The Ledger
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Arun Matthew: The Rule of 40 Applies Only to Public-Scale Businesses
“The rule of 40 is a measurement for public company scale businesses. And if you're at orders of magnitude below that at 10 to 15 in ARR, it's a different rule. You know, you'll never get to scale and have that sort of profitability margin at scale unless you'r…”
Smith: Accel and Sequoia totally underestimated Qualtrics' TAM
“And I think Excel and Sequoia totally shorted our TAM.”
Lemkin: VCs Love Bootstrapped Startups for Their Clean Cap Tables
“VCs love bootstrap companies. If you talk to Excel partners, one of the top VCs at all times, they'll say our favorite investments were Atlassian, right, which I think they bought 20% of, bootstrapped. Qualtrics, bootstrapped, on and on. Why do VCs like bootst…”
Arun Matthew: Accel Made One 2022 Growth Investment Versus 20 in 2021
“We've made one growth investment this year. And so one this year, wow, one this year, and that's down from about 20 from last year.”
Matthew: Under 30% of Accel Portfolio Expected to Hit 2022 Plans
“So I would say less than half of our companies are hitting original 20, 20, 22 plans. And I think by the end of the year, you know, it'll probably be closer to 25 to 30% that we're seeing across a very large sample size.”
Lemkin: Multi-stage seed without Series A preemption is a severe negative signal
“It's a huge signaling problem. Of course, if Sequoia or Accelerant recent or Lightspeed has two years of data and they don't preempt the A, of course it's a problem. Of course it's a bad signal.”
Mathrubootham: Freshworks raised $1M from Accel with $2,100 MRR
“The first round of funding when we had 70 stranger customers from all around the world, Paying us an average of 30 dollars a month, so we had 2100 dollars of MRR, but that was enough to get us a million dollar funding, and that's why I said it's a big bet that…”
Lemkin: Accel Growth made just one investment in 2022
“Accel Growth did one investment last year, 30 something the year before.”
Matthew: Accel SMB-Focused SaaS Companies Struggle with Retention Versus Enterprise
“In terms of gross retention, we're seeing varying degrees of success of gross retention across different customer segments, meaning SMB in this environment is more challenged than enterprise.
And our companies that are exposed to SMB in particular are having a…”
Founders Should Close Initial Enterprise Deals Before Hiring Sales Reps
“One of the learnings I've seen is don't rush out too quickly to go hire the expensive enterprise sales reps. Learn how to sell those early enterprise deals yourself. Cause it is illuminating from a product marketing sales support and success standpoint.”
Enterprise Inbound Interest Typically Begins at $2M to $3M ARR
“It tends to be around the two to three million dollar mark where you're getting larger logos that are starting to knock on the door. The enterprise pipeline is starting to swell”
Matthew: 1Password bootstrapped 15 years before raising a $600M round
“Iconic and Excel invested in one password, which had been bootstrapped for 15 years before they ended up. Before they ended up raising capital, you know, they raised a six hundred million dollar round over the last couple of years.”
Matthew: CrowdStrike trades at 12x current ARR and 9.5x forward
“You look at what CrowdStrike is valued at, it's valued on current ARR at 12 times. And you look at a forward number that's nine and a half times.”
Ryan Smith: Qualtrics raised from Sequoia and Accel at $350M–$400M valuation
“We raised at four hundred million dollars, three hundred fifty million dollars with Sequoia and Excel.”
Simons: Accel's $60M Atlassian secondary was its largest VC round at the time
“And the sixty million dollar round in 2010, even though it was secondary and didn't, ah, you know, didn't you know, hit the company's balance sheet. It was the single largest, ah, you know, venture capital round that Excel had done.”
Simons: Atlassian never raised institutional balance sheet capital pre-IPO
“Atlassian had been bootstrapped from the very beginning, had never raised institutional capital on its balance sheet. So we did two secondary rows, second, two secondary rounds. You know, one with Excel in, ah, 2010, and one with T. Rowe Price. In 2013.”