The Ledger
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why aren't all 13 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Alter: Later-stage investors want line of sight to 20-30% FCF margins
“Many investors, particularly at later stages, want to see a line of sight to 20 to 30% free cash flow margins.”
Alter: Granular command of imperfect metrics positions founders well to fundraise
“What the big takeaway from this presentation should be is that it's not just the metrics themselves that matter, but it's your command and your control of these metrics that will make a big difference. And it's pretty empowering because nobody will have perfec…”
Alter: Reaching $1M ARR within one year post-launch is very good
“So from one year after launch to get to one million in ARR would be considered very, very good. Nine months is excellent. This is from launch, not after incorporation.”
Alter: T2D3 growth is considered best-in-class after reaching $1M ARR
“And then after that, triple, triple, double, double, double is considered best in class. But again, I want to emphasize that all of this should be taken in conjunction with the broader picture on metrics.”
Alter: A 1:1 ratio of net new ARR to burn is excellent
“And I think one of the most interesting metrics to track with burn is just your net new ARR divided by your burn. And some people do it the other way around. They do your burn over your net new ARR. Generally speaking, around one is considered very good.”
Alter: High NDR with low GDR signals selective product-market fit
“What that tells an investor is that some of your customers are doing exceptionally well with your software. They're upselling in a massive way. But others are not having product market fit at all, and they're falling off. This is really good to know. It's a pr…”
Alter: Show cohort retention only after major timestamped product changes
“For enterprise software businesses, I recommend that you show cohort retention, cohort based retention, if you've had time stamped changes. So for instance, let's say you made a big change to your product in September of 2020, and after that change, you've see…”
Alter: CAC payback and 3-year LTV-to-CAC are top sales efficiency metrics
“The two most important ones are CAC payback period in months, and three year LTV to CAC.”
Alter: Vertical SaaS companies gain unfair sales efficiency from tightly networked word-of-mouth
“And this is one of the advantages of vertical SaaS businesses in general. They have a really defined sales universe where people talk. So they got a couple of key logos using their platform, and then all of those businesses went and told all their other friend…”
Alter: Combining gross dollar and logo retention is criminally underrated
“Having these two together is absolutely crucial, in my opinion, and it's criminally underrated. You would be really surprised how few people ever cite this metric when I think it's one of the key underlying drivers of business health.”
Alter: ARR should represent at least 80% of enterprise ACV
“On the first, I'd say 80% plus would be a good benchmark. Anything below that there should be a really clear reason or a really clear understanding for why that is the case.”
Alter: Investors value non-SaaS revenue if not falsely labeled as ARR
“I don't think anymore that investors are so myopic That they're only valuing companies based off of ARR. You will get credit for those alternative streams of revenue as well, but it's important to clearly label it and not try to make it into ARR when it's not …”