If you want to break even, go for APE.
Cloud companies generally rely on efficiency metrics like CAC payback and LTV-to-CAC, but “they feel more like financial than operational, and it’s hard for employees to execute on these concepts,” said Neeraj Agrawal, Brandon Gleklen and Jack Mattei of Battery Ventures.
Using data from Capital IQ and Battery research, this post includes key benchmarks for public companies and private SaaS companies, along with recommended targets for companies with different ARR ranges.
“APE is an extremely simple metric that we believe can serve as your pole star as you navigate these volatile times.”
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This metric isn’t a panacea: APE varies by geographic region and other benchmarks, such as a company’s gross margin or forecasted growth rate.
“Achieving higher APE earlier in the maturity cycle is likely a net positive,” they write. “Overall, we believe a $200,000 target will serve most mid- and late-stage growth companies well.”
Please note, this is not a one stat to master them all piece of thinking leadership.
as Gleklen joked on Twitter: “You’ll only write about a metric in a blog post if you’ve discussed it with multiple management teams and you’re getting consistent feedback that it’s valuable.”
Thank you very much for reading,
Editorial Manager, londonbusinessblog.com+
The secret of good reference checks for potential employees
I’ve hired enough people to understand that cognitive dissonance and confirmation bias are endemic when it comes time to check a candidate’s credentials.
Teams tend to hire candidates who have passed multiple interviews, but checking references shouldn’t be a pro forma exercise.
Haje Jan Kamps shares six questions he asks during reference conversations that ‘will get a good conversation going’, along with some tips on what to listen to.
Learning from my failures: lessons from a two-time founder
All glee aside, learning from our own mistakes is helpful, but learning from someone else’s is optimal.
Squadhelp CEO and founder Darpan Munjal closed his previous business, a fashion e-commerce venture, after four years of ‘solid growth’. In retrospect, he says early-stage funding created a false sense of security.
“It wasn’t easy closing the shutters on a company I truly believed in. But I knew I could start over if I was willing to learn from my mistakes and apply those lessons wisely.”
4 Principles Private Equity Companies Should Use to Win the Talent Show
My startup experience was focused on operations, so the world of venture capital is still a black box to me in many ways.
I was surprised to learn that private markets are so vast: by one estimate, alternative assets under management have a compound annual growth rate of 9.8%, much higher than inflation or GDP. By 2025, the AUM pool will exceed $17 trillion.
Keeping people in private capital isn’t easy: new hires have to wait years before they can earn carry interest, and a notoriously opaque reward system doesn’t promote loyalty.
“Between salary, bonus, vesting, transferred interest and ownership of the management company, it can be nearly impossible for employees to know where they stand financially,” said Richard Change, co-founder and managing partner of PFA Solutions.
Pitch Deck Teardown: Simba Chain’s $25M Series A Deck
While londonbusinessblog.com didn’t cover Simba Chain’s $25 million Series A blockchain startup, the company still shared its winning presentation with TC+.
“My disdain for blockchain technology will almost certainly be reflected in this teardown,” writes Haje Jan Kamps, who says the 19-diadeck is “incredibly impressive and covers a lot of ground.”
In a down market, good coverage is not enough for managing international teams
Talent is spread all over the world, which means that startups that don’t respect cultural differences are chasing themselves.
With many companies in the throes of cost cutting, it’s critical to follow local laws and social norms when it comes to firing employees, according to John S. Kim, CEO of Sendbird.
After leaving two startups with international teams, he has written a TC+ guest post to help founders communicate with employees in turbulent times.
“A company not only has a responsibility to keep employees informed about what’s going on, they also have to do it in a way that best suits their respective audiences.”
Dear Sophie: What should we know about the H-1B lottery before hiring VOTE OPTs?
What should I and my founding team at our startup pay attention to early on so we can be on track for the next H-1B raffle for the STEM OPT candidates we are recruiting?
— Strong strategist
- 1 The secret of good reference checks for potential employees
- 2 Learning from my failures: lessons from a two-time founder
- 3 4 Principles Private Equity Companies Should Use to Win the Talent Show
- 4 Pitch Deck Teardown: Simba Chain’s $25M Series A Deck
- 5 In a down market, good coverage is not enough for managing international teams
- 6 Dear Sophie: What should we know about the H-1B lottery before hiring VOTE OPTs?