Head of Insights
You know, one of the exciting things about hosting SaaS Metrics Palooza is I get to identify new thought leaders and influencers who just have to be followed by B2B SaaS executives. And we have two at this year's event. And our next speaker is one of those that I really just came across a little over a year ago. I'm so pleased and honored that Peter Walker, who's the head of insights at Carta, is here at SaaS Metrics Palooza 23. Peter, welcome to the show. Ray, great to be here. Really appreciate it. And with that, the stage is all yours. Thank you. All right. So we're going to talk through everything that Carta does about the state of startups in 2023. If you're not familiar with Carta, we are a cap table management platform serving about 40,000 startups these days, both in the U.S. and globally. We also run the back office for around 5,000 venture funds. So those are SPVs and also full VC funds. And that gives us this really unique perspective on what's happening in the private market, because we can marry the cap table data, which gives us valuations, fundraising, et cetera, with the VC data on investment pace and other wonderful metrics combined, gives us this sort of unparalleled view into the state of startups right now. So I'm going to rip through a ton of data on what we know about startups, but we're going to start with a little bit of overall market dynamics. What is the general context that we need to know about startups, especially in the U.S. so far in 2023? Well, the biggest story that we're probably all familiar with is that we are a long way from 2021, which was the peak within startup fundraising. If you take a look at that black line of this chart, that's total invested capital into Carta startups quarter over quarter. And you can see that in Q4 of 2021, those collective Carta startups raised about $66 billion, which is just a wild amount for a single quarter. And then if you take it down to the most recent full quarter that we have data for, Q2 of 2023, that's only $17 billion raised. And there are more startups on Carta now than there were two years ago. So you can see that the fundraising environment overall has gotten much more restrictive. Venture capitalists are being much more choosy about the cash they choose to invest in startups. And if you want to know where the biggest drop has happened, you need only look at the major mega rounds that take place with these sort of more late stage companies where they've raised over $100 million in a single round. We had 156 such rounds in Q4 of 2021. And now we had 23 in the most recent quarter, a drop of 85% over that call it five to six quarters. Again, that is a massive whiplash from the heyday of 2020 and 2021. But of course, fundraising dollars are not the only metric by which we want to judge the health of a venture ecosystem. So valuations are perhaps equally important. Each one of the lines on this chart represents a different series, a different stage of startup fundraising, series A, series B, et cetera. And if you compare the valuations today to the valuations of Q1 2019, so this is all the way pre-pandemic, things don't actually look so bad. You know, series A startups on Carta are about 60% more valuable on a post-money valuation based or excuse me, a pre-money valuation basis than they were in Q1 of 2019. That's not so bad. Series D, it's down a little bit, but you can see that there's this huge bubble that takes place in 2021. And to be honest, most people don't compare valuations now to valuations in 2019. What they do is they take it from the peak to the trough. So they go, hey, where was the peak level of valuations, which for us in our dataset was Q4 of 2021, and how are things doing today? And on that basis, there is a ton of pain across the startup ecosystem. Series A valuations are down 22%, series B and series C valuations down nearly 50%, and series D valuations down nearly 70%. So just to put that in context, if you raised a series D round in the Q4 of 2021, about half of those rounds made new unicorns. They created new startup companies that were worth over a billion dollars. Today, the median valuation for a series D company on Carta is something like $300 million, maybe even a little less. So again, that is a gigantic seed change from the optimism of 2021 to the relative pessimism of 2023. And that is what startup founders are dealing with. Not only the fact that things are lower now, but the pace of change has just been so rapid over the last two years. And if you take a look at all of these series plotted together, the blue line on this chart shows you the median pre-money valuations and the black line, the total round volume for each one of these stages. And you can see that there's a real bifurcation that happens at the earliest part of the market seed in series A in particular, where the valuations just haven't fallen nearly as quickly as the activity or the funding that happens to startups. In series B and beyond, those two lines sort of marry up much more closely. But there is this, again, bifurcation dichotomy happening, especially within seed stage, where yes, there are less funding rounds and less total dollars, but valuations really haven't dipped very much at all. And so people are talking about the seed stage premium right now because of that increased or rather plateaued level for the pre-money valuations. There's a lot of reasons behind this, primarily that there is a ton of capital that is going into seed stage companies that is waiting on the sidelines. And it seems as though seed stage is far enough away from the turmoil in the public markets that venture capitalists are still willing to take those bets. But it's definitely true that seed and its sister stage, pre-seed, they seem to be functioning entirely differently than the rest of the venture market. So yes, there are fewer rounds happening, but the type of rounds that are actually taking place are also very, very different than they used to be. About 20% of all of the venture rounds on Carta so far this year have been down rounds. And that is a much higher percentage than we are used to seeing. The typical down round percentage on Carta hovers between maybe 8% and 10% in a normal year. So 20% being down rounds, in some ways this is a silver lining in my view because it means that founders and investors are actually coming to an agreement that, hey, we were overvalued the last two years, let's take on a new valuation at perhaps a lower rate, but we can make some employees more whole using that valuation and we have a lot of room to grow. Unfortunately, these down rounds don't represent the entire market because some startups are not able to raise any funding and are therefore going bankrupt. So you can see this chart shows the number of startups that have gone bankrupt year over year on Carta. And again, these are startups that have at least one price round in their history. So these are not pre-seed startups that are looking for their first dollar. These are startups that have already been backed by venture capitalists. And more startups that have been backed by VCs have gone bankrupt this year than happened all of last year. Yes, there are more startups on Carta so you would expect some of this to gradually increase, but no, this bankruptcy increase is outpacing the number of startups on Carta by a considerable amount. And we expect that this will be the worst year for startups going bankrupt of any in our history. Where are those bankruptcies actually happening? The biggest inflection point that we've seen is the Series A level. So these are companies that have already raised a Series A and they're looking to raise a Series B and they are just unable to find backing from either their current investors or new venture capitalists. Already 75 of those have taken place this year. That's well above the 58 that took place last year. But you can see that this pattern is repeating itself in Series B, Series C and late stage and even within seed stage startups. So a lot of startups that took on some funding in the boom times of the last three or four years are finding themselves sort of unable to raise more capital this year. So where are VCs actually spending their time if they're not giving those new primary rounds out and companies are going bankrupt? It looks like to us that they're spending more time and more attention on bridge rounds. So to lay out this chart for you, the gray bars are everything from 2020 and 2021. The orange bars are 2022 quarters and the black bars are 2023 quarters. And this shows just the percentage of all of the rounds on Carta that were bridge rounds as opposed to primary rounds. To dig into those definitions real quickly, a primary round is just the first round in a series. So you go out and you raise a Series A, for instance. A bridge round is going back typically to the same investors and raising another extension of that Series A. So it might look on the deal terms as a Series A-1 preferred, anything that has the same round name as the prior primary. And you can see that bridge rounds are rising basically across the board. You know, 41% of all the Series A rounds on Carta in the last complete quarter were bridge rounds. So that is an indication that venture capitalists are spending a ton of time with their current portfolio. In fact, we hear from VCs all the time that basically their entire portfolio, or a very high percentage of it, is coming to them for more cash essentially at the same moment. So it's true that a lot of these VC bets were going to, you know, end up being zeros anyways through the portfolio economics. But it is pretty rare to see all of your portfolio companies needing a bridge round basically in the same, you know, six to nine month period. And so VCs are having to choose among the bets they've already made, and which ones are they going to double down on, and they just do not have enough capital to double down on all of them. So a lot of bridge rounds, a lot of time and attention. And then that sort of bleeds into the next chart, which shows deal structure. So in the heyday, back in 2021 again, these sorts of deal terms that are pretty favorable to investors, they became a lot less common within term sheets. They didn't disappear entirely, but they were pretty rare. As you could expect, if there's, you know, a frenzy of deal making activity, and you are a VC trying to get into the hottest rounds, you're probably not going to ask for very onerous terms from that founder. But today, things like liquidation preferences, participating preferred stock, cumulative dividends, all of those things as a percentage of total deals are rising. So if you're a founder watching this, just know that you are very likely going to encounter some of these terms within your negotiation. And most of these terms simply place the investor at a higher position on the waterfall of a cap table than the founder or the employees. So even if you have a wonderful exit, it might not mean much for your employees because the investor is going to take more of that capital once it's actually become liquid. So really important that founders make sure that they are aware of the 1x liquidation preferences or higher participating preferred stock, etc., before they sit down and close a new deal. And all of this sort of back and forth negotiation, different deal terms, the bridge round data, this just means that rounds are taking longer to close and the time between primary rounds has lengthened. So it used to be that the going advice with InVenture was have about 18 to 24 months of runway between your primary rounds. So between, say, a Series A and a Series B. That time needs, that advice needs to be adjusted these days. Those rounds are taking about 20 to 30% longer to close than they used to, which means that if you had 18 months, it's very likely that that's not going to last you as much time as, or you won't be able to get to the next milestone as quickly as you thought. So we see that orange line there is the average number of days. The black line is the median. And you can see the average number of days in many of these cases is pushing up closer to two and a half years. And again, that's just the average. So there are some companies that are not able to raise funding and they go out of business. And there are some companies who are really, really having to cut costs in order to increase runway. And that actually has real deep implications, of course, for employee headcount and the like. So speaking of that, we just kind of went over the context. How does the general fundraising market look for US startups? But I think an under-reported aspect of how these funding changes impact the ecosystem is the trickle-down effect they have on startup employees. So the one that actually does generate headlines, of course, is startup layoffs. And you can see in this chart, Carta has great data on when an employee is laid off from a startup because that employee's equity grant is typically terminated very, very, very close to the date that they are actually let go. So we know in our systems pretty much one-to-one when an employee leaves a company. And the employee, or the admin in this case, needs to enter in a reason why that employee is leaving a company. And the two main choices are left voluntarily, perhaps for another job, maybe they're starting their own business, whatever. And then laid off, of course, or fired with cause. You can see that the two lines here, the blue layoff line and the black voluntary leave line are sort of trundling along pretty normally in 2019. You've got that spike in 2020 when the pandemic happened and there was a lot of uncertainty, a lot of startup layoffs. And then you see the great resignation period in 2021. The blue line remaining super low, the black line shooting upward. And then those two lines invert in recent months. So there is definitely going to be an increased level of layoffs throughout the rest of 2023, we expect. The worst month for layoffs in Carta history was January of this year. But I'd like you to focus on the black line, which I actually think tells sort of a more nuanced story. That shows that employees in this current moment are being impacted by the headlines. They understand the job market and they are actually just sticking around in their current positions longer than they used to. And that again has ripple effects on the rest of startup hiring because there are less need to backfill those employees. And so general hiring across startups just moves more slowly. It's got a lot of kludge in the system. So ideally what we would like is to see that black line turn up a little bit through the end of the year and hopefully the blue line remains low. But unfortunately, I think there's going to be more pain to come within startup headcount as we move forward through the end of this year than perhaps into early next 2024. We have, in addition to the startup layoff data, we also have a ton of information about what startups are paying their employees, both in salary and equity. The key takeaway from this chart is that salaries were rising, perhaps not as quickly as inflation, but they were rising at quite healthy rates in 2021 and early 2022. And they've basically leveled off and started to plateau. So if you look at from November 8th of 22 to May 25th of 2023, you can see that there's basically very little change to what a new hire, say a level five engineer is being paid in San Francisco. This indicates to me that there's going to be maybe even a slight decline in salaries through the end of the year. And what we haven't visualized here, but we just put out some new data on is that equity packages have actually declined quite a lot faster than salaries. So there was a hypothesis at the beginning of this downturn that, well, if startups don't give employees as much cash, perhaps they'd make up for it by giving them more equity. And that just hasn't proven true. In fact, the negotiating leverage for startup employees is quite low at the moment. And they're just taking most of the offers that they're given. So it is a more hiring friendly market, is a more employer friendly market when it comes to new hires than any that we've seen in the last three or four years. And all of this sort of culminates in startup employees choosing not to exercise their equity. So if we take a step back, typically a startup employee is given incentive stock options when they join a startup. Those incentive stock options have two main criteria in order to become real shares of the company. First, they need to vest by the employee staying for a given length of time. And second, the employee needs to exercise them or outlay some cash in order to buy the shares from the company and enjoy that future upside. And you can see in recent months, employees are just not exercising their vested equity. They are choosing to let it go back to the company. So this is a pretty bearish signal from startup employees about the prospects of their own companies. Although most of these employees in this case would have been leaving their companies and have that 90 day window in order to exercise. My hope is that this is a lagging indicator and things are going to turn up a little bit on the exercise front once valuations find a more stable home. But it's true that employees are just not seeing a ton of value out of their equity compensation at the moment. Okay, so we've been through the context of fundraising. We've seen how those fundraising data points have impacted startup employees. So let's talk about the market right now. If you are a seed stage founder, hopefully this chart is helpful for you. Seed stage valuations on Carta for US startups have hovered right around $13.5 million or so through the beginning of this year. We'd expect that to rise just a little bit, maybe up to $14 million in the coming quarters. But that's the going rate for a US seed stage startup. That's on a pre-money valuation basis. Again, one of the interesting points here is those gray bars on the chart is the round volume. You can see that we saw 880 rounds for seed stage companies in Q4 of 21 and 441 in Q2 of 23. So basically an exactly 50% cut. So these valuations are strong, but the rounds have definitely followed up in terms of the pace. When we look at the Series A through Series D rounds, we see that the valuations are rising slowly. So if you focus on the right side of this chart, those final boxes there, you can see that the median Series A on Carta is going at about a $40 million rate. Series B, it's $85 million. Series C, it's $255. And those numbers have climbed quarter over quarter. I think they hit their lowest point usually in Q1 of this year. So good to see climbing. Again, this is on much lower round volume, but at least the valuations are no longer falling. And kind of the same pattern repeats itself with round sizes. The median Series A round is about $11 million. Series B, $20.5 million. Series C, $31.5 million. But again, if you look back to where they were in Q1 of last year, that is still a significant decline. The companies that were raising a Series C on Carta last Q1 got about $50 million in the bank, and now they're getting about $30 million. So venture capitalists are investing less per round, and they're expecting founders to do more with less, which probably explains the hiring slowdowns and, of course, some of the headcount cuts as well. One of the things that we hear when we put out this kind of data around a given stage, in this case Series A, is that, yes, the median is useful, but it obscures a lot of differentials between industries that happen across different startups. The median biotech startup is quite different than an ad tech startup or a startup doing DTC retail. And that's very true. And so we like to break it out into these bubble charts. The higher the bubble of this chart, the more cash in a given round. The further to the right, the higher the valuation assigned by venture capitalists. So you can see that renewable energy, that green bubble on the top right there, not a ton of rounds happening in the first half of this year. But the rounds that were happening were doing at quite healthy valuations and quite a lot of cash raised. It turns out you need a lot of capital in the bank to build a renewable energy startup. And then you can see the bubble sort of flow down, general SaaS, B2B SaaS is always the biggest category for us. And then some industries that are perhaps not as in favor right now with VCs, some gaming and then personal products in particular, there has been a slowdown in DTC retail that I think will probably continue to the latter half of this year. But you should try to right size your raise to the industry that you're dealing with and understand those different dynamics. Because if you are a energy startup, you are going to have very different conversations with VCs than if you are working in CRM or HR. The other question that we receive from founders all the time is how much of my company should I expect to sell in each of these rounds? So if you just focus on the white bubbles on the right there, that gives you the median percent sold by round. So the Series A is typically we see companies selling about 20% of the company to investors in a Series A round, Series B 18 to 19% and Series C and Series D much lower 13 and 11% respectively. But you can see from the orange bubbles that these distributions are very wide. There are Series A's where only 5% of the company is being sold and there are Series C that 30% of the company is being sold. So it's not as though there's one normative value that all of these dilutions are sort of converging upon. The other point that I'll make here is, again, one of the advantages of Carta data is that we can suss out a primary round versus a bridge round versus a convertible note, etc. So these are only primary rounds. So this is the first time you raise the Series A, the first time you raise the Series B, etc. The nice silver lining for founders is that this sort of dilution is basically in line where it's been for the last couple of years. It doesn't seem as though VCs are insisting on taking more of the company even in this downturn, although perhaps they're doing so a little bit more on the slide with some of those deal terms. One hypothesis that we kind of want to debunk a little bit here is that, oh, it might be a fundraising downturn, but surely the M&A market will sort of take back up as these valuations decline and there are some attractive startups that can be snapped up at low prices. We really haven't seen much of that. M&A has continued basically akin to where it was in 2022, so at a decent pace, but there hasn't been an explosion of M&A this year, which some people were expecting. Want to jump now to the earliest part of the market, and this is very separate from the dynamics that go on in these priced venture capital rounds. In pre-seed, it's sort of more of a wild west. So a lot of different investment to these earliest part of the company lifecycle is happening on safes and convertible notes. The safe has sort of come to dominate the earliest part of investing for angel rounds or friends and family. I will say that the safe is quite prominent in specific industries, but if you're working in places like medical devices, hardware, biotech, you should still expect to be raising on convertible notes and not safes. Those are perhaps more conservative industries, a little bit more capital intensive, and they're probably going to have a preference in many of those cases for convertible notes. Safes have two main criteria in order to be investable in most cases. One is a valuation cap. The second is a discount. About 96% of all the safes on Carta had a valuation cap this year when they were signed, so that is a very important term that founders should familiarize themselves with. And then quite a few had discounts as well. In all of these terms, what they do is they set the rules of the road so that early investors get a little bit more upside in that investment than later investors do. But the whole point of using a safe or a convertible note is that you don't have to decide upfront on the exact valuation of a company, which, you know, if you're a six-month-old company, can be very difficult to assign at that point. So the valuation cap is used in place of that post-money valuation in many cases, and it's very highly dependent on how much you're raising, how much your valuation cap is going to go for. So we see pre-seed startups raising on a $3 million valuation cap. We see pre-seed startups raising on a $30 million valuation cap. It's all over the place. So my suggestion for founders here is take a really deep look at how much cash you actually need and then assign your valuation cap based on the amount of capital that you think you have to raise to hit specific milestones. There's really no good reason to raise at a much higher valuation cap that you need to. Your investors will be kind of not as happy with you if you're unable to raise at that level for the seed stage later on. All right, so we've ripped through a ton of data here. I want to wrap up with a few open questions that we're not sure what's going to happen at the rest of the year, but they'll have deep impacts on the startup ecosystem one way or the other. So the first one, the home of venture capital in the U.S. for the longest period of time since the VC industry began has been the Bay Area, SF, San Jose, Santa Clara. What we're seeing right now is that at least across Carta companies, more investment is going to different sorts of VC hubs. The Bay Area is still the number one place for startups, and I expect that to continue for the foreseeable future. We do see really strong growth in different ecosystems. In particular, we highlighted Boston on this chart. There's actually been more venture investment into Boston companies this year than there has been into New York companies on Carta. That's the first time that's ever happened, led by some really strong industries in Boston, particularly biotech and life sciences. But you can see that other places across the country, Los Angeles, Seattle, Washington, Chicago, they're sort of slowly growing their percentage of the venture pie. We think this is great. We think that startups should be able to be started anywhere, not just the Bay. But it'll be interesting to see that once we get back to full health, quote-unquote, within the venture market, does that mean that we're in a more distributed place than we used to be? If you take that distribution and you kind of remove a little bit of abstraction there and just look at census regions, Midwest, South, Northeast, you can see a very clear pattern that the West is declining a little bit in terms of its whole position, and the South is growing. And the biggest beneficiaries of that growth in the South have been places like Austin, the rest of Texas, Dallas, and Houston, in particular, Raleigh, North Carolina, all over the place. But really, the South has grown its share of venture capital that is now almost, it's getting a little bit closer to the share of population because it was pretty underweight versus on a per capita basis for quite a while. The second open question, how will AI investing impact the venture market? So all of the data on this slide just comes from seed stage investments into AI and other companies. You can focus on those orange bars. That's the AI investment. It is skyrocketing. So you've got a 23% growth from Q4 to Q1 of this year and a 63% growth in Q1 to Q2. So AI companies are definitely garnering more time, more attention, more enthusiasm from venture capitalists than non-AI companies. And if you focus on the right side of the chart, you see that AI is getting higher valuations and they're raising more cash per round. So it is a good time to be raising as an AI company. We'll see how long that lasts. We have seen perhaps a little tiny bit of pullback of VC saying, I'm not sure where the moats are in AI. A lot of different questions there. But for right now, AI is garnering a ton of attention. And the last open question is one that has been in the news quite a bit lately about secondary markets. So these are ways in which employees or early investors try to sell their shares before an IPO. This was a hot, hot topic in 2021, but it's really cooled off lately. You can see that the total capital that's been trading hands on these marketplaces peaked at about over $10 billion, according to what Carta knows, in Q4 of 21, down to about just over $2 billion so far this year. What's happening here is that buyers and sellers are still very far apart. Early employees, early investors don't want to sell their shares at the really reduced prices that secondary market investors would like to buy them. So those two parties are not talking to each other as much as they used to. They're unable to come to as many deals. And so we see this slowdown in the secondary market. We really do expect this to pick up in the second half of the year as more positions get traded and there's a little bit more of a sense of balance across the valuation ecosystem, and stability that people can start to trust. Peter, thank you so much. Wow, so much data to try to digest here in less than 30 minutes, but I just have a couple questions for you because here we are. It's the beginning of October, the beginning of Q4 for a lot of companies. I noticed a couple of your slides had some incomplete Q3 data. But anything jump out at you that your early Q3 insights are saying the green shoots are starting to grow a little bit or still cautious? I would still be cautious, although I do think that I can pretty definitively say Q1 is going to be the worst quarter this year. Valuations on a pre-money basis are continuing to just bump up quarter after quarter. So Q3 will come in a little higher than Q2. It's really about total fundraising. So we saw a bump up in Q2 pretty significantly from Q1. Q3, of course, includes a lot of summer months, which VC is a seasonal business. Not a lot of investing happening if you're at Lake Cobo. But there is, I think, a pretty strong tailwind to Q4. So I'd expect things to just sort of bump up. Maybe there's a little bit of peaks and valleys. But my expectation is Q1 was the worst of it. And we've had the IPO market finally open up just a little bit in the last 30 days. Do you typically see any correlation to pre-IPO valuations, especially the later stage Series C, Series D, and beyond, when the IPO market starts to open up? I guess, do you think that's where we're going to see increase in valuation since they took such a big hit over the last two to four quarters? I do. So I think that the IPOs are sort of a necessary but not sufficient condition for health in the late stage. I think it was a little bit underrated how big a deal it was that no one was IPOing. Without IPOs, it's very difficult for a late stage private investor to assign a value to a company that makes any sort of sense because there's not that price discovery mechanism of the public markets. So it is really good that we're seeing some IPOs. I know that some of them popped and then kind of came back down on their second week or so. But even so, it's just good that companies are getting back out into publics. I do expect that late stage valuations will gradually rise. But the late stage founder is kind of at a really difficult place here because they raised at very high valuations in 2021. It's unlikely that they're going to be able to IPO at the valuation that was set two years ago. So it's a question of, okay, if we do take on a down round or if we revalue ourselves, how do we make employees whole? How do we project confidence into the market? It's a tricky set of circumstances. But this IPO wave, I'm really hopeful that it continues because that's how, that's one of the main criteria that we have to getting back to health through probably the rest of the year and then into 24. The other day, I'm going to look at your data after January 2024 because I want to see how the employee impact changes because a lot of times, you know, we're doing 2024 plans right now. January often is a lot of the involuntary terminations we're going to see, right? It is. Yes. And it's also the biggest month in terms of new hires. January is like where all the action is seemingly. So it'll be very, very interesting to see what happens on the employment front. We're hearing anecdotally from companies that through the last 12 months, obviously many of them have been forced to reduce headcount. And some of them have found that, you know, their businesses are operating quite well with fewer employees. So they're not as eager to perhaps replace that headcount as you might expect. So I would expect hiring to maybe turn around a little bit. But my gut is that founders and investors are going to be pretty cautious about adding new headcount unless there's like really clear paths to the value that that headcount will bring. I know we're totally out of time here, but I guess since I'm the host, I can make a little bit more time for this discussion. Great. ARR per FTE, everyone's talking about it. Is that data that you're actually able to track and share on your post, Peter? Unfortunately not. So we have some ARR data, but it is pretty coarse. So we only get it about once a year when a company undergoes a new 49A valuation. I know that there are other, you know, SaaS tracker, you know, Chart Mobile comes to mind and other people who have done some really interesting work on ARR per FTE. We can give really good information on the FTE side, which is, you know, just as another data point, net headcount on Carta, just the total number of current employees on Carta fell for five of the first six months of 2023. That's the first time it's happened for more than one month in a year in our history. So it's whatever you're hearing about layoffs and headcount reductions, like that pattern is still continuing, even if the tech press isn't perhaps writing about it as much because people maybe got a little bored. But headcount is like the first line item on many, many people's sheets as they head into the new year. My gut is, again, hiring is going to be a little bit reduced in that they're looking to improve that ARR per FTE number. Well, for those of you who'd never heard Peter Walker from Carta before, follow him on LinkedIn. His daily post, really, kind of one of the first things I look at every day. So Peter, thank you so much for speaking here at SaaSmetricspalooza. Appreciate it, Ray. Yeah, this is fun. Bye-bye now.