29th May 2024

VC Insights: Identifying Key Triggers for SaaS Investment, Growth and Scaling Success

Welcome to The B Word, the podcast that unravels the intricacies of B2B branding. Our monthly episodes feature guests from diverse realms, including technology, venture capital, private equity, and more.
Together, we delve into the essence of branding, its mechanics, and its significance in the contemporary business landscape.

In this episode: with guest Stephen Millard from Notion Capital, we explore the decision-making process of venture capitalists (VCs) when investing in Software as a Service (SaaS) businesses. We delve into the specific triggers and criteria VCs look for in potential investments, particularly those in the build or scaling stages. The discussion includes insights on what VCs bring to the table, the qualities they seek in entrepreneurs, and the key elements that influence their investment decisions.


About: Notion Capital invests in next generation of SaaS entrepreneurs, supporting at an early stage, investing in exceptional SaaS and Cloud founders who are at the point of product market fit and are ready to grow fast and go far.

Episode highlights:

How did Notion set out its stall in the VC world?
  • Early on, Notion saw the shift in software to the cloud, from perpetual license to subscription, and so carved out its niche.
  • Evolution from being pioneers in Europe to a brand focused on deep SaaS expertise.
  • Building an impressive portfolio and team.
  • Continual adaptation in the types of founders and companies invested in.
Do you believe that clarity of purpose is essential for success in the sector?
  • The VC community has become very crowed, so there is definitely an emphasis on Notion's uniqueness and value proposition. Differentiation is a necessity in the industry.
  • Stephen believes that Notion's offer stands out based on its inherent value and he isn't too concerned about competitors' strategies due to the firm's distinctiveness and niche.
What are the kind of triggers that you look for in one of the businesses that make it viable as an investment?
  • Notion look for something quite extraordinary in the first instance and seek the potential in something highly improbable and exceptional. Assessing the founder's ability to attract amazing people and build something exceptional.
  • Stephen looks for the "hairs on the back of your neck" feeling, indicating a strong intuitive sense of potential in a founders ability.
  • It's important to evaluate whether the firm can help the business with specific challenges in the start, build, and scale phases. And to recognise that people are the most critical factor in success.

Are you driven by the need of the of the entrepreneur you meet or do you keep focus on the changing landscape around you?

  • Notion operates within a framework of start, build, and scale phases. They take a very structured and organised approach when working with a company. With a focus on making a quick impact and independent assessment of the businesses needs–identifying essential capabilities, goals, and personnel required.
  • They create an action plan for the investment and adapt as needed over time and conduct ongoing learning and adaptation based on company-specific experiences.
  • It's a forward-thinking approach to anticipate future challenges and opportunities, having learned from investing in over a hundred companies, recognising common patterns and reasons for success or failure.

What should someone think about when looking at brand in a bigger context, not just visual verbal expression, positioning category, but also how brand cascades into go-to-market strategies and enables product-led growth.

Start with the Fundamental Essence:

  • Understand and communicate the core truth of the brand—the journey, mission, and promise from the very beginning.
  • While some companies may change their product and proposition significantly, the vision often remains consistent even as revenue scales from $1 million to $100 million.

Revenue Milestones and Brand Evolution:

  • At $3 to $10 million in revenue: Focus on messaging consistency and clarity of language.
  • At $10 to $30 million in revenue: Work on alignment not just internally, but also in customer targeting and service.
  • Beyond $30 million: Brand and storytelling become increasingly crucial as operations expand across multiple channels, markets, and partners.

Early-Stage Investment in Brand:

  • Stephen cautions against heavy early-stage PR spending unless the target audience is consuming that PR.
  • Suggests clarity of message, alignment, and then bigger investment as stages progress.

No One-Size-Fits-All:

  • The process is staged and context-specific, it's not rigid or set in stone.

What advice would you give to founders seeking investment?

When pitching for investment, consider:

  • What do you want people in the (investment) meeting to say about your business when you have left the meeting?
  • What words do you want them to use when they are talking about your idea later to a partner who wasn't in the room?

Remember to do these for a meeting with investors:

  1.   Clearly communicate your main messages.
  2.   Cut through the noise.
  3.   Make sure your essential points stand out.


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Published by: Fara Darvill in podcast, Thought leadership

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