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Revenue Doesn’t Matter (medium.com/i-m-h-o)
27 points by bretthardin on Dec 28, 2012 | hide | past | favorite | 9 comments



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...


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.


"A couple hundred grand" is what a freelancer who charges well makes in a year.


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.


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.


Corrections:

1. "Some guy" = Jason Calacanis.

2. "on Twitter" = http://blog.launch.co/blog/there-is-no-series-a-crunch.html


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.


Suggested Title: Revenue alone won't get you VC


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




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