Planting the Seed: Raising Our First Round

Having recently graduated from Y Combinator, I'm going to walk through exactly what we did to raise our seed funding. Hopefully this will be helpful to other founders navigating the world of early-company fundraising. If you have any questions, please reach out to chris@seneca.systems. Set Goals Our number one goal was to stop raising money as soon as possible. You hear this advice constantly, and it is incredibly helpful. Raising money is a means to an end. The best way to raise money is to build a fantastic company; raising money is tangential to building a fantastic company;…

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Correlating Commissions with Happiness

When creating the compensation structure at Seneca Systems, we leaned on the advice and experience of many friends. Our recurring commission structure was borne from those conversations; a specific and sincere thank you to Liz Cain for her thoughts and contributions. Now that we have the structure of the commissions, we needed to figure out how that relates to the total compensation package for a salesperson. This is commonly referred to as On Target Earnings (OTE) which is calculated as Base Salary + (Expected Business at Quota * Commission.) For example, if their base salary is $50k and they are expected to…

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Rethinking Sales Commissions for SaaS

Traditionally, sales representatives are compensated with bonuses for either hitting goals (quota) or as a percentage of revenue generated (commission.) For SaaS companies, business model relies on recurring revenue, this creates a mismatch between the short-term reward of a sales rep and the long-term revenue generation for the business. Let's look at a hypothetical SaaS product: $200 MRR 1.5% Monthly churn 72 month customer lifetime ((1/Annual churn) * 12) $14,400 LTV (MRR * lifetime) 5% Commission ($720 per deal) This should give us some basics to work with. For simplicity, we'll assume that, as a small SaaS company, our…

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The New, Old Frontier

America is defined by two organizing principles: capitalism and representative democracy. Ideally, this is a symbiotic relationship, a dance between how much gets done (our economy) and what we decide to do (our policies.) In the past few decades, we have seen a vast societal shift The Capitalist Engine Capitalism is governed by the free market, fueled by consumers’ continued purchasing of goods, and an extensive network of debt and investment. The technical advancements, in only the past few decades, towards more efficient capitalism have been astonishing. Advertising companies — the Googles and Facebooks — have made groundbreaking progress in predictive algorithms,…

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