Category Archives: Board

The Triangle of Director Protections: D&O Insurance, Indemnification Agreements, and Charter Provisions

A corporate lawyer friend once told me to think about director protections as a triangle with three legs [1]:

  • D&O insurance, which stands for directors and officers insurance (and with which most people are familiar)
  • Indemnification agreements (with which some people are familiar)
  • Charter provisions (with which it seems almost nobody is familiar)

Why does this matter?  If you want to attract strong, experienced individuals to your board of directors, they are going to ask your company to provide reasonable and standard protections from potential liability associated with that work [2] [3].  The same holds true for corporate executive officers, though they are often less aware of the exposure.

And, by the way, as a founder/CEO you should want to protect yourself.

My goals for this post are to:

  • Put this topic on your radar, framed not just as “D&O insurance” but the “whole package” of director protections (i.e., the “triangle”)
  • Share what I’ve learned as a brief introduction and provide links to more authoritative posts (e.g., from law firms)
  • Remind you to seek legal counsel in addressing director and officer protections because the topic gets complicated fast, as the embedded links below demonstrate.

D&O Insurance
Most startups purchase some sort of D&O insurance fairly early in their evolution; VCs often require it.  Per this The Hartford post, “D&O insurance protects the personal assets of corporate directors and officers, and their spouses, in the event they are personally sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing a company.”

Woodruff Sawyer outlines Eight Reasons Private Companies Should Buy D&O Insurance:

  • Attracting new directors
  • VC requirements
  • Emerging risks
  • Regulatory exposures
  • Bankruptcy
  • M&A
  • Shareholder lawsuits
  • IPO considerations

Per this site, startups typically purchase between $1M and $3M in coverage and the median annual cost of a policy is $3,800 for companies having raised <$5M, $9,600 for those having raised between $5M and $20M, and $17,000 for those having raised >$20M.

Despite the acronym proximity, D&O should not be confused with E&O (errors and omissions) insurance, which protects your company from lawsuits claiming mistakes in professional services, and which many startups also often purchase.  Beyond the scope of this post, Silicon Valley Bank has a nice overall startup insurance primer, Everything Founders Should Know about Protecting Their Property, that also discusses business property and general liability insurance, employment practices liability insurance (EPLI), and with links to other types of commonly purchased insurance.

Indemnification Agreements
In my experience, indemnification agreements are important, but generally less well understood than D&O insurance.

Let’s start with defining indemnification.  Per this Cornell Law site:

To indemnify another party is to compensate that party for losses that that party has incurred or will incur as related to a specified incident.

So, in our context, indemnification means that if a director is sued as a result of their work with the company that the company will compensate them for any losses they sustain as a result.

An indemnification agreement is a contract that specifies that, provided the director meets a minimum standard of conduct (e.g., acted in good faith, acted in a manner reasonably believed to be in the company’s best interests, had no reasonable cause to believe they were acting illegally), the company will defend the director against the cost of certain claims, including legal fees, litigation awards, and settlement costs [4].  For an example, see this model indemnification agreement from The National Venture Capital Association (NVCA) [5], which provides a detailed introduction in its preface as well as detailed in-line comments.

As with all things legal, the devil’s in the detail on indemnification agreements.  Some of the bigger issues include:

  • Advancing expenses.  There’s paying your costs at the end of the process and then there’s paying them along the way.  To understand the need, imagine a case that costs $250K to defend over four years.
  • Specific circumstances.  In the indemnification mandatory or permitted?  Does it apply to all claims or only certain types?  What are the procedures and default presumptions to determine if the director is entitled to indemnification on any given case?
  • Duration.  Is the indemnification only for active directors? What if a director no longer serves on the board, but is sued in a claim related to work done in the past when they were active?
  • Choice of counsel.  If the company’s paying, does it get to pick the law firm?  What if the director wants to hire the most expensive firm in town?
  • Pathological cases.  I’m not 100% sure about this one, but I love corner cases so — what if the company is suing the director?  Does it have to indemnify them in that case as well?

When it comes startups, it’s important to remember the Achilles’ heel of indemnification: an indemnification agreement is only as good as the company’s ability to pay.  In situations where a startup goes “cash out” (as in, out of cash), that ability is zero.  Hence the need for the full triangle of director protections, including D&O insurance.

Charter Provisions
The last leg of our triangle is Charter provisions.  A corporate Charter, also known as a company’s Articles of Incorporation, is a document that establishes the existence of a corporation, is filed with the government, and that lays out the major components of a company including its objectives, structure, and planned operations.

When it comes to director protection, I believe the best practice is for the Charter to contain both (a) exculpatory charter provisions that limit or eliminate directors’ personal monetary liability and, (b) indemnification language that says the company will provide directors with the fullest indemnification allowed by law (e.g., “indemnification to the fullest extent permitted by [Delaware] law.”)

Apparently, a certain amount of indemnification is automatically provided by statute (in some states) and the “fullest indemnification allowed by law” language supplements that where necessary, allowing any specific indemnification agreements to kick in [6].  I know this point is technical, but I also know that the corporate lawyers with whom I’ve worked emphasize that D&O alone is not enough, you need to look at the whole triangle of director protections — and that Charter provisions are one leg of that triangle.

I hope you enjoyed this rather in-depth primer and that I successfully put this issue on your radar.  If you’re unsure about where your company stands on director (and officer) protection, you should give your lawyers a call.  I’m sure they’d love to hear from you.

List of Best Links I Found
I did a lot of web surfing to support this post.  Many of the pieces I found were not focused on a given subtopic, but the whole thing.  That’s good to the extent my primary argument is “look at the whole package,” but it was bad for my hyperlinking because it was, e.g., hard to find articles that discussed indemnification agreements without also discussing charter provisions.  Ergo, I recommend using control-F to scan through these articles if you are looking for one specific topic of interest.  In rough order of accessibility:

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Notes

[1]  I am not a lawyer; just a business person doing his best to try and figure things out and share what I’ve learned along the way.  See my FAQ and the blog’s license agreement for additional disclaimers as well.

[2] I am writing about for-profit enterprises, though those interested in non-profit boards also face potential liability issues.

[3] I have skin the game here; I serve on the board of directors of several companies.

[4] There is an argument that startup executive officers who are not directors should also have an indemnification clause in their employment agreement.  See your lawyer for more.

[5] The NCVA provides a great collection of model legal documents, including a voting agreement, a term sheet, a stock purchase agreement, and many others.

[6] I am at/beyond my legal depth here.  All I know is you should ask your lawyer what needs to in the Charter to provide for maximum director protection.  See the Skadden Arps two-part series linked above for more detail on this specific topic.

“The Board Brought Me In” Telltale

There’s only one executive who should ever say, “the board brought me in,” and that is the chief executive officer (CEO).  Yet, you’d be surprised how often you hear other executives — chief revenue officers (CROs), chief marketing officers (CMOs), chief product officers (CPOs), and most often chief financial officers (CFOs) — say, “the board brought me in.”

It usually comes up in an interview, with a candidate running through their background.

“Well, I was at XYZ-Co, and things were going great, but at PDQ-Co they needed some help, so the board brought me in to help get things back on track.”

A+ on storytelling, but (usually a) C- on reality attachment.  “And where,” methinks, “was the CEO during all this board bringing in and such?”

(And if things really were going so well at XYZ-Co, tell me why’d you jump ship to do a fixer-upper at PDQ-Co again?)

I always view “the board brought me in” language as a telltale.  Of what, I’m not entirely sure, but it’s usually one of these things:

  • Self-aggrandizement.  Sometimes, it’s just the candidate trying to sound larger-than-life and they think it sounds good to say, “the board brought me in.”  In this case, the candidate’s judgement and credibility come into question.
  • Innocent miscommunication.  Perhaps the candidate knew an existing board member and was referred into the position by them.  OK, I suppose technically they could think, “the board brought me in,” but didn’t the CEO interview them and make the final call?  Did the board really bring them in — as in, against the CEO’s wishes?  Maybe it’s just old-fashioned communications confusion.  Maybe.
  • Genuine confusion.  Or, perhaps the candidate is under the illusion that they somehow work for the board and not the CEO.  This can happen with CFOs in particular because, unlike all other CXOs, there is something of a special relationship between the board and the CFO.  But in tech startups, in my humble opinion, the CFO works for the CEO, period — not for the board.  They may have a special relationship with the board, they may meet with the board without the CEO being present (e.g., audit committees).  But they work for the CEO.  If you feel differently, great.  If you feel like I do — best to use this as a telltale of a potentially huge problem downstream.
  • A placeholder CEO.  There is always some chance the CEO is somehow a placeholder (e.g., a founder who’s lost all but positional power in the organization and acting in some lame duck capacity).  In this case, the CXO in question might just be saying the truth — perhaps the board really did bring them in.  But then the candidate’s going to need to explain why they jumped into such a mess [1].

I’m sure there are other possibilities as well.  But the main point of this post is to say that your ears should perk up every time you hear a CXO [2] candidate say, “the board brought me in.”  Mine do.

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Notes

[1] And I suspect the most common answer will be, “and they were planning to make me CEO in X months once they worked on the transition.”  In which case, I’d want to understand why the candidate is so trusting (or naïve), what written assurances were given, and why they would take a CXO job with a dubious call option on CEO as opposed to taking a straight-up CEO job.  (To which the best, but still somewhat unfortunate, answer is — it was the only available path I had at the time.)

[2] For all values of X != E.

 

 

Diary of a Novice NED: A Look Inside the World of Independent Directors at Startups

What’s a NED, anyway?

NED stands for non-executive director (also abbreviated as NXD) and it refers to a member of company’s board of directors who is not on the executive management team.  While NED is the more common term in Europe, in Silicon Valley we typically say “independent director,” which I have always taken to mean a director independent of both the company’s executive management team and the company’s venture capital (VC) investors.

Startup boards typically have three types of directors:

  • Founders, who represent the common stock [1]
  • VCs, who represent the various classes of preferred stock [2]
  • Independents, who represent (what they believe) is the good of the company [3]

By virtue of my joining the board of European work management leader Scoro, I came to meet Martin Fincham of The Gorilla Factory (presumably a reference to Geoffrey Moore’s metaphor), a fellow NED, and the board chair of Scoro.  So I naturally was eager to read Martin’s new book, Diary of a Novice NED, and put it on the top of my reading list once it came out.

While I won’t dare to review a book written by a new colleague (and our board chair!), I will say a few things about the book:

  • It’s a quick read, enjoyable, and at times quite funny.
  • It truly is a diary:  mostly written in the first person and with lots of interesting stories.
  • It bottles a lot of wisdom:  Martin seems to be a fellow reductionist, so the book features many pithy pieces of wisdom, derived from his years of experience.
  • It has a European tilt to it:   while it’s certainly relevant to startups everywhere, some things are different in Silicon Valley [4]
  • More than anything:  it provides a rare inside look at how Martin prepared for and made the jump to “going plural” [5], making a new and satisfying living as an advisor and director.

Diary of a Novice NED is available on Amazon here.  Congrats Martin and looking forward to the foreshadowed second book!

For my thoughts on how to be a good independent director, or NED, see here.

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Notes

[1]  While founders typically have common stock, they sometimes have their own series, often called Series F (founder), that has the same liquidation preference as the common stock, but additional rights such as multiple (e.g., 10x) voting rights or protective provisions.

[2] Read this paper from Wilson Sonsini for a look at the challenges faced by VCs in wearing two hats on company boards.

[3] For more on the role of an independent director, you can read this UK article, The Role of a NED, or this Utah Law Review paper, The Role of Independent Directors in Startup Firms.

[4] And it discusses tax “schemes” (I love the connotation difference between the UK and USA on this word) that are UK specific but, I believe, have rough spiritual equivalents in the USA (e.g., QSBS)

[5] Seemingly, a UK idiom for working with multiple companies as an advisor/consultant, as opposed to just working at one “real” job.

How To Be A Good Independent Board Member

I’m writing this from both the perspective of a former CEO (who would occasionally get sideways with his board) and that of a six-time independent board member.  I’ll look first from the CEO perspective, examining what I wanted in an independent board member (aka non-executive director), and second from the board director perspective [1].

The CEO Perspective:  What I Wanted in an Independent Director

As a CEO, I wanted:

  • An advisor.  Someone I could use as a sounding board for ideas and decisions.  As CEO, you have no peer group within the company [2], so it’s valuable to have someone who knows the company, is current on industry best practices [3], but who feels less boss-like than the VCs/investors on the board.
  • An expert.  Someone the board would look to for opinions.  This is important — when the board is leaning left and the CEO wants to go right, an expert who has been-there, done-that and whose opinion is respected by the board can be quite influential.
  • A supporter.  Someone who would have my back both in board meetings and, more importantly, if and when board members get together outside board meetings to discuss the company [4].  When things go sideways, this can be the difference between a reconciliatory conversation and a replacement CEO search [5].  Remember Sequoia founder Don Valentine’s famous quote:  “I am 100% behind my CEOs right up until the day I fire them.”
  • A diplomat.  Someone who, when times are tense, can work as an intermediary between the differing parties, often but certainly not always, the investors on one side and founders/management on the other. Former sales leaders often perform well in this situation [6].
  • A coach.  Someone who can help make the game plan for getting something done (e.g., decomposing and sequencing) while providing a pep talk or a kick in the butt, as indicated, along the way of doing it.

I think (and I’m obviously biased here) that current/former GMs and CEOs make better advisors than current/former functional heads [7] because they have wrestled with more of the issues that CEOs face.  The hardest part of the CEO job (for me at least), and the part for which climbing the corporate ladder leaves you most unprepared, is working for a board, not a boss [8].

I should add that ensuring proper corporate governance is an important duty for for the board, but while critical, I view it as table stakes and have thus excluded governance-related items from the list of differentiating attributes above.

The Board Member Perspective:  What I Think Makes a Good Independent Director

From my position on several boards, I think a good independent director is:

  • Someone who acts as an advisor, not a consultant.  People sometimes confuse the two.  Advisors respond and consultants create.  Advisors provide feedback on your ideas, plans, and deliverables.  Consultants play a role in making them.  Put differently, advisors can show up to a discussion without doing any homework; consultants do the homework to create the materials for the discussion.
  • Someone who builds a 1-1 relationship with the CEO and delivers the vast majority of their value-add through that relationship [9].  Board meetings are great, but they typically involve a large group of people and are part performance art and part working group.  Important decisions do get made in board meetings, but a lot of education, detail-driving, consensus-building, and other value-add happens outside.
  • Someone who brings ideas and best practices.  It’s easy to get myopic when you’re building a company; there is so much to do inside, it’s easy to forget to look outside.  Good independent directors stay current on best practices (e.g., systems, methodologies, tools) and bring them to the CEO and the company.  See my current Gong evangelization as an example.
  • Someone who’ll have hard conversations.  Nobody likes being told things that they don’t want to hear, but somebody needs to do it.  The good independent director tells the CEO when their go-to-market analysis is weak, their hiring plan is completely unrealistic, or they should pay more attention to a competitor who’s intent on eating their lunch.  These contrapuntal conversations aren’t always pleasant, but they can add a lot of value.
  • Someone who challenges the CEO on strategy and executive team hiring and composition.  These are absolutely key CEO duties.  Too often strategies lack focus, and executive recruiting processes lack discipline.   Executive team composition, at a high-growth company, is a constant struggle [9A].  Someone needs to say things like, “you’re trying to be everything to everybody,” “the three CFO finalists have completely different profiles,” or “why is every e-staff member in the biggest job they’ve ever hard?”  We need a focused strategy that we can execute.  We need finalists to fit an agreed-to profile [10].  We need a team that balances up-and-comers with veterans.
  • Someone who inspects the troops.  Call me old school, but I think an important part of every (post-quarter) board meeting is a brief operational review where each functional heads presents the status of their department.  While experience has taught me that this is a better way to discover bad apples than identify good ones [11], I nevertheless believe it’s an important part of a meeting.  As a former operating executive, the independent director should take the lead in this inspection.
  • Someone who pushes for standard metrics and templates.  This is not primarily because I like metrics, but because it is human nature to cherry-pick metrics and the only way I know to prevent such cherry-picking is to design standard, holistic templates and use them at every meeting.  That eliminates any possibility of only talking about the good metrics and omitting the bad ones.  If the board doesn’t know about a problem, they can’t help solve it.  Standard templates ensure they know.

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Notes

[1] Knowing full well that the CEOs you’re supporting should be the final judge of that.

[2] Which why it’s a nice idea to get one outside the company via one of many CEO groups

[3] Some operating execs let themselves get pretty rusty in this regard.  Having worked with highly pedigreed but anachronistic advisors, I work hard to stay current in operating models and topics.

[4] This might be a closed-closed session after the usual board/CEO closed session, or it might be separate formal or ad hoc meetings where non-executive board members and investors have discussions.

[5] Founders typically worry about the latter less, but hired CEOs do and probably should worry about it more.

[6] Who later go into GM or CEO jobs to best pass all my tests.

[7] With the exception of CFOs for audit committees and such.

[8] This is particularly true on venture-backed startup boards where there is comparatively more “cat herding” than on PE boards which, while they have their own challenges, are usually more clear and singular in what they want.

[9] It should always include the CEO.  It might also include relationships with the CRO, CFO, CMO or other advisor-relevant functional head.

[9A] The fundamental tension between the cliché conflict between:  “dance with who brung ya” and “the people that got us to this level aren’t [necessarily] the ones to take us to the next.”  (See slides 11 to 16 of this presentation.)  [Necessarily] added because some people seem to think that getting the company to Level X is actually a liability in the climb to Level X+1.

[10] Deciding whether you want a CFO from an accounting/controller background or a finance/FP&A background should be decided long before you have a list of finalists.

[11] If someone is bad at presenting their department, they are typically bad at running it.  However, the converse is not true:  if someone is good presenting their department they may or may not be good at running it.  Some execs “give good meeting” such that they paint a rosy picture of a broken function.

The First Three Slides of a SaaS Board Deck, with Company Key Metrics

I’m a SaaS metrics nut and I go to a lot of SaaS board meetings, so I’m constantly thinking about (among other things) how to produce a minimal set of metrics that holistically describe a SaaS company.  In a prior post, I made a nice one-slide metrics summary for an investor deck.  Here, I’m changing to board mode and suggesting what I view as a great set of three slides for starting a (post-quarter) board meeting, two of which are loaded with carefully-chosen metrics.

Slide 1:  The Good, The Bad, and the Ugly
The first slide (after you’ve reviewed the agenda) should be a high-level summary of the good and the bad  — with an equal number of each [1] — and should be used both to address issues in real-time and tee-up subsequent discussions of items slated to be covered later in the meeting.  I’d often have the e-staff owner of the relevant bullet provide a thirty- to sixty-second update rather than present everything myself.

slide 0The next slide should be a table of metrics.  While you may think this is an “eye chart,” I’ve never met a venture capitalist (or a CFO) who’s afraid of a table of numbers.  Most visualizations (e.g., Excel charts) have far less information density than a good table of numbers and while sometimes a picture is worth a thousand words, I recommend saving the pictures for the specific cases where they are needed [2].  By default, give me numbers.

Present in Trailing 9 Quarter Format
I always recommend presenting numbers with context, which is the thing that’s almost always missing or in short supply.  What do I mean by context? If you say we did $3,350K (see below) in new ARR in 1Q20, I don’t necessarily know if that’s good or bad.  Independent board members might sit on three to six boards, venture capitalists (VCs) might sit on a dozen.  Good with numbers or not, it’s hard to memorize 12 companies’ quarterly operating plans and historical results across one or two dozen metrics.

With a trailing nine quarter (T9Q) format, I get plenty of context.  I know we came up short of the new ARR plan because the plan % column shows we’re at 96%.  I can look back to 1Q19 and see $2,250K, so we’ve grown new ARR, nearly 50% YoY.  I can look across the row and see  a nice general progression, with only a slight down-dip from 4Q19 to 1Q20, pretty good in enterprise software. Or, I can look at the bottom of the block and see ending ARR and its growth — the two best numbers for valuing a SaaS company — are $32.6M and 42% respectively.  This format gives me two full years to compare so I can look at both sequential and year-over-year (YoY) trends, which is critical because enterprise software is a seasonal business.

What’s more, if you distribute (or keep handy during the meeting) the underlying spreadsheet, you’ll see that I did everyone the courtesy of hiding a fair bit of next-level detail with grouped rows — so we get a clean summary here, but are one-click away from answering obvious next-level questions, like how did new ARR split between new logos and upsell?

Slide 2:  Key Operating Metrics

Since annual recurring revenue (ARR) is everything in a SaaS company, this slide starts with the SaaS leaky bucket, starting ARR + new ARR – churn ARR = ending ARR.

After that, I show net new ARR, an interesting metric for a financial investor (e.g., your VCs), but somewhat less interesting as an operator.  Financially, I want to know how much the company spent on S&M to increase the “water level” in the leaky bucket by what amount [3].  As an operator, I don’t like net new ARR because it’s a compound metric that’s great for telling me there is a problem somewhere (e.g., it didn’t go up enough) but provides no value in telling me why [4].

After that, I show upsell ARR as a percent of new ARR, so we can see how much we’re selling to new vs. existing customers in a single row.  Then, I do the math for the reader on new ARR YoY growth [5].  Ultimately, we want to judge sales by how fast they are increasing the water they dump into the bucket — new ARR growth (and not net new ARR growth which mixes in how effective customer success is at preventing leakage).

The next block shows the CAC ratio, the amount the company pays in sales & marketing cost for $1 of new ARR.  Then we show the churn rate, in its toughest form — gross churn ARR divided not by the entire starting ARR pool, but only by that part which is available-to-renew (ATR) in the current period. No smoothing or anything that could hide fluctuations — after all, it’s the fluctuations we’re primarily interested in [6] [7].  We finish this customer-centric block with the number of customers and the net promoter score (NPS) of your primary buyer persona [8].

Moving to the next block we start by showing the ending period quota-carrying sales reps (QCRs) and code-writing developers (DEVs).  These are critical numbers because they are, in a sense, the two engines of the SaaS airplane and they’re often the two areas where you fall furthest behind in your hiring.  Finally, we keep track of total employees, an area where high-growth companies often fall way behind, and employee satisfaction either via NPS or an engagement score. [9]

Slide 3:  P&L and Cash Metrics

slide 3 newYour next (and final [10]) key metrics slide should include metrics from the P&L and about cash.

We start with revenue split by license vs. professional services and do the math for the reader on the mix — I think a typical enterprise SaaS company should run between 10% and 20% services revenue.  We then show gross margins on both lines of business, so we can see if our subscription margins are normal (70% to 80%) and to see if we’re losing money in services and to what extent [11].

We then show the three major opex lines as a percent of revenue, so we can see the trend and how it’s converging.  These are commonly benchmarked numbers so I’m showing them in % of revenue form in the summary, but in the underlying sheet you can ungroup to find actual dollars.

Moving to the final block, we show cashflow from operations (i.e., burn rate) as well as ending cash which, depending on your favorite metaphor is either the altimeter of the SaaS plane or the amount of oxygen left in the scuba tank.  We then show Rule of 40 Score a popular measure of balancing growth vs. profitability [12].  We conclude with CAC Payback Period, a popular compound measure among VCs, that I could have put on the operating metrics but put here because you need several P&L metrics to build it.

I encourage you to take these three slides as a starting point and make them your own, aligning with your strategy — but keeping the key ideas of what and how to present them to your board.

You can download the spreadsheet here.

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Notes

[1] I do believe showing a balance is important to avoid getting labeled as having a half-empty or hall-full perspective.

[2] I am certainly not anti-visualization or anti-chart.  However, most people don’t make good ones so I’d take a table numbers over almost any chart I’ve ever seen in a board meeting.  Yes, there is a time and a place for powerful visualizations but, e.g., presenting single numbers as dials wastes space without adding value.

[3] Kind of a more demanding CAC ratio, calculated on net new ARR as opposed simply to new ARR.  For public companies you have to calculate that way because you don’t know new and churn ARR.  For private ones, I like staying pure and keeping CAC the measure of what it costs to add a $1 of ARR to the bucket, regardless of whether it stays in for a long time or quickly leaks out.

[4] Did sales have a bad quarter getting new logos, did account management fail at expansion ARR, or did customer success let too much churn leak out in the form of failed or shrinking renewals?  You can’t tell from this one number.

[5] There are a lot of judgement calls here in what math you for the reader vs. bloating the spreadsheet.  For things that split in two and add to 100% I often present only one (e.g., % upsell) because the other is trivial to calculate.  I chose to do the math on new ARR YoY growth because I think that’s the best single measure of sales effectiveness.  (Plan performance would be second, but is subject to negotiation and gaming.  Raw growth is a purer measure of performance in some sense.)

[6] Plus, if I want to smooth something, I can select sections in the underlying spreadsheet using the status bar to get averages and/or do my own calculations.  Smoothing something is way easier than un-smoothing it.

[7] Problems are hard to hide in this format anyway because churn ARR is clearly listed in the first block.

[8] Time your quarterly NPS survey so that fresh data arrives in time for your post-quarter ops reviews (aka, QBRs) and the typically-ensuing post-quarter board meeting.

[9] Taking a sort of balanced scorecard of financial, customer, and employee measures.

[10] Before handing off to the team for select departmental review, where your execs will present their own metrics.

[11] Some SaaS companies have heavily negative services gross margins, to the point where investors may want to move those expenses to another department, such as sales (ergo increasing the CAC) or subscription COGS (ergo depressing subscription margins), depending on what the services team is doing.

[12] With the underlying measures (revenue growth, free cashflow margin) available in the sheet as grouped data that’s collapsed in this view.