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Confidential & Proprietary – Do Not DuplicateJanuary 6, 2020
A VC View on Enterprise Sales
Sixteen sales lessons from the field

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15 years backing enterprise tech in Europe & Israel
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How we invest
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Where we have invested recently:
Who has invested with us: Stage & Style:
Day Zero Early Scaling
First Check Series A
Pre-Revenue Early Sales
$250K $1.5M
Prefer to lead (but ok to follow)
Prefer to take a board seat (but not always)
“hands-on advisors to founder-led companies”

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My personal sales journey: volume
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4 years
1.2M kilometers flown
~600 actively engaged
1,395 prospects
~300 first meetings or calls
$41M raised

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My personal sales journey: value
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Angular Ventures:
Distribution of LP Commitments
59 LPs in total; 28 of meaningful size
Largest LP is 40x the smallest LP
One LP took a twenty-minute meeting
Another LP took 3 years

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“Enterprise” vs. “Deep Tech”
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Lesson #1: You are either post-PMF or pre-PMF
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Seeking product market fit
Founder-led sales
Experimentation & learning
“Product-
Market Fit”
“Natural” repeatable, scalableUn-natural sales

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Lesson #2: Embrace the chaos
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Theory of Marketing & Sales Funnel Reality of Founder-led Sales
vs.

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Lesson #3: Work your way backwards up the funnel
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Leads
move
down
through
the
sales
funnel
In general,
try to
build
capability
up from
the
“bottom”
of the
funnel to
the top

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Lesson #4: Process and tools help; invest in them early
• Tools can be very
helpful in managing the
chaos
• Invest in tools and
processes wherever you
can
• Customize them to your
needs
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Lesson #5: The “cavalry” will not save you
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Don’t fall for the seductive idea that
“experienced” “American” “sales
professionals” will accelerate your early-
stage startups growth plan
Why not?
• They lack startup DNA
• Intercultural challenges
• Very expensive
• Accustomed to support you can’t
provide
• Motivated by cash, not equity (here to
make money, not to help you learn)
• Why are they talking to YOU?

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Lesson #6: Your pricing is probably wrong
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• Understand the options
• Per seat
• Per customer/site
• Volume-based
• Value-based
• Open source/freemium
• Trials
• Ask your customers
• Think about TCO and ROI
• Don’t be afraid to experiment
• Raise your prices

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Lesson #7: Sometimes $1M is as easy/hard as $50K
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• Don’t be afraid to go after big
deals– as long as they are not
too big/slow/complex/unique
• Don’t be afraid to raise prices–
as long as you are charging for
the right thing
• Early validation is great, but
there are no points for
“penetration pricing”

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Lesson #8: Your ARPA is your destiny…
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Source: Nathan Latka Source: Christoph Janz (Point Nine)

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Lesson #9: …because unit economics are everything
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By customer By sales resources
For you
For them
• How will accounts behave over time in terms
of churn and expansion?
• What are gross margins over time?
• Can you measure account quality and
profitability?
• Can we predict account behavior?
• Are your assumptions around the costs of sales
resources, account execs, success/support,
and marketing expenses reasonable?
• What is the fully-loaded cost of sales and
marketing per account?
• Can we predict sales resource performance?
• Is our pricing right?
• What is the ROI for a customer?
• Based on real TCO and proposed pricing
• Should be 10x+
• What is the time to value?
• Does it make economic sense for a salesperson
to work for the company?
• Do we have the right compensation plan?
• How easy will it be for them to hit their OTE?

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Lesson #10 Accept your role as Salesperson-in-Chief
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• CEOs/founders are always
selling (product, roles, equity)
• Ability to sell = ability to survive
• If you can’t sell the product
yourself, how can you hire
someone to do that?
• This is a massive learning
opportunity for the company,
and a massive growth
opportunity for you

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Lesson #11: Discover the Buying (Selling) Process
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• How do customers buy your
product?
• Are there identifiable
segments?
• Identify gateways, catalysts,
personas, blockers, obstacles…
• What can you do to impact
this process?
• Be thoughtful about where to
be original and where to copy
others

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Lesson #12: The “four V’s” of revenue quality
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Volume
(how many
customers?)
Value
(how much could
they pay?)
Validation
(who is buying
and why?)
Velocity
(how fast is it
growing?)

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Lesson #13: Not all revenue created equal
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License
Recurring
LicenseProf. Services
Recurring
license with
12-month
commitment
Recurring
license with
36-month
commitment;
10% discount
Recurring
license with
36-month
commitment;
20% discount;
cash up front

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Lesson #14: Repeatability > Revenue
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• Smart investors will back a
great founder + clear vision
• Opportunity matters more
than current revenue
• Repeatability is a predictor of
growth
• Your activities are designed to
de-risk the risks that matter

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Lesson #15: Sales-driven product
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• If your VP Sales were in charge
of product, what would she
change?
• Are you incorporating learnings
from the field into product
design? Feature prioritization?
Pricing?
• Where are the friction points
and can you eliminate them?
(onboarding? configuration?
adoption?)

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Lesson #16: Your “Series A” story will be about sales
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Purpose
Problem
Why now
Solution
Market Size
pitch template has 10 suggested sections:
Competition
Product
Team
Business Model
Financials
By the Series A stage, this can be
framed in customer-facing terms
Providing examples of problems from
actual customers demonstrates
knowledge and opportunity
Show time to value, actual ROI,
customer quotes, price, and
willingness to pay
The efficiency of your sales cycle and
the velocity of sales growth help
prove this point
Again, the velocity of sales and the
price point you have achieved helps
prove this point
Credible reference customers will
have evaluated your competitors,
and their decision to go with a
startup proves a lot
All the other elements on this page
will combine to prove that you have
the right product
Given that you have real customers
paying a real price on a real pricing
model, your business model will
already be in sharper focus
VCs will judge two aspects: (1) ability
to succeed without professional sales
force and (2) ability to grow/recruit
a sales force
Ultimately, the whole “financial”
discussion is about $XM in financing
to raise ARR to given level and
further prove sales scalability

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Thank you & good luck!