Every founder reaches a critical juncture: excelling in sales calls and closing deals but becoming overwhelmed as responsibilities pile up. The challenge is knowing when and how to step away from being the primary closer without affecting growth. Many founders either exit sales too soon, resulting in declining conversion rates, or hold on too long, stalling their growth.
**The First Mistake: Leaving Sales Prematurely**
Thinking you can delegate sales after a few successful deals, or reaching $1M ARR, is a common error. Founder-led sales are key to forming your market strategy. The firsthand market insights you gather are invaluable. Especially with vertical SaaS, remain hands-on until at least $10M ARR to leverage your expertise and credibility.
A founder shared, “I hired a VP of Sales at $2M ARR expecting to scale, but six months later, our conversions fell 40% and I was back handling important calls. I should have stayed involved longer.”
**The Correct Initial Step: Employ 2 AEs Before Recruiting a Head of Sales**
When scaling (usually around $1M-$2M ARR), hire your first Account Executives instead of immediately appointing a VP of Sales. Choose AEs that you would purchase from yourself—those who understand your product and mission. These AEs will help manage the workload and allow you to refine the sales process, testing your strategies before passing the baton to a sales leader.
A founder, who grew from $2M to $20M ARR, noted, “Our first two AEs were ex-customers who transitioned to sales. Their genuine understanding of buyer pain was invaluable and authentic.”
**Selecting Your First Head of Sales: A Complement, Not the Culmination**
At about $2M-$3M ARR, you might be ready for a Head of Sales, but understand this role isn’t permanent. They might evolve with the company, but it’s fine if they don’t stay until IPO. They help build the groundwork for future sales infrastructure. Find someone who complements your skills. The ideal first Heads of Sales are often emerging talents ready for a VP role—a player-coach, process-builder, and always recruiting.
**Founders Remaining Engaged: Strategic Deal Participation**
A common error is assuming that appointing a Head of Sales means stepping back entirely. Especially post-Series A, CEOs might disengage from sales, which often leads to a decline. Even with strong sales leadership, founders should stay involved in significant deals. Their presence brings unique credibility in crucial negotiations.
A CEO articulated it well: “I’m involved in deals that could alter our trajectory. My team signals when my presence is crucial, which I trust them to judge.”
**Affording Sales Leaders the Latitude to Construct**
Once transitioned, allow your sales leaders the liberty to operate without micromanagement, especially for routine transactions. Your Head of Sales might hire differently—embracing diverse reps enhances team performance. Set expectations and measure outcomes without questioning every hire.
A founder mentioned, “I hesitated with a hire by my Head of Sales, but that rep outperformed because they understood our SMB buyer better than me.”
**Building the Framework for Growth**
Approaching $10M ARR, optimize your revenue operations with investments in:
– **Sales Operations:** Managing tech stacks, performance analytics, and process optimization.
– **Demand Generation:** Multi-channel strategies beyond early outbound tactics for lasting growth.
– **Customer Success:** To maintain low churn and prioritize retention.
These components create a scalable sales engine, more robust than any single sales rep.
**Crucial Metrics: Monitoring Development**
This is about establishing a scalable sales process. Focus on:
– **Rep and Deal Win Rate**
– **Sales Cycle Duration**
– **Pipeline Coverage**
– **CAC vs. LTV**
Immediate diagnosis and intervention are required if these metrics waver to prevent systemic issues.
**The Long-Term Reality: The Founder as the Ultimate Closer**
Recognize that as CEO, you’ll always be the top closer for pivotal deals, leveraging your product knowledge and decisive capabilities. Strategically manage your involvement, focusing on transformative opportunities and trusting your team.
A scaling founder shared, “I now join only seven-figure deals, ensuring my participation is impactful.”
**Patience in Transition Yields Results**
The phase of founder-led sales is demanding. Although it’s taxing, a premature transition can be detrimental. Establish solid foundations with trusted personnel, clear processes, and supporting infrastructure. Remain engaged enough to intervene when necessary.
Successful companies treat this as a gradual evolution, crafting systems to utilize the founder’s strengths. Your ultimate VP of Sales will appreciate inheriting a sturdy, scalable system rather than having to resolve a flawed setup.
**The shift from founder-led sales is about when you begin scaling your creation.**