Roadmap to a SaaS IPO: how to unicorn your way to $100M revenue

Stéphane Nasser
Oct 1, 2018 · 8 min read
9 years from the garage to the IPO

1. Timeframe: 6 years to a SaaS unicorn, 9 years to a SaaS IPO

The Australian unicorn is Atlassian (developer tools), the South American one is Decolor (hotel and flight booking).
A startup becomes a unicorn at $100M in revenue, then typically IPO a few years later

2. Growth: triple twice, double thrice, then 82% growth persistence

On this graph, you can see Salesforce kicking ass
Revenue follows a S-curve: slow growth until PMF, fast growth until ~$100M in revenue, then slow again

3. Profit at scale = 40% — growth rate

Growing revenue or margins, that's the question.
Once you hit ~50M in revenue, your profit should be 40% minus growth rate.

4. Funding: Seed, Series A, Series B, and then some

This is a cropped version of the napkin, but you should absolutely see the full version — it's a classic.
Typically, funding is structured in several rounds (seed, series A, B, C, etc). Then it’s time to IPO.

5. Exit: sell at $1 million or $10 million ARR, or IPO at $100 million ARR

Eyes on the prize!
Assuming that you maintain 82% of last year's growth rate, every year.
Your best chances to exit in SaaS are at $1M ARR, $10M ARR and after $100M ARR.

6. Sales: $100M ARR = ARPA x number of customers

Left to right — Morty, Roger, Bambi, Dumbo, and Dick
To be a unicorn, you need 100 clients at $1M ARPA or 1M clients at $100 ARPA.

7. Headcount: $200,000 ARR per employee

Once again, Salesforce (ticker: CRM) kicking ass

Yes, it’s the same picture as at the beginning.

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Stéphane Nasser

Written by

Strategy & Development Manager @Fabernovel @SF. I connect large organizations with innovation leaders in the Bay Area. #partnerships #investment #prototyping

The PARISOMA Review

Insights from PARISOMA’s network and corporate innovation’s best practices, straight from SoMa.