Questions for the Board of Directors

Recently Jeff Kaplan wrote an interesting blog post called,” Will the Rising Cost of Sales Cost SaaS Companies VC Funding?” His article is in response to this post from Phil Wainewright on LucidEra’s Pipeline Healthcheck. Jeff raises the following concern about the view of the long-term viability of the SaaS model in the VC community:

“So, my concern isn’t whether SaaS is a profitable business model. Instead, my concern is whether the VCs, private equity firms and other traditional funding sources are going to retreat from the SaaS market because they have unrealistic expectations for this sector.”

Recently we asked VPs of Sales at software as a service (SaaS) companies the following question:

If you could ask a VC anything about your role as a VP of Sales, what would you ask them?

Here are some of the questions we received:

SaaS-Specific Questions:

• Do you prefer you SaaS companies to customer acquisition or bookings? Why?
• What are you thoughts on channel vs direct for SaaS companies?
• What is the next SaaS vertical that attracts you?

Skills-Based Questions:

• What is the most important trait you look for in a VP of Sales? When interviewing for a VP of Sales, what are the primary qualities that are most important to you? What do you look for in a good sales leader?
• Any tactical coaching for the VP of Sales on what to do giving the economy?
• What are the 3 fatal mistakes Sales VP’s make and how to correct them?
• What is the role of the VP of Sales on an executive team?

Board Meeting Questions:

• What are the key metrics you want to see at board meetings assuming numbers are being hit and/or assuming there was a bad quarter? What do you like to see from the VP of Sales for board meetings?
• What level of detail do you want to see in board meetings - key status or actual forecast/pipeline deals?
• Besides good news, what other information could be delivered in the board meeting to make you confident that the VP of Sales is executing?
• What makes a good board presentation from sales?

Working with the Board Questions:

• How should the VP Sales work with the Board to help with selling referrals to their network?
• In ‘09 planning are you involving the VP of Sales for realistic input on sales goals?
• What do you do if the truth about sales contradicts what the CEO is saying?
• Any advice on how to handle a CEO who protects the board from hearing the real situation?
• When the VP of Sales provides their board update, what kind of feedback drives you crazy?
• What puts and takes do you like to see from a revenue and EBITDA standpoint?
• How and when should a VP of Sales present “bad news” on lowering the forecast?
• What most frustrates you when the VP of Sales delivers bad results?

General Opinion Questions:

• What does “improving sales effectiveness” really mean?
• Is it better to fess up early that the product is “not marketable” or keep plowing ahead to get results?
• In a startup, whats are the key milestones you like to see before scaling the sales team?
• Given the challenging times we are faced with today, and some of the uncertainty of the future how should a VP Sales be prioritizing their time now vs. last year?
• Should the VP Sales meet with VC’s independently of the CEO?
• How do you deal with Board members who have no operating experience?

As many VPs of Sales sit staring at the fax machine facing the last day of 2008, it seemed like a good time to put these questions forward for reflection and hopefully a little enlightenment. What are your questions? Do any of these questions surprise you? Got some answers / opinions you’d like to share?

I hope you have a fantastic 2009 (and great last day of 2008).

posted by Darren Cunningham at 4:04 pm

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