Leaders of Growth in B2B SaaS - with Arthur Nobel, Knight Capital

**Ray Rike** (0:00)
Hello, I'm Ray Reich, founder and CEO of RevOp Squared, and your host of the Metrics That Measure Up podcast. We talked to a wide variety of B2B, SaaS, and Cloud thought leaders, executives, investors, and people just like you to discuss the metrics and benchmarks they use to make metrics informed decisions. Now on to today's show.
Welcome to today's episode of the Metrics It Measure Up podcast. Today, we are joined by Arthur Nobel, Principal at Knight Capital, a leading VC firm in Europe, and co-author of the soon to be published book, Leaders of Growth. Today, we will be covering four key findings from the book with Arthur. Number one, the baseline definition of startup phases of evolution. This is really important for the rest of the conversation. Number two, the most common scaling challenges of B2B startups and how they differ by stage. Number three, some of the top ideas and techniques to address those challenges that Arthur discovered during his authoring of the book. And fourth, common themes or traits shared by the participants and the leaders of growth. Arthur, please take a moment to give a brief background of your journey to becoming a guest on the Metrics Measure Up podcast.

**Arthur Nobel** (1:30)
Thanks, Ray, for having me. As you know, I'm a big fan of the podcast. I'm really great and honored to be here today. So just to introduce myself quickly, I joined the startup world back in 2014, after I learned that corporate weren't really my thing. After some projects, I joined the venture capital world. I worked for seed funds and the series B funds. And then afterwards, I thought, now I know the startup sites, I know the VC side that started my own company. And the mission was with my own company was to enable remote work to the masses, which was back in 2017, 2018, like a big challenge, which unfortunately, I learned the hard way that market timing is everything. But I took some great learnings out of that related to building a team, raising funds, and basically building a startup. So from there, always for all the founders I speak with today, big empathy for them because of the journey I went through myself. And then fast forward, I joined Knight Capital in 2020, as you mentioned already, where VC focused from Series A to C funding, specialized in go to market. And one of the things what we wanted to do is create a book that would really help the broader community that basically struggle with finding content from the states, I would say, after product market fit, but before the big successes like raising hundreds of millions of euros. So that in between states, we felt there are some challenges there, and that's why we decided to write the book.

**Ray Rike** (2:55)
Well, before we jump into a lot of the findings and things that you found interesting from writing the book, I wanted to start with setting the foundation for our listening audience, and that is, you mentioned Seed Series A, and I've seen a lot of evolution of what a seed stage or series A company is in the last year or two. So for our audience, can you define what are the attributes of each stage of growth that we're going to be referring in today's podcast?

**Arthur Nobel** (3:22)
Great. As you said, there are different opinions about how to look at it. I cannot say I have to find the truth here. Shall we maybe share first sort of three lenses, the three perspectives on how to look to seed series A, et cetera?

**Ray Rike** (3:35)
That's great.

**Arthur Nobel** (3:36)
Perfect. So the three lenses, I actually learned it from Joyce from Pekka Fund. I think we'll be both know well. The three lenses are first, you can think of fundraising and have a sequential approach. So the series A follows after the seed round, and after series A you get series B, series C and on March. So that's a sequential approach. The second approach is the revenue threshold fault. I think that's pretty popular, but not always correct in my view. And that is, for instance, if you're in 1 million revenue per year, then you're in seed. If you're 1 to 4 million annual revenue, that's, let's say series A, 4 to 10 million series B, and over 10 million you get, let's say, into the seed round. But that's the second bucket. And the third perspective, which I like to join myself as well, is the maturity model, which basically looks how mature is the overall business. It's very hard to make this very tangible. That's why I don't think it's widely adopted. But it generally says that a business who has, for instance, 500K in AR, but which is, for instance, product-led growth business with hundreds of customers, can have actually quite high majority. So it qualifies for a series A round of funding. Whereas some other businesses, which don't have any replicability, with, for instance, 2 million in annual revenue, it's maybe harder to even classify it as a series A type of funding. Then, of course, in this approach, I have included, I would say, general B2C and B2B type of businesses.