When Do SaaS Startups Hire Their First VP of Sales

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tomtunguz.comThe prevailing wisdom for hiring the first VP of Sales is roughly $1M in ARR, or whenever the company has figured out some repeatable sales process. The rational behind this advice is, at this point, the company needs someone to build recruit, incentivize, coach and manage the team that will grow to acquire more and more business. While that all makes sense, I was curious to see if startups do this in practice, and whether the timing of the VPS differs by ACV.

I catalogued the first VPS hire for about 20 fast growth SaaS companies founded in the past five or so years, and compared it to the date they were founded. The histogram above shows most of the time, fast-growth SaaS companies hire a VPS in the third year after they were founded. Since it can take 3-9 months to find a great VPS for the company, this means these startups began their search about 2 years in.

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