Dear SaaStr: How Do I Structure My First 1-25 Sales Reps?

Q:  What is a typical organizational structure for a SaaS startup with sales reps?

A rough structure from 1–25 sales reps:

Early days:

• CEO acts as VP of Sales.
• CEO hires 2 reps, in the beginning, each barely pays for themselves, but by months 4–6 they are able to close 3x-5x their total compensation.
• Once 2+ reps can do 3x-5x their comp, the model gets pretty efficient.

Then:

• Have to scale from reps 3–8 or so. CEO often struggles to manage so many directly.
• CEO starts looking for true VP of Sales before $1m, ideally hires one by $1m in ARR.
• VP of Sales hires next 5–10 reps herself.

After 8–10 reps, you have to add more management:

• A VP of Sales can probably only manage 6–8 reps and a handful of SDRs herself.
• So for each 8 AEs or so, and 8–10 SDRs, you need a Director to manage them, or at least a team lead.  You can’t skip this step.
• You also start specializing more here. Segmenting by customer size, and sometimes geography.
• By 15 sales reps, you probably need a first head of sales operations to handle training, onboarding, compensation, quotas, etc. Earlier if you can afford it.