So what does it take to raise money for a SaaS company in 2016? With constantly rising table stakes and a fundraising environment that looks quite a bit less favorable than last year’s, I believe the bar is higher than in the last 18-24 months (although raising money is still much easier than it was in “Silicon Valley’s nuclear winter” in 2008).
Below is my back of a (slightly bigger) napkin answer to this question.
A few important notes:
- The assumption of the information in the table is that the founding team is relatively “unproven”. Founding teams with previous large exits under their belts can raise large seed rounds at very high valuations on the back of their track records and a
- Some of the information is tailored to enterprise-y SaaS companies. If you have a viral product (like Typeform or infogram), some of the “rules” don’t apply.
- If you have virality and a proven founder team, you’re Slack and no rules whatsoever apply. :)
|(click here for a larger version)|
PS: Thanks to Jason M. Lemkin, Tomasz Tunguz, Nicolas Wittenborn and my colleagues at Point Nine for reviewing a draft of this post!
[Update 1: Here's a mobile-friendly version of the napkin.]
[Update 2: And here is a Google Sheet version for better readability. :) ]