Youngking profile picture
Youngking profile picture

Youngking

account executive

Contributor
Fire Starter

Question for everyone. When evaluating a Series B startup focused on AI apps (100M+ in funding and over $700M valuation), what are some things you look at to determine if the move to the startup is worthwhile?

for reference-- I making decent money (~140K) now and the new one would be more. curious about the different factors I should look at with the startup. i looked at current Ones funding which the largest one is a top VC firm. 
🧠 Advice
🖥 AI
📉 Equity
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oldcloser
Arsonist
5
💀
Is their model proprietary or otherwise protected from copy pasta? Does it have a market that fits? Proof please.
CuriousFox
WR Officer
2
🦊
👀🍿
Youngking
Contributor
0
account executive
Market fit yeah. There are other competitors for this solution though. So it’s definitely not the only one but it was the first one marketed specifically as this type of specific solution back in 2021
braintank
Politicker
3
Enterprise Account Executive
How many customers? Where did they come from? Are they growing?
Youngking
Contributor
0
account executive
1000+ customers when you say come from do you mean the founders? First time founders. Former AWS Engineering leads
braintank
Politicker
2
Enterprise Account Executive
Where did they get customers from.
Friends and family, inbound, etc.
Are these 1,000 customers individual users or 1,000 conracts with businesses.
Youngking
Contributor
0
account executive
Oh i see. Contracts with businesses. Ie gong, plaid, notion, Microsoft l,CVS
braintank
Politicker
2
Enterprise Account Executive
Microsoft is a customer?
What kinda AI y'all selling??
Phillip_J_Fry
Opinionated
0
Director of Revenue
Those are some pretty strong names for a startup to have as customers.
Youngking
Contributor
0
account executive
It’s a Vector DB
Sunbunny31
Politicker
3
Sr Sales Executive 🐰
OTE doesn’t mean much. What does the base look like, and how does it compare to what you have today?

Have you been able to talk to current reps?
Youngking
Contributor
2
account executive
Base 50/50 so 100k base 100k commission. Yes spoke with a current rep that loves it. Said going through classic startup pains but has product market fit. I do worry a bit about the potential tailoring off of the AI hype train tho
Sunbunny31
Politicker
2
Sr Sales Executive 🐰
Is the product solving an actual need, or is it something others are also doing (and possibly doing better)?

Nothing wrong with AI; it just has to be a viable product and not the latest shiny object.
jefe
Arsonist
1
🍁
I had a reply to this that got lost somehow, UGH.

These are really important considerations for anything new opp. OTE is just a number. I've been at orgs where I blew it out of the water, but there's been more places that was just pulled out of thin air and not truly attainable.

Utility and PMF are always important, but when it comes to AI this is even more critical. It seems like you're aware, but AI is huge right now and people love the idea of it. More often than not, companies talking 'AI' aren't really AI or just don't deliver value.
Youngking
Contributor
0
account executive
Feel ya on that one. Yeah I agree it’s a lot of hype and it seems to be that the enterprise orgs aren’t paying for the AI projects yet. They’re just like discussions to fill investors needs that they’re doing stuff for AI. The position is a commercial role for 0-750 employees sized customers. I have found in my current role that a lot of smaller companies are paying big for the AI products to drive their differentiation and product creation but also because there’s a lot less red tape at the smaller companies around AI
Justatitle
Big Shot
3
Account Executive
here is my main concern for this. Their funding and evaluation at Series B seems high, what does that mean for you and why it is important? I'm glad you asked. They will need to meet revenue goals that are rather hefty in a short period of time. You will be asked to meet a quota that could be significant due to this. Maybe they are meeting those sales/revenue growth goals but I do not know, additionally, I assume they are hiring more than 1 AE meaning the current team there of course loves it but when the leads are spread thinner will the love still flow? Lastly, if their plan is to continue to fundraise that means they can't really have bad quarters or down months in revenue because the firms(VS and PE) that are invested don't get involved to lose, IE. High pressure to sell. These are all things to consider before joining and tough to get the direct answers too, chasing money is always a good thing IMO but you need to look at it from a very black-and-white standpoint or you'll get fucked. hope this is helpful.
poweredbycaffeine
WR Lieutenant
2
☕️
The fact that they’ve raised over $100M and are valued less than a billion also tells me someone doesn’t believe they can scale and want some proof before either an acquisition or a secondary round at a higher valuation.
Justatitle
Big Shot
2
Account Executive
No argument here. I guess this concerns me a little less because evaluations have shifted dramatically in the past 2-3 years and being that the founders are former AWS engineers they may have given up a little more than a seasoned vet would have. But what do I know
poweredbycaffeine
WR Lieutenant
4
☕️
A thing or two.
Diablo
Politicker
3
Sr. AE
Valuation game is a bit tricky to be honest - you never know the intention of deriving at the number. I would look at the growth, reviews and ratings, guaranteed base.
unclespacejam
Politicker
2
ur dad’s brother
This sounds like Apollo?
Youngking
Contributor
1
account executive
Nah this company is a deep backend tech.
poweredbycaffeine
WR Lieutenant
2
☕️
Why are the valued at less than a bill with a 100 mill in funding? That’s a big red flag.
Kosta_Konfucius
Politicker
1
Sales Rep
What’s a ratio (funding to value) you look for?
Youngking
Contributor
1
account executive
I second Kostas question. Last funding was in 2023
poweredbycaffeine
WR Lieutenant
0
☕️
How often did they raise and did you say latest round was PE?
Youngking
Contributor
1
account executive
Raised in 2022 and 2023. Led by VC not PE, my mistake. 1 main contributer and 2 smaller ones.
poweredbycaffeine
WR Lieutenant
1
☕️
Ok this is great context. Their next round will be a big C and a big valuation, but they have to over deliver on scale and revenue. You’re going to be under the gun and will be churned out if you can’t hit 100%+ in your second quarter and then consistently.
Pachacuti
Politicker
2
They call me Daddy, Sales Daddy
Assume you make that $200k in Y1 but then no one wants them after that and you end up losing your job and it takes you 3-6months to find another. That stable $140k/yr starts looking pretty good.
TennisandSales
Politicker
1
Head Of Sales
1. dont look at OTE. look at the base, and evaluate the way they compensate you. no how much they say you will make 2. if you have been in a public company you need to be ready for how much harder sales could be at a start up with potentially no brand recognition, limited resources
3. also, do your best to understand the tech. is this a legit AI ? or just a company that took ChatGPT and put it into a chat bot and reselling it?
4. Look at number of customers not funding (every AI company is getting funding)
5. Look at revenue not valuation 6. who is doing sales right now? - is there any established sales process?

These are just a few
Sunbunny31
Politicker
2
Sr Sales Executive 🐰
Not to mention just taking time off is a hassle, and you don't have as many vacation days.
Medical/dental coverage + benefits are sometimes very different and more costly.
saaskicker
Celebrated Contributor
1
Enterprise AE
how's the comp plan laid out? some of these series B companies have a favorable comp plan, and if you play your cards right (multi-year deals, additional kickers) you can make your OTE +++ without hitting your quota. i'd run some scenarios with the % they pay out on ACV and work backwards to see how much pipeline you think you'd need to generate to make $100k
Youngking
Contributor
0
account executive
That’s smart. Like that idea a lot. I’ll check it out. They’re talking a 500K quota. Average deal size is like 40K i believe
kneehigh
Politicker
1
Senior Enterprise AE
What’s the sales cycle like then? 500k annual quota and 40k avg deal size looks quite reasonable assuming a 3 month or so sales cycle
Youngking
Contributor
0
account executive
Yep you nailed it
saaskicker
Celebrated Contributor
0
Enterprise AE
over 200k OTE on a 500k quota? Are they paying out 20% in commission?
886GFl
Praised Answer
1
Account Executive
Lots of other good comments here.

This pinecone? I know a few vendors in the Vector DB space.

I’d be asking what % of reps hit quota.
Youngking
Contributor
1
account executive
886GFl
Praised Answer
0
Account Executive
I work in the AI space, they have good brand reputation. I bet they will have a nice source of leads to tap into because they have a PLG motion with seemingly good amount of usage. If you’re passionate about it, I’d certainly give it some thought!

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