Statistic Info

The WSJ published a recent chart of the 49 startups with billion dollar valuations. According to their research, there have never been as many privately held companies with such high valuations ever. The absolute number of these massively valuable companies alone is amazing. Ten years ago, most of them would have gone public by now. But what other insights can we tease from the data about these very special businesses?

First, the Billion Dollar Club (BDC) is nearly evenly split between Consumer and Enterprise companies, as the table below shows. I’ve noted the median dollars raised, the median valuation and the valuation efficiency in the table. The valuation efficiency is the valuation divided by the capital raised. This metric tries to answer the question, how much capital did the startup need to raise to achieve that valuation? This is a somewhat flawed metric[1] but I’m going to use it to compare the relative attractiveness of sectors[2].

Tomasz Tonguz

More Tech Services Stats

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

How to Reduce Churn

Improve Your Pricing Schedule And Turn More Profit

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

80% of marketers report that their departments are understaffed, making them feel overloaded

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

More Growth Strategy Stats

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

How Often Should The Pricing Committee Be Meeting And Making Changes?

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

Growing faster has twice as much impact on share price as improving margins

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

How to Reduce Churn