Oct 29, 2021 · 30m · saastr
The SaaS Org Chart by Series with David Sacks, Co-founder and General Partner at Craft Ventures
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
David Sacks presents a comprehensive framework for structuring SaaS organizations across Series A, Series B, and Series C stages, detailing optimal headcount benchmarks, departmental ratios, and leadership hierarchy transitions.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Jason as informed peer 0.0 Guest teaching 0.0 Guest disagreement 0.0 Jason pushing back 0.0
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 9:00 Rejecting domain expert hiring in sales
Sacks directly disputes the common founder misconception of hiring domain specialists instead of proven salespeople, firmly asserting that sales talent cannot easily be taught late in a career.
Hardest push from Jason ▶ 3:30 Critique of inefficient management span of controlIn a solo lecture format without host interventions, the sharpest pushback comes from Sacks calling out improper management ratios, asserting that one manager for every two reports makes no sense.
Biggest teaching moment ▶ 1:47 Teaching ARR-to-headcount ratiosSacks educates founders on benchmark operating metrics, demonstrating how ARR per employee scales from $25,000 at Series A to $100,000 at IPO.
Jason holds their own ▶ 16:50 Citing real Yammer operational dataIn place of host dialogue, Sacks demonstrates deep domain authority by explaining how he derived benchmark headcount ratios directly from Yammer's historical org chart and Craft's portfolio data.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Key Heuristics and Headcount Ratios for SaaS Scaling | 0 | 0 | 0 | 0 | David Sacks delivers a solo presentation breaking down key headcount-to-ARR heuristics across SaaS funding stages. Host Jason Lemkin is absent from the audio during this monologue segment, resulting in zeroed host-interaction scores. | |
| Structuring the Series A SaaS Organization and Initial Functions | 0 | 0 | 0 | 0 | Sacks explains the functional architecture of a Series A company, detailing why product should report to the CEO and warning against hiring domain experts over sales experts. The segment is an uninterrupted solo lecture. | |
| Scaling to Series B: Transitioning from Individual Contributors to Teams | 0 | 0 | 0 | 0 | Sacks walks through the Series B transition where individual contributor roles turn into dedicated teams requiring mid-level management. As a continuous solo conference talk, there is no host pushback or dynamic sparring. | |
| Series C Expansion: Executive Layering, Specialization, and International Growth | 0 | 0 | 0 | 0 | Sacks concludes the presentation outlining the Series C stage, focusing on layering VP and C-level executives, international expansion, and acquiring companies. The format remains a pure keynote presentation without host participation. |
Statements from this episode (13)
Sacks: Series A SaaS startups should target roughly 50 employees
“Typically, the Series A company is around 50 employees. That doesn't mean you're at 50 at the time you raise the Series A round. It's usually what, that's the target, that's what you're trying to get to.”
Sacks: Craft Ventures Series A startups typically have 10 to 20 employees
“Most of the companies, when we, you know, write a Series A term sheet, they're in the, I'd say, 10 to 20 employee range. And they're looking to sort of roughly double, you know, in size over the next, say, six months.”
Sacks: SaaS target headcounts are roughly 125 for Series B, 400 for Series C
“Series B, again, that's more of a target, about a 125 employees. Series C, about 400.”
Sacks: Average SaaS Company at IPO Has $100M ARR and 1,000 Employees
“We know based on publicly available data that that at IPO, that the average sort of SaaS company at IPO has about a thousand employees and about a hundred million of ARR. So that ends up being about a 100,000 dollars of ARR per employee, and we can kind of wor…”
Sacks: Scaling SaaS Companies Should Target 50% S&M, 40% R&D, and 10% G&A
“About 10% of your organization should be G&A. About 40% R&D and 50% sales and marketing. You can see that on either a, sort of a dollar cost basis or on a headcount basis. Either way, that should roughly work.”
Sacks: SaaS Companies Need One Manager for Every 5 to 10 Reports
“For every five or 10, somewhere between five and 10 employees, you do need a manager. Like a really lean organization would have, say, one manager for every eight to 10 employees, and, you know a sort of a less lean organization might have one manager for ever…”
Sacks: Product heads should report directly to CEO, not CTO
“I think it's important for the product organization, even though it's very small, to report directly to the founder CEO. Sometimes I see it tucked Under the CTO, and obviously that can work too, but I feel like it's a better way for the founder to stay involve…”
Sacks: SaaS companies need one PM and designer per 5-10 developers
“You want to have, you know, one PM for every five to 10, you know, developers, and you're going to have, by this point, by about a 50 person org, you're going to have a couple of designers. And again, that same sort of ratio, in that five to 10 developer range…”
Sacks: Always hire proven sales experts over domain experts
“They always make the mistake of choosing the domain expert. I would say you should almost always choose the sales expert. A good salesperson, a good AE will learn your product, will learn your market. That's what they've done their whole careers. Trying to tea…”
Sacks: Use 'Head of' titles at Series A to retain flexibility
“One thing you'll notice here is that I've called the heads of a lot of these departments head of sales as opposed to VP of sales or chief revenue officer. The reason for that, I find this works with a lot of my series A companies, is they're not sure if that p…”
Sacks: Aim for at least 50% internal promotions for mid-level managers
“I am a big fan of promoting from within whenever possible. You probably want at least 50% of these management roles to be promotions when they can be.”
Sacks: Series C startups must hire a VP of Engineering alongside founding CTOs
“By this point, you're absolutely going to need a VP of engineering. This is somebody who helps the CTO with the actual managing of the organization. You know, it's pretty commonly the case that the co-founder or CTO is chosen because of their technical chops a…”
Sacks: Analyst relations is an underappreciated role for Series C SaaS companies
“You're going to have one or two people doing AR, which is analyst relationships. I think this is actually kind of an underappreciated role for, if you're at twenty million of ARR, if you're at the Series C stage, you really want to be trying to convince the ma…”