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Startups For the Rest of Us

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

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.
25:27

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Quick takeaways

  • B2B SaaS companies demonstrate remarkable resilience, with only about 2% shutting down, indicating the effectiveness of investment selection in this sector.
  • Vertical and orthogonal SaaS companies outperform their horizontal counterparts by targeting niche markets, leading to lower churn rates and higher exit multiples.

Deep dives

Low Failure Rate of B2B SaaS Companies

B2B SaaS companies exhibit a notably low failure rate, particularly among those funded through TinySeed. Out of over 170 investments, only approximately 2% have faced shutdowns, showcasing the resilience of this business model once it achieves traction. This contrasts with traditional venture capital, which often encounters much higher failure rates. The data suggests that the careful selection of companies for investment has led to a higher success rate among B2B SaaS enterprises.

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