Episode 729 | 9 Things I've Learned Investing in 170+ SaaS Companies

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Sep 3, 2024

In this discussion, insights from over 170 SaaS investments reveal critical patterns in survivability and valuation. Niche markets, particularly vertical and orthogonal SaaS, are highlighted for their growth potential. The emotional landscape of entrepreneurship is examined, especially how acquisition offers can complicate decision-making. Additionally, there's valuable advice for founders facing strategic challenges, including co-founder disputes and funding options. For more in-depth strategies, listeners are encouraged to check out additional resources online.

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INSIGHT

SaaS Survivability

B2B SaaS businesses demonstrate high survivability, especially with traction.
TinySeed's portfolio shows a low failure rate (around 2%) over five years.

INSIGHT

SaaS Value

SaaS companies are incredibly valuable due to recurring revenue and growth potential.
Adding $1,000 MRR can increase a company's value by $60,000 with a 5x multiple.

INSIGHT

Vertical and Orthogonal SaaS

Vertical and orthogonal SaaS companies often face fewer headwinds than horizontal SaaS.
This is because they target niche markets and avoid large competitors.

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In episode 729, join Rob Walling as he shares insights from the 170+ SaaS investments he’s made through his B2B SaaS accelerator, TinySeed. Key patterns include the survivability of SaaS, the lucrative value of these companies, and commonalities across the ones that grow the fastest. To see even more patterns that didn’t make this episode, be sure to check out the MicroConf YouTube channel.

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Topics we cover:

2:24 – Survivability of B2B SaaS in TinySeed
4:09 – SaaS is extremely valuable
8:26 – Vertical and orthogonal SaaS face fewer headwinds
12:36 – A supermajority of TinySeed companies want a big exit
15:51 – TinySeed founder count aligns with the broader MicroConf ecosystem
17:04 – Ruined cap tables have prevented deals
19:35 – A quarter of TinySeed companies raise subsequent fundraising
21:17 – Common advisory topics: pricing, plateaus, cofounders, funding, selling

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If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!

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