VCs are scared when they should be greedy

Re:VCs are scared when they should be greedy by lurkervizzle on Wednesday July 20, 2022 @05:48PM (#32172869)

Specific anecdote - SaaS companies selling to other SaaS companies is going to cause a mini-winter in that sector. My company (which we thankfully sold last year :praise) had several (though not exclusively) high-growth tech companies as customers.

Now, when I look at layoff announcements, I see a lot of our former customers. Additionally, with budget freezes (driven by VC RIP decks), these same companies aren't buying new software for a while, even if they would benefit from it. And many tools now are priced based on headcount. So it's sort of the perfect storm - valuation resets so you have to go a lot farther with your current funding, reduced retention revenue because your customers are paying for fewer seats and harder sales because of budget freezes. Ick.

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Re:VCs are scared when they should be greedy by gumby on Wednesday July 20, 2022 @06:15PM (#32173132)

> And many tools now are priced based on headcount.

Ah, live by the ARPU, die by the ARPU: you lack of control over the "U" means your company performance is coupled to the broad market!

Thanks for this example. It's obvious in retrospect but apparently not prospectively.

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Re:VCs are scared when they should be greedy by lotsofpulp on Thursday July 21, 2022 @03:44AM (#32176809)

Assuming you have the pricing power to not be affected by the broad market, you would simply increase pricing to maintain ARPU.

If you cannot increase pricing, then your performance is coupled to the broad market regardless of how it is measured.

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