If you want to break even, go to APE.
Cloud companies generally rely on efficiency metrics like CAC and LTV recovery to CAC, but “they feel more like financial metrics than operational ones, and it’s hard for employees to execute on these concepts,” according to Neeraj Agrawal, Brandon Gleklen and Jack Mattei of Battery Ventures.
Using data from Capital IQ and Battery research, this post contains 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 think could serve as your North Star as you navigate these volatile times.”
Full TechCrunch+ articles are only available to members
Use discount code TCPLUS SUMMARY to save 20% on a one- or two-year subscription
This metric is not a panacea: the APE varies by geographic region and other benchmarks, such as a company’s gross margin or projected growth rate.
“Reaching a higher APE earlier in the maturity cycle is likely a net positive outcome,” they write. “Overall, we think the $200,000 target would serve most mid- or late-stage growth companies well.”
Take note, this is not a one metric to rule them all piece of thought leadership.
as gleklen joked on Twitter, “You should only write about a metric in a blog post if you’ve discussed it with multiple management teams and get consistent feedback that it’s valuable.”
Thanks so much for reading,
Editorial Manager, TechCrunch+
The Secret to Doing Great Reference Checks for Prospective Hires
I’ve hired enough people to understand that cognitive dissonance and confirmation bias are endemic when it comes to checking a candidate’s references.
Teams are keen to hire candidates who have made it through multiple rounds of interviews, but checking references shouldn’t be a pro forma exercise.
Haje Jan Kamps shares six questions she asks during reference calls that will “start a good conversation,” along with some tips on what to listen to.
Learning from My Failures: Lessons from a Founder Twice
All schadenfreude aside: learning from our own mistakes is useful, but learning from others is great.
Squadhelp CEO and founder Darpan Munjal has closed his previous company, a fashion e-commerce company, after four years of “solid growth.” In hindsight, he says the initial funding created a false sense of security.
“It was not easy to close the doors of a business that I really believed in. But I knew I could start over if I was willing to learn from my mistakes and apply those lessons intelligently.”
4 Principles that Private Equity Firms Must Leverage to Win the Talent Race
My startup background was focused on operations, so the world of venture capital is still a black box for me in many ways.
I was surprised to learn that private markets are so expansionary: According to 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 contain more than $17 trillion.
Retaining people in private equity isn’t easy: New associates must wait years before they can earn interest, and a notoriously opaque compensation system doesn’t encourage loyalty.
“Between salary, bonuses, acquisition, accrued interest and management company ownership, it can be nearly impossible for employees to know where they stand financially,” says Richard Change, co-founder and managing partner of PFA Solutions.
Launchpad teardown: Simba Chain’s $25 million Series A platform
Although TechCrunch did not cover blockchain startup Simba Chain’s $25 million Series A, it still shared its winning submission with TC+.
“My disdain for blockchain technology will surely be reflected in this teardown,” writes Haje Jan Kamps, who says the 19-slide deck “is incredibly impressive and covers a lot of ground.”
In a down market, good messages are not enough to manage international teams
Talent is distributed around the world, which means startups that don’t respect cultural differences are setting themselves up for failure.
Now that many companies are in cost-cutting mode, it’s critical to follow local laws and social norms when it comes to laying off employees, according to John S. Kim, CEO of Sendbird.
After leaving two startups with international teams, he wrote a TC+ guest post to help founders communicate with workers during turbulent times.
“A company not only has a responsibility to keep employees informed about what is going on, but it must do so in a way that best resonates with their respective audiences.”
Dear Sophie, What should we know about the H-1B lottery before hiring STEM OPT?
What do my founding team and I need to keep in mind in our early stage startup so that we can be on track for the next H-1B lottery for the STEM OPT candidates we are hiring?
— Strong strategist