RVNU #016: The VC-Fueled Degradation of Sales
Why bootstrapped startups may be better for top reps.
Introduction:
The generation of sales reps nurtured into the enterprise B2B SaaS industry over the last 5 years, has been the most disappointing cohort since I entered the workforce in the late 90’s.
The general inability or unwillingness to find ways to earnestly uncover pain in a prospect and match it accurately with solutions available to them, is at an all time low in my opinion. The desperation for ‘the sale’ driven by increasingly unreasonable top-down generated targets set upon startup sales teams, has created a generation of sellers with an unhinged perspective on what it takes to sell effectively.
The craft of sales is in the gutter, and venture capitalists are at the epicenter of the problem. Reps that want to excel in the craft of selling, need to think carefully before joining a shiny new startup backed by venture capitalists. If they care about mastering the craft of selling, perhaps the most valuable skillset any of us could develop, they’re likely better off joining the unknown, unfashionable bootstrapped startup.
Venture Capital:
In recent years, venture capital has fueled explosive growth in the SaaS industry. Companies receive millions in funding, with investors urging them to scale revenue at a relentless pace. But this “growth at all costs” mentality has had unintended consequences—most notably, it puts CEOs, revenue leaders and sales reps under pressure to cut corners to get deals done.
For salespeople, this pressure to hit ever-increasing targets often leads to poor practices, lack of authentic connection with buyers, and ultimately, a transactional approach that is more applicable in the B2C world, and it overshadows the true craft of accurately matching pains with solutions - which is the essence of ‘sales’.
In contrast, bootstrapped companies, growing through steady, sustainable revenue, tend to provide a healthier environment for sales professionals, where a combined bottom-up and top-down analysis is used to determine revenue goals.
The Consequences of VC-Fueled Hypergrowth:
After a Series A round, many SaaS startups face tremendous pressure to achieve rapid revenue growth. The double triple, triple double at Series A (3x ARR 2 years in a row; then 2x ARR for the next 3 years) is the gold standard series A startups. Investors expect high returns and fast progress, pushing founders and their sales teams to prioritize top-line ARR over everything else.
This “jet engine fuel” approach, as described by venture capitalist Josh Kopelman, may accelerate growth, but it also risks compromising the fundamentals if the startup or the market is not primed for this rate of growth.
Sales reps often resort to tactics that close deals quickly without truly assessing customer needs, failing to focus on customer lifetime value and sustainable growth. In effect, the pressure of meeting the VC theses of billion dollar outcomes inside 10 years can incentivize short-term wins, often to the detriment of long-term value.
In my experience there’s very little time for formal education and enablement of reps in a sales led environment at Series A. It’s go-time! However, so few are ready for what’s next.
Traditional “sales schools” like Xerox or IBM, which trained generations of salespeople to master their craft with rigor, are now rare. These companies produced sales professionals with deep market knowledge and relationship-building skills that contributed to both their own growth and that of the companies they served.
It’s surprising to me that given the size of the SaaS industry, there’s a lack of standout sales schooling from the many supposed unicorns out there. Other than perhaps Salesforce has any SaaS company churned out a high quality of enterprise B2B reps in the last 10 -15 years?
Why Bootstrapped Companies Offer a Better Sales Environment:
In contrast, bootstrapped companies, which grow with a careful eye on profitability and customer feedback loops, offer an alternative path. Without the luxury of endless capital, these companies rely on sustainable growth strategies where sales reps are encouraged to fully understand customer needs, build authentic relationships, and close deals that make sense for all parties.
The anti-sell—the idea of qualifying prospects carefully and prioritizing genuine value over pushing a sale that we covered in a previous newsletter—often thrives in these settings, empowering salespeople to take a consultative approach.
Sales reps in bootstrapped businesses tend to get more opportunity to act as consultants, addressing customers’ pain points and objectively exploring whether the solution fits within their budget and objectives.
This approach aligns with the principles of RVNU’s framework, which emphasizes using early product-market fit signals to ensure solutions align with actual customer needs, fostering sustainable growth. Bootstrapped sales teams can focus on the long game, prioritizing customer success and retention over rapid, often unsustainable, customer acquisition - until the startup and market is truly ready for hypergrowth!
The Misalignment Between Founders and Investors:
Both founders and investors play a role in the current SaaS sales landscape. Founders seeking Series A funding are often incentivized to paint an optimistic picture of their potential, aiming to convince investors of rapid growth. Meanwhile, some investors, eager to capture the next unicorn, may prioritize momentum over careful due diligence, fueling high valuations and unrealistic growth targets. This cycle not only strains startups but also increases pressure on sales teams to deliver against inflated expectations, sidelining the craft of sales in favor of hitting numbers.
A Balanced Approach to VC Funding:
Of course, venture capital isn’t inherently bad, and there’s a time and place for it. Josh Kopelman’s analogy of Series A funding as “jet engine fuel” is fitting—it’s best used to scale something already proven, rather than pushing untested ideas at breakneck speed. When companies achieve genuine product-market fit, with sound unit economics, VC funding can supercharge their growth responsibly. But when VC is used to force unsustainable growth, it can quickly erode both the business model and the culture within.
A (free) Solution:
To support founders understanding their true readiness, and to support VCs doing due diligence, RVNU has developed a free tool called the “RVNU GTM Debt Self -Assessment”.
It will outline whether a startup is ready to raise capital, what gaps they have in their maturity, and how to pay down said GTM debt, in order to be ready to scale.
It also serves to highlight to reps considering joining the startup, whether the startup is a fertile breeding ground for them to master the craft of selling. (ie: Fig 2 below is the kind of result I’d want to see as a rep, but is rare)
20 minutes, 70 multiple choice questions.
Click here to you get your own free version of the chart below:
Conclusion:
The SaaS industry needs a shift in how it approaches sales and growth. Some would argue that has happened in recent months, I would argue there’s still a very long way to go.
Venture-backed SaaS companies would benefit from taking a page from the bootstrapped playbook, focusing on sustainable, customer-centric growth rather than prematurely sinking their ship by raising series A capital prematurely.
My advice to founders, is stay bootstrapped for longer. My advice to VCs, do proper due diligence otherwise your capital will inadvertently sink a perfectly good ship.
My advice to sales professionals is to align with a company that values thoughtful, consultative sales—whether bootstrapped or thoughtfully venture-backed—as it presents a better opportunity to refine your craft and drive real value for customers, and in turn build yourself a positive reputation in your field of expertise.
Ultimately, the path forward lies in balancing ambitious growth with a respect for the foundational skills of sales. By taking lessons from the past and creating an internal sales academy, SaaS startups can cultivate a sales culture that delivers sustainable success, value for customers, a new generation of exceptional sales talent, without forgoing rapid growth.
Thanks for reading folks
Wayne
PS: At RVNU, my co-founder Laura Wheeler, directs our enablement program. If you’re a founder needing help ensuring your sales org are fully enabled to execute, complete the assessment and book time with her.