What is a fair quota for my first rep when we have no history to go on?

The clearest arithmetic anywhere on rep economics: the rule of 10 for quota against base, four months to productivity, draws during ramp, and why teams attain about 70 percent of quota capacity so you must plan over capacity.

Simple Math to Set Up a Sales Team

From Craft Ventures by David Sacks 12 min read

• Rule of 10: an AE's quota is 10x base salary, and the standard SaaS commission rate is 10 percent of ARR.
• Pay a 50/50 base to variable split, then accelerate to 15 percent commission past quota.
• Plan for a 4 month ramp and about 70 percent average team attainment, so carry excess quota capacity.
• Set a manager's quota at 80 percent of their team's capacity; below 400K new ARR per AE, sales-led may not pencil.

Written for Indian SaaS founders by the Everstage CEO, ex Freshworks. It gives the working numbers: quota period must be at least the sales cycle, quota to OTE around 5 to 6x, and two thirds of reps landing between 80 and 100 percent attainment.

Getting the Quotas Right for Your SaaS Sales Teams

From SaaSBoomi by Siva Rajamani 10 min read

• Target a 5:1 quota to OTE ratio; below 4:1 something is wrong (600K quota against 120K OTE).
• Ramp time equals sales cycle length plus training time, assuming the rep gets enough MQLs.
• Never set a quota period shorter than the sales cycle, so no monthly quotas on a 90 day cycle.
• About two thirds of reps should land in the 80 to 100 percent attainment band, otherwise the quota is wrong.
• Only worth doing past 1M ARR with product-market fit, and needs 12 months of funnel history.

The numbers you want when arguing about a plan: median commission around 11.5 percent of ACV, AE pay mix near 53:47, quota to OTE median 4.2x, and a median SaaS win rate of 19 percent. Use it to check whether your plan is normal.

SaaS Sales Compensation Benchmarks: Trends and Best Practices

From Everstage 12 min read

• Median AE OTE is 190,000 dollars on a 53:47 base to variable split (Bridge Group 2024).
• Median commission at full quota is 11.5 percent of ACV, with most plans between 11 and 14 percent.
• Median quota-to-OTE ratio is 4.2x, typically 3.2x to 4.8x.
• Median SaaS win rate fell to 19 percent in 2024, down from 23 percent in 2022.

The headcount question answered as arithmetic: revenue target divided by revenue per rep and capacity utilisation, with ramp time and attrition built in. Use it before you sign off next quarter's hiring plan.

Sales Capacity Planning

From Everstage 12 min read

• Reps spend only about 30 percent of the week actually selling, the rest goes to admin and quoting.
• Capacity formula: revenue target divided by (revenue per rep times utilization), so 5M at 400K and 0.6 needs about 21 reps.
• Mid-market B2B SaaS reps carry 200K to 500K a year; enterprise reps 500K to 750K.
• Assume 60 percent capacity utilization and revisit the plan at least quarterly.

Two people who have set a first rep's number many times argue it out: how quota relates to OTE, what to guarantee during ramp, and when a miss is the plan's fault rather than the rep's. It gives you the judgement the multiplier rules leave out.

CRO Confidential: Sales Comp, Quotas & Recruiting with Jason Lemkin and Sam Blond of Founders Fund

On SaaStr by Jason Lemkin and Sam Blond 26 min