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    Startups CEO asking me to stay for 6 months to get company to an exit, what questions should I be asking?

    February 23, 2022

    Startups CEO asking me to stay for 6 months to get company to an exit, what questions should I be asking?

    CEO asking me to stay for 6 months to get company to an exit, what questions should I be asking?

    Posted: 23 Feb 2022 07:55 AM PST

    I recently accepted an offer at a different mid-stage startup with several unique characteristics that make it impossible to find a comparable opportunity for me and my family.

    Current role is a Jack-of-all trades, right hand to the CEO, have been here for 5 years (since seed stage funding) but I'm not a founder. I do have 1% equity. We had a decent valuation at our B round but we've stalled and it feels like I'm stuck holding the company on my back while we limp along. We are B2B SaaS and I have managed all of our revenue and am the technical expert for the product.

    I gave my notice to the CEO after I'd accepted another offer and he's throwing a large retention bonus (50% of my annual comp) at me to stay on for 6 months to get us to an exit. He needs me to be the face for any acquirer who would evaluate us and feels like my leaving will decimate morale across the team. We are only 28 people and have been dealing with attrition.

    Current situation is not quite a dumpster fire, we are over $2M in revenue with some large household names as our customers, but I don't see a great exit happening. If we exit at or below our last valuation, do I even get paid out? CEO said he's putting me in the "management carve out %" so I would get paid out my 1% for ANY acquisition amount. This could be a significant amount for me at my career stage but I don't know that it's feasible.

    I've got calls scheduled with a few of our board members today as they are trying to keep me onboard for 6 more months.

    CEO believes the company would die without me here to take us to the exit. I'm not good at taking advantage of these situations, I try to be fair, but I have the leverage. I don't need the financial windfall but of course it would be nice to have. I also really want to move on, and the new opportunity will not wait 6 months so I'd have to burn that bridge and find something else once the current role wraps up.

    What questions should I be asking the CEO and the board? What can I get in writing that protects me and my interests?

    submitted by /u/atlvet
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    How to cater to enterprise customers

    Posted: 23 Feb 2022 01:23 AM PST

    I was in enterprise sales for the last 4 years and I want to document my main learnings here:

    ​

    Enterprises are different - very different from SMBs. The points below are a list of things I learned over the course of 4 years selling a SaaS software to enterprise corporates.

    1. First of all, forget low-touch software. Enterprises need attention. A lot of it. Sales cycles are long, they will not use your trial, they need a demo. Multiple demos. Make sure to invest your time here.
    2. Enterprises however are aware, that your time is valuable - and if they buy your solution, they will pay accordingly. Make sure to price your solution high enough. Be clear about your value - and than set the price according to that value. And I'm talking here big-money. I've not seen ANY software for enterprises which should be priced lower than 10k€ per year. Better 50k€. I've seen a form to pdf converting solution - this is worth 50k€ for an enterprise. The save hundreds and hundreds of hours with that - always think about it that way: They have a lot of people who can waste time. If your solution saves only some minutes - for a lot of people - it's a lot of minutes. So, if your solution is less than 10k€ you are most likely too cheap.Last point to make here: Enterprises don't trust cheap solutions - would you be willing to trust a software to convert all your valuable form to pdf for only 599€?
    3. Additionally, make sure to cash in on their willingness to pay for adjustments and professional services. Enterprises KNOW, that your solution is not perfect for them (because they think they are such precious unicorns ;-) ) - therefore they KNOW that you will need to adjust your solution - and again, they are fair and will pay you accordingly. Enterprises are really so willing to pay for services - it's crazy. A small integration project for 75k€? No problem (really, not joking!)In general, selling services is oftentimes easier than selling the software itself. I've seen it's sometimes better to have a little lower price for your software (<15k€) but monetize the services.
    4. There are a ton of stakeholders. In modern sales theory it's 7 decision makers. Make sure to find all of them - some of them hide in your meetings but then kill your deal in the background.In my beginning I always tried to reach CEO/CTO type of targets - and even managed to get to them. I sold them on my solution - just to get my proposal refused the day after. Why? Because the Head of IT was against my solution. Of course he was - I did not even invite him to the Demo.In general, the most challenging stakeholder I found was the IT department. Make sure to highlight what specifically the IT department can gain from using your software. This is a must. Even if you sell HR software, the IT department might kill your deal, if they don't like your solution.
    5. Some features are a must for Enterprise sales. As mentioned - if you don't have them, not a problem. Tell them you are aware that they are needed and you will implement them for only 50k€. Again, I've done that, it worked without a hassle. They are happy, that they have somebody who they can contract.Features you absolutely need (or at least are super helpful: Some sort of Role based access control, MS/Azure Active Directory integration with SSO, Security whitepaper, most probably integrations of some kind to their business systems, SLAs, some sort of change/update management and if somehow possible, audit logs.
    6. You need to be honest to them - about anything. They will make their due diligence, be assured. Do you have bad infrastructure? Tell them - they can help you to improve that. Do you have performance problems? Tell them, they will pay for faster servers. And most importantly: Are you a small team: Tell them. In the beginning we were 4 people - that was never a problem at all. I'm sure it would've been a problem, if I told we were 50 people and they found out, that our operations-base was my mums cellar (it wasn't ;-) )
    7. Speaking of pricing: Make sure it's easy. As I said - be expensive (you are most probably too cheap anyhow!!) - but be easy. Don't try to outsmart them by having a hidden scaling cost component or something like that.Furthermore, a proven SaaS strategy is, to start "cheap" (like 50k€) and have a veeeeery scalable component in your pricing - openly presented in the demo and the offer. We either had users (additional 5k per user - now that I think of it, I was too cheap...) or if we recognized, that they absolutely hate user-based pricing, we switched to a "per use" metric. Because you can be sure: If your software is any good, it will be used. Thousandfold.
    8. Do trainings. Tons of trainings. Enterprises love training. Price your trainings again 10k€ per training. 5k per day is really normal!It brings revenue - and furthermore Enterprises don't teach themselves. If you leave them alone after the sale, they will not scale - and you will also not scale (see point 7 for further details)
    9. It... takes... long.... Enterprise sales need a long time. In my industry, the average sales cycle was 18 month!!!! 18 month... So make sure you have enough runway - or alternatively as we did, we had a "low-touch" variant of our solution which we were selling to SMBs in the meantime - to get some money in while we were working on all these enterprise guys.

    Summary: In a summarized sentence, Enterprises are a lot of work. A loooot of work. However they pay unequally good. I know, I repeat myself, but charge MORE, you are too cheap ;-)

    What are your takes on enterprise sales?

    submitted by /u/themusician985
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    Are incubators useful ?

    Posted: 22 Feb 2022 09:09 PM PST

    Hello,

    I went through an accelerator and after that joined an incubator but unfortunately covid happened and we had to leave so I don't really know if an incubator is useful or not. Also online there's this trend of how you don't need incubators.

    Would appreciate if y'all can share your knowledge and experiences!

    submitted by /u/FixComfortable7460
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    My team sometimes say I'm demeaning in meetings at times without me realizing it

    Posted: 23 Feb 2022 06:48 AM PST

    My team/employees sometimes say I'm demeaning in meetings at times without me realizing it. I don't mean for this to happen since sometimes I'm just questioning what they brought up.

    I run a crypto startup where things can get stressful at times due to our demand and speed of execution.

    How do I get better at identifying this?
    I don't want to make people feel bad, but I still need to give feedback on their ideas

    submitted by /u/tensor_x
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    Stock Options vs Vested Equity

    Posted: 23 Feb 2022 12:39 PM PST

    My company offers me 2 options to get the equity : 1) 5% vested in 5 years 2) stock options 1% per year bought using a part of my compensation at a constant valuation (seed stage).

    In both cases, the total equity and my compensation will be similar.

    I heard the equity I get from option 1 will be diluted once we raise funding but not in option 2. Is it correct?

    If it is, the option 2 looks better, but I don't really understand how it works.

    Thanks!

    submitted by /u/Creative-Mark-54
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    Non-programmer co-founder & CEO for a programming-tools company?

    Posted: 23 Feb 2022 06:53 AM PST

    Me and a colleague have been looking into several startup ideas for the past few months.
    Eventually ended up being focusing on building a next-gen developer workflow tool.
    The problem is that my co-founder & CEO-to-be is a marketing and sales person, she's never written code in her life. OTOH, she did co-found and has taken two companies to mini-exists.
    I like working with her. We work well together and amplify each other's strengths. But have some concerns:

    1. Would she be able to sell, market, and grow a company in a field she does not have intimate, first-hand knowledge in?
      I am not sure she can sell the product to a programmer who's a potential user and is the target of the product.
      Do you guys think this is a show-stopper?
    2. I can see how she would have a lot of work to do once there's a product ready - finding beta-sites, running the company, building the management team, marketing, outreach, conferences, etc... - But - I would love to get some feedback regarding what would her role be in the first 6 months before the beta product is ready?
      The only thing I can think of is setting up meetings with VCs (which I can do just fine alone). anything else? ... and would a VC that's investing in dev-tools would be accepting to have a non-technical non-programmer CEO leading a dev-tool company?
      I would love to get the community input, especially from people who went through a similar decision/setup in their startups.

    Thanks for your help!

    submitted by /u/guytv2017
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    Any startups here accept low income individuals? How do you verify?

    Posted: 22 Feb 2022 08:04 AM PST

    I have a service I operate in Michigan, and I'm looking to add a discounted rate option for low income families and individuals - also military benefits.

    My question is how can I verify if someone is truly low income to avoid someone who was low income at one time, no longer are, but still claim to be. I know other programs for example the Emergency Broadband Benefit program offer a discounted rate on your broadband bill by verifying you are on an assistance program such as SNAPs. There must be some sort of API or hotline service to check if applicants are still active on assistance programs.

    Anyone have any advice or previous experience with this?

    submitted by /u/FitzDude
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    Examples of barriers of entry

    Posted: 23 Feb 2022 01:42 AM PST

    Hey guys, need help.

    I am working on some validation criteria for few specific software products and the core approach for this task is following "If the product wants to scale, elimination of barriers of entry is critical, so that new users can adopt the product just by recommendations from other members in their community".

    Here is what I already encountered on the websites of some of the products I am evaluating:

    - UNCLEAR MESSAGING about what the tool does (instead there are some dumb cliché marketing phrases that say nothing) - you can't decide if the tool is what you are looking for

    - NO PREVIEWS of the product experience (UI screenshots, videos,...) - you can't decide if the tool practicality is worth the transition from your current tool

    - PRICING is confusing or not exposed at all - you can't decide if using the product is in your price-range

    - NO TRYOUT - there is no risk-free demo, trial or free package to try using the product without unnecessary commitments (credit card submission, lengthy registration forms, "contact us", "schedule a demo", etc.. )

    Could you name specific mistakes you see startups doing that result in creating unnecessary barriers preventing adoption by users? Or the opposite - specific things you see smart startups doing to enable user to recognize the value and adopt the product without friction.

    Thanks for any help.

    submitted by /u/that_stanley
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