James Sinclair explains Q5, the late-December to early-January window when enterprises close deals fast. Public companies push steep discounts to clear budgets, and sales reps leverage year-end pressure to hit quotas. Founders should ask prospects directly for a year-end close and offer discounts or tap established advocates.
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If you're in the Enterprise SaaS game and you're a startup founder, you're seeing a lot of conversations about the deals that close kind of between Christmas and New Year's Eve. Read an article this morning that called it the first half of Q5, essentially, Q5 being the week after Christmas, before New Year, the last week of December, and the second half of Q5 being the first week in January. This kind of like del dead or dull period. There's a real. There's really two reasons why, why enterprises are pushing or do push their sales to the end of the year. And there's opportunities that exist. The first one is actually for big, big public companies whose year ends on December 31. They have trained their customers that if they wait till the end of the year, till the last minute, they can give their customers the steepest discount. Essentially, they would rather give a 60, 70% discount to close it in this financial year than sell it full price on January 2nd. It's all about financial performance, exceeding financial performance. And unfortunately, these massive companies have trained customers who now know if they wait until the last second, they have leverage and they can get the price that they want and they can get the discount. The second thing, and this is something Jason Lemkin wrote about, is for many sales reps who have built incredible relationships with the advocates inside of the organizations have been great partners, have delivered incredible value. This is their opportunity to call the favor. Hey, end of year, need to hit my quota, want to exceed my quota. This is big for me. Would you and can you. And they're essentially cashing in, hopefully on a chip that they have earned throughout the year. And this is important also because you find out the kind of great salespeople versus the not so great, because the not so great people are making excuses even before Christmas. Oh, you know, they're away, they want to push to the new year, they're very busy, Legal's not in town, Million reasons. Great salespeople are closing the deal because they've worked so hard to build an incredible relationship that when they make that, ask the person at the company says, you know what? I'm gonna try and make this happen for you. So if you're a startup founder and your customers and your prospects know you're a startup, maybe this is a great opportunity for you to phone the people you're talking to and say, look, we wanna raise money next year, we wanna do this next year. Our valuation is important to us and it's all gonna be based on kind of our revenue in 2022. Is there a way? Is there a price I can do? Is there a discount? Is there something I can do to get the sale to happen before the end of the year? And this might not make sense to your business. So this is a choice that you'll make, and maybe there's a price or a discount or something, and if you've built that relationship that they'll say, you know what? Yes, you know what? For that discount, I will do it. You've been a good partner. I trust you. I want to work with you. We're going to do business with you anyway. Let me see if I can make it happen. And maybe they can't. But the point is, this is the time to kind of reach out to these people and see if you can close one or two deals. Maybe you don't have to give a discount. Maybe you've been a great enough partner that you can just straight ask for it, but you can actually be honest, tell them why, and if you've got a good person on the other side, maybe they'll go to bat for you. Good luck.
