The Enterprise Sales Cycle Your Startup Can't Survive
Enterprise deals take 6-18 months to close. Your runway is 18 months. Do the math before you pick your target market.
April 14, 2025 10 min read
A seed-stage founder told me last month that they'd landed a meeting with a Fortune 500 company's VP of Procurement. They were ecstatic. Their product was a perfect fit. The VP was enthusiastic. The timeline for a decision? Twelve to eighteen months.
Their runway was fourteen months.
This is the math that kills startups. Not bad products, not incompetent founders, not even market misreads. Just a fundamental mismatch between how long enterprise deals take and how long startups have to survive.
The Reality of Enterprise Sales Timelines
The average B2B software sales cycle in 2024 was 25% longer than it was five years ago. Enterprise deals targeting companies with 1,000+ employees now average 6-9 months for deals over $100,000. Complex enterprise agreements routinely extend beyond 12 months.
Stop planning and start building. We turn your idea into a production-ready product in 6-8 weeks.
Everything above, plus budget cycle alignment
Multiple stakeholder committees
Board-level approval for significant vendors
Integration with existing systems
Compliance and audit requirements
These aren't edge cases. They're standard operating procedure for companies that have procurement departments, vendor management policies, and risk committees.
The Stakeholder Multiplication Problem
Ten years ago, the average B2B purchase involved 5 stakeholders. Today, enterprise deals routinely involve 8-12 decision-makers across different departments.
Each stakeholder adds time:
End users need to evaluate the product
IT security needs to review data handling and compliance
Legal needs to negotiate contract terms
Procurement needs to fit you into vendor management processes
Finance needs to approve budget allocation
Executives need to sign off on strategic alignment
A single "no" from any of these stakeholders can kill your deal or restart the clock. A champion who leaves the company—which happens constantly—can set you back months.
The typical B2B buying group now includes 6-10 stakeholders from different departments. Each one has their own priorities, their own concerns, and their own timeline. Coordinating all of them is your sales team's job. Paying your sales team while they do it is your burn rate's problem.
The Burn Rate Math That Nobody Does
Seed-stage startups average $200,000 in monthly burn. Series A companies average around $1 million. Let's run the numbers.
Scenario: Seed-Stage Company Targeting Enterprise
Runway: 18 months (you raised $3.6M and burn $200K/month)
Sales cycle: 12 months (realistic for enterprise)
Time to first meeting: 2-3 months of prospecting
Close rate: 20% (optimistic for enterprise)
The math:
You start selling on day one
You land your first real enterprise prospect in month 3
That deal closes (maybe) in month 15
You've burned $3M waiting for your first enterprise dollar
You have 3 months of runway left
You need to close 4 more deals to reach next-round metrics
Each of those deals takes 12 months
You're dead.
Scenario: Series A Company Targeting Enterprise
Runway: 24 months (you raised $24M and burn $1M/month)
Sales cycle: 9 months (aggressive hiring of experienced enterprise reps)
Pipeline build time: 6 months to get real enterprise opportunities
Close rate: 25%
The math:
Month 1-6: Building pipeline, no closed revenue
Month 7-15: First deals closing, revenue starting
You've burned $15M before meaningful enterprise revenue
You have $9M left, giving you 9 months
You need to show significant growth to raise Series B
Enterprise customers churn slowly but renew slowly too
Survivable, but barely.
Why Enterprise Feels So Tempting
Founders target enterprise for understandable reasons:
Higher contract values. Enterprise deals range from $100K to multi-million dollars annually. One enterprise customer can equal hundreds of SMB customers.
Lower churn. Enterprise customers don't leave on a whim. Procurement processes work in both directions—once they've bought, they're invested.
Credibility signaling. A Fortune 500 logo on your website opens doors with investors and other enterprise buyers.
Less competition. Many startups can't serve enterprise needs, so the competitive field is smaller.
All of these are true. None of them matter if you're dead before the contract signs.
The SMB Alternative Most Founders Dismiss
SMB sales cycles run 1-3 months. Mid-market deals close in 3-6 months. These timelines are compatible with startup runway.
The objections to SMB are predictable:
"Lower contract values." True. You need more customers. But you can also iterate faster, learn faster, and build a sustainable business while you figure out how to move upmarket.
"Higher churn." Also true. SMB churn runs 3-5% monthly for many SaaS products. But acquiring new SMB customers is faster and cheaper than replacing an enterprise customer who decided not to renew after an 18-month process.
"Less prestige." Nobody cares. Investors care about revenue growth and unit economics. Customers care about whether your product solves their problem. Prestige is a vanity metric.
"Not a scalable business." Companies like Mailchimp, Basecamp, and Notion built billion-dollar businesses on SMB customers. The notion that SMB can't scale is a myth propagated by investors who prefer enterprise bets.
The "Land and Expand" Lie
Many founders think they've found a hack: land small deals quickly, then expand into enterprise contracts over time.
The theory: Start with a department-level deal at $20K annually, prove value, then expand to company-wide deployment at $500K.
The reality:
Department deals still require procurement, just simplified
Expansion requires re-selling to new stakeholders
IT security review happens at expansion, not initial sale
Budget for expansion competes with other priorities
Your champion may have moved to a different company
Land and expand works, but the expansion timeline is often longer than the initial sale. You're not shortcutting enterprise sales cycles—you're running two of them sequentially.
Regulated Industries Add 6-12 Months
Healthcare, financial services, and government contracts add compliance layers that extend timelines further.
Healthcare (HIPAA):
Business Associate Agreement negotiation: 2-3 months
Security assessment and penetration testing: 1-2 months
Compliance documentation review: 1-2 months
Financial Services:
SOC 2 Type II audit requirement: 12 months to obtain
Vendor risk assessment: 2-3 months
Regulatory approval for new vendors: 1-3 months
Government:
FedRAMP certification: 12-18 months minimum
Procurement cycles aligned to fiscal year
Contract award protests can add months
Some enterprise deals in regulated industries take over two years. If your startup targets these segments, your runway calculation isn't just wrong—it's delusional.
Building a Pipeline You Can't Afford to Fill
Enterprise sales require expensive resources:
Account Executives: $150-300K OTE for enterprise reps
Sales Engineers: $120-200K for technical pre-sales
Solution Architects: Custom demos and integration planning
Customer Success: White-glove onboarding and support
A minimal enterprise sales team costs $500K-1M annually. That's 3-5 months of runway for a seed-stage company, spent on people who won't generate revenue for 6-12 months.
The alternative—founder-led sales—trades money for time. You're personally running a 12-month sales cycle instead of building product, hiring, or fundraising. Every hour you spend on an enterprise deal that might not close is an hour you didn't spend on activities with faster feedback loops.
Enterprise customers have requirements that conflict with MVP principles:
Security compliance before purchase, not after
Integration requirements with existing systems
Feature expectations set by incumbent vendors
Support expectations that require dedicated resources
Building an enterprise-ready product takes longer and costs more than building an SMB product. The feature prioritization for enterprise includes items that SMB customers don't need and won't pay for.
This means you're not just facing a longer sales cycle—you're facing a longer development cycle before you can even enter the sales cycle. The math gets worse.
When Enterprise Actually Makes Sense
Some startups should target enterprise. The conditions are specific:
You have extended runway. If you've raised $20M+ and can sustain 24-36 months without revenue, enterprise timelines become manageable.
You have enterprise experience. Founders who've sold to enterprise before can compress cycles through relationships and pattern recognition.
Your product requires enterprise infrastructure. Some products—security tools, data platforms, infrastructure software—only make sense at enterprise scale.
You have a regulatory moat. If you've already obtained HIPAA, SOC 2, or FedRAMP certification, you've eliminated 6-12 months of competitor catch-up.
Your competition is weak in enterprise. If incumbents serve enterprise poorly and SMB alternatives don't exist, enterprise might be your only viable market.
If none of these conditions apply, you're probably making a mistake.
Your go-to-market strategy needs to answer one question: Can you reach profitability (or next-round metrics) before you run out of money?
For enterprise-focused startups, this means:
Map your sales cycle honestly. Talk to people who've sold to your target market. Not founders who've raised money talking about their vision—actual sellers who've closed deals.
Build pipeline before you need revenue. Enterprise pipeline takes 3-6 months to build. If you start prospecting when you need revenue, you're already dead.
Calculate deals needed, not revenue needed. If you need $1M ARR for Series A and enterprise deals average $100K, you need 10 deals. At a 25% close rate, you need 40 opportunities. How long does that take?
Include the losses. Not every deal closes. The ones that don't still consumed sales resources, executive time, and product development attention.
The Pivot Tax
Many startups start enterprise, fail, and pivot to SMB. This pivot is expensive:
Product changes for self-serve, lower-touch models
Pricing restructure for smaller contract values
Team changes as enterprise specialists leave
Positioning changes in marketing and sales materials
Time lost during transition
The pivot tax typically costs 6-12 months of runway and significant team disruption. Founders who knew from the start that enterprise was too slow could have built for SMB initially.
Enterprise sales typically require in-house teams. The relationship-building, institutional knowledge, and long-term commitment that enterprise customers expect doesn't transfer easily to outsourced sales organizations.
Development, however, can often be accelerated through strategic outsourcing. If you're determined to pursue enterprise, shortening your development cycle buys time for the sales cycle that's coming.
The trade-off is clear: build the enterprise-ready product faster so you can start the enterprise sales cycle earlier. Every month you save in development is a month you can add to your sales runway.
The Honest Conversation With Your Board
If you're already targeting enterprise and the math isn't working, you need to have a direct conversation with your investors:
Present the actual timeline. Not the optimistic version you used in fundraising—the realistic version based on what you've learned.
Show the burn rate implications. How much runway do you have? How many deals can close in that time?
Propose alternatives. Pivot to SMB, raise more money, or cut burn dramatically to extend runway.
Get alignment. Continuing to pursue enterprise while pretending the math works is how startups die in silence.
The Path Forward
The solution isn't to avoid enterprise entirely. It's to be honest about what enterprise requires and whether you can afford it.
If you're pre-seed or seed: Start with SMB or mid-market. Build revenue, learn your product, and move upmarket when you have the runway to support it.
If you're Series A: Consider a hybrid approach—SMB revenue to sustain the business while you build enterprise pipeline.
If you're later stage: Enterprise becomes viable when you have 24+ months of runway and can afford to wait for deals that take 12 months to close.
The founders who survive are the ones who match their ambition to their runway. Enterprise is a great business. It's just not a great business for startups that can't survive the sales cycle.
Building a startup and not sure if enterprise is right for you? Our team helps founders choose the right market strategy based on runway, resources, and realistic timelines—not wishful thinking.
A practical comparison of Cursor and Codeium (Windsurf) AI coding assistants for startup teams, with recommendations based on budget and IDE preferences.
