Investor Deck is a six-article series presented by Sage, offering tips for SaaS startups from Canadian VCs. Read the previous installment here.
‘Cut costs. Conserve cash. Get lean.’
For the past two years, these mantras have echoed across boardrooms as investors urge startups to pull back on growth and double down on unit economics.
“I feel like there are a lot of entrepreneurs that are not as encouraged to think bigger, and that’s just not good long term for any ecosystem.”
Until recently, Maria Pacella, Managing Partner at Pender Ventures, was admittedly one of those voices. But in the last few months, she’s changed her tune.
“Startups need to stabilize financially, yes, but cutting costs can’t be the only focus,” Pacella said. “They have to think about focusing on that long-term growth opportunity. That’s what really counts at the end of the day.”
Vancouver-based Pender Ventures seeks out these opportunities daily. While the venture firm, which counts Swift Medical, Jane, Drugbank, and Copperleaf in its portfolio, does look for strong unit economics, it also prioritizes companies with strong potential for scale, impact, and long-term resilience.
This focus on resilience is especially crucial now, as Pacella has watched founders get pushed to their limits over the past five years. From the chaos of the pandemic to the tech boom, AI frenzy, and now a bear market, constant upheavals and changing investor sentiment have worn entrepreneurs down and left many more cautious than ever.
The result for most companies is a fear of risk and a default to playing it safe. But Pacella is pushing back against this reluctance to invest in new growth opportunities. In her view, the real danger isn’t in taking risks—it’s in avoiding them altogether.
“As a founder, you have to have a lot of endurance,” she said. “Right now, I feel like there are a lot of entrepreneurs that are not as encouraged to think bigger, and that’s just not good long term for any ecosystem.”
Eric Sleeth, Senior Product Marketing Manager at Sage, believes that many companies aren’t properly set up to assess risk and reward.
“The market is evolving rapidly, with shifting interest rates, back-to-back election cycles in the US and Canada, and the rise of AI,” Sleeth said. “SaaS startups are being forced to make decisions on risks and opportunities very quickly, but the processes that they have in place to do so are very poor.”
Pacella watched one SaaS startup in her portfolio stay overly focused on its existing clients, avoiding risks and opportunities in adjacent markets. But as competitors adapted, the company missed out on deals that could have been theirs. This reluctance to explore new avenues didn’t just slow that company’s growth—it resulted in meaningful revenue loss for the business.
“You can’t be bogged down by slow processes when the market demands quick decisions.”
Pacella advises her portfolio companies to explore diversification by turning to their greatest resource: their customers.
“One truism, regardless of the cycle you’re in, is if you have a maniacal focus on delighting the customer, you will do well,” she said. “And that doesn’t just mean having product-market fit.”
One of her portfolio companies misread a temporary spike in demand during the pandemic as market validation. The company funneled resources into sales and marketing, confident it had hit the mark, but as the pandemic-driven craze of 2021 faded, so did its customer retention.
Sleeth agrees that founders need systems to gather continuous customer feedback and ensure that teams like customer support and success have the data they need to truly understand their options and where to focus.
Leadership, however, often lacks access to this data, which affects planning around forecasting, spending, and growth.
“Too many business leaders are flying blind, trying to make real-time decisions with data that’s months behind,” he said. “They’re missing growth opportunities because outdated systems can’t keep up with the pace of the market.”
Sage for SaaS & Technology plan was designed to help startups track real-time performance metrics. The platform centralizes data, automates processes, and speeds up the return on investment. The goal is to implement a system seamlessly so leaders can focus on good decision-making.
“Startups need real-time data and agile systems to steer the ship right now,” Sleeth added. “You can’t be bogged down by slow processes when the market demands quick decisions.”
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Photo provided by Maria Pacella.