thezeetee

Global Head of Sales

Valued Contributor

Offer Letter Came In - Quota too high, I think.

So, I received an offer from a Series A company that has $20M in funding, and like 4 years of runway.

They are closing in on their first $1M of ARR (total), after truly launching the product/converting POCs in January.

They gave me a few options regarding salary, ranging $170-$190k base, and then $150k of bonus, bringing it to $320k OTE.

They said the quota is $1.5M, and I pushed back, because originally I was told that $700-$1M would be my quota 1, but also 2 - a $1.5M quota for a company that basically has no revenue infrastructure setup seems like a losing proposition.

I am not scared of a $1.5M quota, as I've had that and then some a more mature companies.

Their ACV is ~$72-$120k; they say they convert like 40% of their deals.

Between 2 reps already, there are something like 37 deals in pipe.

curious on whether or not this is a realistic number right now, and what you guys think I should push towards, and the reasoning behind in.

my reasoning:

- No revenue infrastructure

- Little marketing

- Little collateral

- No brand equity

- They are having me work on enterprise/strategic ops, so could take awhile to build pipe.

thoughts?

26

31 comment

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braintank

Politicker

14

Enterprise Account Executive

None of their data is legit. They've only been selling for 6 months.

CadenceCombat

Tycoon

1

Account Executive

This

0

Director of Sales

Exactly! Doesn’t sound legitimate at all.

thezeetee

Big Shot

5

Global Head of Sales

UPDATE:<br><br>I spoke with CEO today. I developed my own comp structure where I make 15% 0-80% to goal, 17.5% 81-100% to goal, and then 20% at 110% + on a $750k quota. Paid out the 2.5%, and 2.5% retroactively. I have deep connections and experience with our ICP. Guaranteed 5 months (1.5x avg cycle). <br><br>Obviously this will change in the future. Was able to negotiate a 3% bump on all multi year contracts.

CRAG112

Valued Contributor

1

Account Executive

Smart.

aiko

Politicker

0

Sr. Account Executive

Glad that worked out!

oldcloser

Arsonist

4

💀

"they convert like 40% of their deals." I got thrown off the bull right here. POC to Closed/Won? SQL to Closed/Won?

"closing in on their first $1M ARR" - Calling this 9 deals to be generous. From 37 in the pipe- now we're under 25%.

Fresh oats are $5 a pound.
If you wanna buy some of them oats in the corner that already done been through the bull... well, them thar a little cheaper.
I ain't buying any of it.

saaskicker

Tycoon

4

Enterprise AE

They're asking you to more than double what they've done and they built the company.

poweredbycaffeine

WR Lieutenant

4

☕️

Have them hire me as their VP RevOps and we will get you that $1.5M.

poweredbycaffeine

WR Lieutenant

8

☕️

Oh, and 0% chance $20M can burn for 4 years. How do I know? The OTE on you plus the other sales team members and future expensive dev and product hires. They’ll burn for 18 months on that, max.

braintank

Politicker

4

Enterprise Account Executive

Yuuuuup

Add a few trade shows and all of a sudden moths in the pockets

CRAG112

Valued Contributor

0

Account Executive

Lol yup. I laughed at that.

More like 1M a month burn as a standard.

0

Regional Manager

Not to mentioned if they actually do show rev growth, they’ll have to hire more

CuriousFox

WR Officer

4

🦊

Do they not live in reality?

Pachacuti

Politicker

3

They call me Daddy, Sales Daddy

Cut everything they told you in half, especially that 4 years of runway. They desperately need closers which is why you have a$1.5m quota out the door. And with a ACV of ~$100k, you'll have to close 15 deals (at least) to hit that $1.5m. Not easy in the first year

But that base+bonus is nice. Is the bonus a guaranteed bonus in the first year or just the commission structure?

Regardless, you don't want to be set up to fail and an unrealistic quota will definitely do that.

Revenue_Rambo

Politicker

2

Director, Revenue Enablement

The 150k bonus is a red flag for me. Bonuses are typically tied to company performance, so in this case if they miss the target it’s possible you get nothing. Also likely that it would be paid out on an annual basis to help incentivize reps from jumping ship.

thezeetee

Big Shot

0

Global Head of Sales

It’s commission- sorry, I should’ve specified. Paid out on a quarterly basis.

Revenue_Rambo

Politicker

1

Director, Revenue Enablement

Ok that’s a big difference.

The base is on target considering how much lifting you’ll need to do to be successful. I agree with the others that the quota is a little out there but not impossible.

Of the POCs they’ve converted, how many are enterprise/strategic?

CRAG112

Valued Contributor

1

Account Executive

A wise man once said a major red flag is being paid out by quarter, not when the deals is paid and closed out.

FinanceEngineer

Politicker

1

Sr Director, sales and partnerships

So average deal size is $92k. Let’s assume 36 deals in the current pipe (so 18 per person). That means 7 are going to close. $644k, so 43% there.
How long is the sales cycle? If this is a 5 month or less cycle, looks like everyone is going to hit.
Also, what is your ramp? You need to get at least the 1-1.5X of a sales cycle in ramp to just get ready. With that, and assuming 5 months, you would be covered for 7-8 months.

Now, is it possible? Yes

Can you easily do it? Maybe

Should you push back? Always

See what I’m reading here is commission is 10%. Are there accelerators? Can you add them? What kind of equity are you getting? Just push for more, and you will get somewhere that makes sense.

SaaSguy

Tycoon

1

Account Executive

I wouldn't

fidelcashflow

Catalyst

1

Account Executive

Glad you renegotiated. Reminds me of a company I was with before that gave me a $1mm quota yet only did $900k the year prior with 2 reps. Plus no supporting evidence showing that the growth will occur

Diablo

Politicker

0

Sr. AE

Numbers are crap, doesn’t fit my bill at all. I will be a bit cautious than worried.

HappyGilmore

Politicker

0

Account Executive - SMB

Number seems pretty high from a quota perspective with all things considered, especially if you're working enterprise since those deals tend to have a long sales cycle.

Maximas

Tycoon

0

Senior Sales Executive

Totally UNREAL!

AnchorPoint

Politicker

0

Business Coach

Less than 6 mths in... their swagging numbers

CRAG112

Valued Contributor

0

Account Executive

Lol. That's some bullshit. They are closing on 1M in ARR just now, and they expect you to do 150% of that by yourself.

What's next? They hire 3-7 more sales people in the next month or two?

Definitely push back on the sales targets.
This company is in no way, shape or form prepared for Enterprise deals.
First year being 500K would make sense.
Potentially 750K as a standard.
Also need serious incentives to win deals, kickers, and etc.

CPTAmerica

Opinionated

0

President/CRO

The numbers don't add up but they rarely do for startups.

That's a healthy base! If you feel good about the company, product and leadership it might be worth taking a chance. However, if they're cutting reps for missing quota and/or have a shaky culture I wouldn't do it.

Valueselling

Member

0

Managing Director

Hi

From my perspective, joining a new company is a bet. Considering you are to work 40+ years, you should consider a job for at least 2-5 years.

If you are just focusing on the first year, I think you might be overseeing what the experience in that company is bringing to your knowledge, expertise and resume.

In my 30+ years of selling, including rep. manager, regional VP and WW sales, I have rarely seen a rep making numbers the first year if not having a luck portion.

Quotas are typically high for the first year because for fast growing companies , is the only way to get approval of a slot.

You know that the marathon runs close the application 6 months in advance ?. That is because no one believes that a marathon can be run without less than 6 months training if no more:

Think mid term, work as much as possible , think on the value and learning and assume the first year you will be mad and not making numbers ( don't say it but assume it ) and get ready for the second year where I promise you will work 30 % better or smarter or less, and you will sell 30 % more. Believe me.

Enlarge your vision !

sora

Opinionated

0

RevOps Automation Consultant

This is why I can never go back to early stage startups lol they drink to much of their own koolaid

LMHandle7

Executive

0

Sales Director

They have very little revenue runway, sounds like they are being overconfident, do they have any multi-year deals in place?
What is their MRR currently?

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