to be a benchmark for SaaS companies raising rounds. But the data suggests a company commanding 100x ARR is supported by the market, if the startup is in the top 5% of businesses. Where did this figure originate?

Benchmarks 362

Benchmarks Startup Metrics Enterprise 362

SaaStr

MARCH 12, 2025

With 10+ years as a CMO at companies ranging from $1M to $1B in revenue, another 10+ years as CEO of companies in the $0-$100M range, and extensive experience as an independent director on startup boards, Dave offers a 360-degree perspective on marketing’s role in SaaS success. This isn’t a generic Marketing 101 course.

Sales Hiring 202

Sales Hiring Marketing Technical Review Underperforming Technical Team 202

Tom Tunguz

NOVEMBER 14, 2022

Compared to querying PostGres, DuckDB is 80x faster & benchmarks against other systems show similarly impressive results. Because of these advantages, MotherDuck is the best place for startups to build their first Modern Data Stack. Second, DuckDB is fast. Third, DuckDB can be embedded in software.

Cloud 356

Cloud AWS Data Analysis Benchmarks 356

Tom Tunguz

NOVEMBER 8, 2017

But this figure is often meaningless for early stage startups. Because within 14-18 months, most startups will have collected concrete data about the payback periods for customer acquisition, instead of 3, 5 or 7 years for LTV observations. Faster iteration cycles are a competitive advantage. Use payback period instead.

Startup 189

Startup Forecasting Benchmarks Acquisition 189

Baremetrics

JULY 7, 2021

For every decision-maker in a SaaS company, understanding SaaS financial benchmarks makes a proper interpretation your internal performance metrics possible. All the data your startup needs Get deep insights into your company's MRR, churn and other vital metrics for your SaaS business. 2 Why use SaaS Financial Benchmarks?

Benchmarks 105

Benchmarks SaaS Payments SaaS Payments 105

SaaStr

SEPTEMBER 5, 2023

Then I started investing and I came up with a basic ruie that the best startups needed to grow at least 8% a month once they crossed $1m ARR. Is It Now “Triple, Triple, Triple, Double, Double, Double” — T3D3 — For Top Tier SaaS Startups? I realized many got there in all different amounts of times.

SaaS 284

SaaS Benchmarks Startup Investment 284

FastSpring

APRIL 26, 2022

In part one, we cover benchmarks and common churn formulas. Part I: SaaS Churn Benchmarks Part II: 5 Proven Strategies for Reducing SaaS Churn Part III: Churn Definitions and Additional Resources. Part I: SaaS Churn Benchmarks. When we set churn benchmarks for SaaS companies, there’s so much to consider.

Benchmarks 147

Benchmarks Churn Payments SaaS Payments 147

Baremetrics

AUGUST 20, 2021

We built the Baremetrics Benchmarks feature to answer these questions. We collected data from 800+ small and medium sized subscription companies using Baremetrics, anonymized it, and aggregated it to provide benchmark data for key metrics and subscription pricing. Where does the benchmark data come from? Table of Contents.

Benchmarks 97

Benchmarks Subscription Payment Features Churn 97

SaaStr

JANUARY 14, 2022

Very well for top Limited Partners (“LPs”), the folks that invest in VC funds, and give them the capital to invest in startups. The benchmark returns from VC + PE returns was a stunning 62% for 2022. Very well, indeed. And 2021 was a year like they’d never seen: 1. Wesleyan itself did 95.3%

Venture Capital 341

Venture Capital Benchmarks Investment Startup 341

SaaStr

SEPTEMBER 17, 2020

The founders named their startup JFrog because a frog is agile and always leaping forward. Yet the strategy was not to have a conventional startup. They included: Team and Culture : “In my opinion, having the right team and culture in place is the most important thing when it comes to building a startup. JFrog offered 11.6

New CTO 283

New CTO CTO Benchmarks Consulting 283

Tom Tunguz

FEBRUARY 6, 2019

Share benchmarks to calibrate your startup’s free trials. Spark conversations about new free trial tests to run for your startup. Startups targeting enterprises typically see better NDR than those targeting smaller accounts. In sharing the results, we have two goals. Let’s jump into the list.

Payment Services 279

Payment Services SaaS Payments SMB Benchmarks 279

Clouded Judgement

JUNE 19, 2024

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., net retention and CAC payback).

Cloud 318

Cloud GCP(Google Cloud Platform) Software Azure 318

Tom Tunguz

JULY 21, 2024

As software startups begin to sell agentic systems, the procurement process will change. All of these benchmarks are machine-generated : HumanEval & HumanEvalFIM are not human testers - but open-source projects that evaluate AI code. Startups - as they always do - will find ways to accelerate the evaluation.

Sales 206

Sales Machine Learning Artificial Intelligence Generative AI 206

SaaStr

MARCH 31, 2020

Bill Gurley’s answer to How much money did Benchmark capital lose on Webvan? More on the math here: What has a higher chance of making you money, being a venture capitalist or a startup founder? With venture capital investments that fail, is the problem most often with the entrepreneur or was it a bad investment by the VC?

Investment 264

Investment Venture Capital Benchmarks Startup 264

Tom Tunguz

JUNE 7, 2022

In one sense, yes, because on a particular day, a collection of employees no longer work at a startup. Consider the average annual employee attrition in a startup ranges between 13% and 25%. When I read about a 10% reduction in staff in the press, I don’t consider it an indicator of a startup’s health.

Benchmarks 225

Benchmarks Startup Business 225

SaaStr

MAY 25, 2023

So ChartMogul pulled together some nice data and statistics across its 2,100 SaaS customers and users for its 2023 Benchmarks report here. My favorite hart is this one, that tracks how Top Quartile SaaS companies have grown the past few years: What it shows it what we all sort of know, but puts specifics on.

SaaS 246

SaaS Benchmarks Startup Pricing 246

Kellblog

MARCH 1, 2025

You might argue that’s a good overall marketing efficiency metric and try to benchmark it. But those benchmarks will be hard to find. While relatively few startups break their CAC ratio in two parts, virtually every startup already calculates CAC ratio or CAC payback period (CPP). It’s more standard.

Sales Hiring 72

Sales Hiring Benchmarks Metrics Startup 72

SaaStr

AUGUST 9, 2021

Stop Selling Like a Startup. If you don’t have the proper security and legal benchmarks in place, you can drastically slow down your sales process. Says Sindicich, “When you’re a startup or trying to go upmarket, you oftentimes involve the founders or the CEO, and that can totally slow your deal down.

Scale 293

Scale Sales Hiring Enterprise Sales 293

Tom Tunguz

OCTOBER 7, 2019

Startups are able to raise larger early rounds because of the financial environment. As I’ve written about before, there’s now a continuum of financial products available to startups at the early stage. These numbers would be more extreme if benchmarked to 2014. Those were the most popular.

Marketing 247

Marketing Benchmarks Trends Startup 247

Tom Tunguz

OCTOBER 28, 2017

Normally, accounting changes are not that interesting, but ASC 606 will change several of the key attributes and benchmarks SaaS startups use. Second, sales efficiency can no longer be calculated using the P&L, or the benchmark will change, since the quarterly S&M expense has changed. I am not an accountant.

Revenue 223

Revenue Benchmarks SaaS Finance 223

SaaStr

SEPTEMBER 23, 2022

To illustrate the turbulence, consider the following metrics: The BVP NASDAQ Emerging Cloud Index (the public benchmark of software performance) has contracted by more than 40%. The next generation of SaaS startups is switching things up by leaning into indirect monetization, powered by a wave of fintech building blocks.

Cloud 304

Cloud Benchmarks Trends Business Model 304

Casey Accidental

JUNE 9, 2020

BONUS: Why are Casey’s benchmarks for consumer transactional businesses lower than others? . * In those businesses, the business failing and churning as a result is called “involuntary churn”, though that can also mean a payment method not working for someone who wants to retain in other models.

Retention 145

Retention Benchmarks Payments Payment Methods 145

SaaStr

AUGUST 19, 2023

While Sequoia, Benchmark, Founders Fund, etc. Not Just Billion Dollar StartUps. Dear SaaStr: What are The Top Challenges of Venture Capital Firms? Generally there are three major challenges. The first one is non-obvious. Challenge #1: Raising Another Fund. At a minimum, it’s something they think about all the time.

Venture Capital 246

Venture Capital Benchmarks Investment Startup 246

Kellblog

JULY 29, 2021

In this fast-paced episode we move through topical discussions of the major SaaS metrics followed by investors and operators alike, and look at the size-segmented benchmarks presented in Ray’s 2020 B2B SaaS Metrics report.

Benchmarks 134

Benchmarks B2B Metrics SaaS 134

SaaStr

MARCH 17, 2020

Pendo announced a new offering aimed to help startup companies accelerate product-market fit, and prove that product traction to early stage investors. Learn how Pendo can help companies go from startup to scale-up here. For major launches across Zendesk’s product offerings, check out www.zendesk.com/startups. Blissfully .

Sales Hiring 233

Sales Hiring Scale Payment Features Marketplace as a Service 233

SaaStr

SEPTEMBER 20, 2023

Discover Bessemer Venture Partners’s annual State of the Cloud report, going through trends, benchmarks, and metrics that underpin the Cloud economy. So they came up with a North Star benchmark, used it as a hurdle rate by channel, and any channels that hit that benchmark would justify a continued investment.

Cloud 306

Cloud Payments Software Review Payment Solutions 306

Unbounce

JULY 6, 2021

The early days of your startup will set the stage for your brand authority and awareness. We’ll help you tackle one piece of the branding puzzle with advice on building a startup landing page. Let’s cover the main goals of a startup landing page and must-have elements to include. What Should Your Startup Landing Page Accomplish?

Startup 142

Startup Software Review Technical Review Branding 142

SaaStr

NOVEMBER 5, 2021

Because it can be gamed a bit, and because even small differences can dramatically impact your burn rate, I see the #1 issue is startups burning way more than they expected even with a 1.0+ And IVP has published some data to help you benchmark it. It can be gamed. As you can see above. Magic Number. Still, it’s a core metric.

Scale 293

Scale SaaS Acquisition Benchmarks 293

SaaStr

FEBRUARY 9, 2022

And when employees, press, later stage investors, and more are deciding which startup to join, to cover, and to invest in … having a strong brand on the cap table does help. Getting Sequoia or Benchmark to lead your Series B or C is just as valuable for your brand as leading an earlier round. The world has changed however.

Branding 283

Branding Benchmarks Cloud Investment 283

Tom Tunguz

SEPTEMBER 4, 2024

Some teams will want to benchmark systems in parallel to determine the relative performance. With most startups building atop existing models & setting aside differences in fine-tuning, the ultimate performance should be relatively comparable, provided they use the same data sets.

AI 191

AI VPCs (Virtual Private Cloud) Benchmarks Interviewing 191

Chart Mogul

MARCH 1, 2023

See chapter 2 in the report to learn more about net retention benchmarks. As startups grow and find product-market fit, net retention improves. When benchmarking, always keep the stage of your business in mind. This trend of retention being lower in 2022 vs. 2021 is not unique to SaaS startups and scaleups.

Benchmarks 98

Benchmarks Retention B2C Business 98

SaaStr

MARCH 24, 2021

In his highly informative session, Tomasz Tunguz, the Managing Director at Redpoint Ventures, shares the essential benchmarks you need to track your company’s valuation and where to look to make improvements. The truth is all startups are valued as growth companies. Revenue Design: Valuing a Software Company.

Metrics 274

Metrics Banking Benchmarks Investment 274

Sales Hacker

NOVEMBER 8, 2024

Here’s how to drive early value effectively: In-product value Measure TTV : Set a quantifiable benchmark for how long it should take a new user to reach their first “aha moment.” Startups to watch Owner – overall demonstrating tremendous growth with another “double double” month, at double digits ARR.

Scale 113

Scale Sales Recruiting Sales Hiring AI Search 113

Tom Tunguz

MARCH 24, 2024

Technology hadn’t reached the level of sophistication we have attained today where AI is 90% as capable as a high-school student, the MMLU benchmark for AI is precisely this. The next generation of software startups have a strategic question with different terminology & potentially a different conclusion. more productive.

AI 182

AI Software Engineering Benchmarks Startup 182

ChurnZero

JUNE 2, 2021

SaaS Capital joined us for a webinar to share the results from their 10th annual B2B SaaS benchmarking survey. They just need to be aware of it and that’s why this kind of thing is helpful with the benchmarking data that you can compare. How does your company stack up to its peers in this regard? But it’s harder going.

Benchmarks 98

Benchmarks B2B SMB SaaS 98

The Angel VC

JANUARY 10, 2017

So if you want to raise capital for your SaaS startup in 2017, investors will wonder if you can become a true system of record, build a real platform/ecosystem/marketplace or build a unique data asset over time. The latter option will get particular attention this year, so I highlighted that in the "Defensibility" row of the napkin.

SaaS 262

SaaS Marketplace as a Service Machine Learning Artificial Intelligence 262