I see founders take industry-known benchmarks for SaaS metrics as gospel and dictate how they strive to operate their businesses. However, the rationale behind these benchmarks is rarely dissected and usually only validated by correlating these metrics to “this is what best-in-class companies show.” Capital efficiency has become a critical concern for both investors and operators, with rising interest rates over the past two years. In this article, I discuss what we at Headline see as best-in-class capital efficiency and a framework for how and why founders should care about it by tying it back to founder equity. If you run a venture-backed start-up and care about your founder and team’s equity, you probably want to be aware of this framework as you raise and burn outside capital.
In the data-driven SaaS world, industry-benchmark metrics are often taken as gospel, dictating the standards businesses should strive for. However, the rationale behind these benchmarks is rarely dissected and usually only validated by correlating these metrics to “this is what best-in-class companies show.” With rising interest rates over the past two years, capital efficiency has become a critical concern for both investors and operators. In this article, Nicolas von Blottnitz discusses what Headline sees as best-in-class capital efficiency and why this is the benchmark that founders should care about — by tying it back to founder equity. If you run a venture-backed start-up and care about your founder and team’s equity, this is for you: https://lnkd.in/gFVyiryi
