How to Determine Quality of Revenue

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If your gross margins are below 70, you're not really software. And if it costs you $5 to get a dollar worth of ARR, and it takes you four or five, six, seven years to make that money back, that's not a great business. We saw crazy things happen in Fintech where companies would come in with 50% margins because 20 to 30% of that would go to telephony. I mean, everyone carried into like 2018. Maybe we went insane on quality of revenue. It may be how long your rough weight's going to last but we're back to caring about quality Revenue.

Jason and Molly chat with Jason Lemkin of SaaStr (01:44). They discuss: advice for new VCs (16:14), the future of SaaS investing (27:37), playing offense as investors (35:50), secondaries and more.

(00:00) Jason and Molly tee up today’s interview show
(01:44) Jason and Molly speak with Jason Lemkin of SaaStr
(14:59) Notion - Get started for free at https://notion.com/thisweekinstartups
(16:14) Jason Lemkin’s advice for new fund managers
(26:16) Microacquire - Sell your business with no fees at https://try.microacquire.com/twist
(27:37) Will SaaS investments continue to be good?
(32:44) What makes Notion so good?
(34:44) AdQuick - Visit https://adquick.com/twist and mention TWIST to get $1000 off your first campaign.
(35:50) What does it mean to play offense? Why should you be playing offense now if you have the runway?
(39:35) Jason Lemkin’s predictions for the next year & advice for capital allocators/investors
(52:25) Are founder secondary sales a red flag?
(1:01:20) Strategies for investors in a down market

FOLLOW Jason Lemkin: https://twitter.com/jasonlk
FOLLOW Jason: https://linktr.ee/calacanis
FOLLOW Molly: https://twitter.com/mollywood