The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: Are Burn Multiples BS in an AI World | Sam Altman Needs $1TRN of Energy | Klarna, Figma, Stubhub, all Down: Are Public Markets Turning? | FiveTran and DBT: Is the Wave of Consolidation About to Begin?
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Oct 2, 2025 
In this engaging discussion, seasoned SaaS investor Jason Lemkin and venture investor Ryo Driscoll delve into the significance of burn multiples in the AI landscape. They highlight how AI-native companies challenge traditional metrics of capital efficiency. The duo explores recent volatility in public markets, considering the implications for major players like Klarna and Figma. They also tackle the staggering $1 trillion energy demand projected for OpenAI and the potential consolidation in the software sector prompted by the FiveTran and dbt merger.
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Iconic Report On AI Companies' Burn Profiles
- Iconic's report showed AI-native sub-$100M ARR companies have far worse FCF margins but often better burn multiples due to explosive growth.
- Jason and Ryo used examples like Lovable to explain how high burn can still be capital-efficient if ARR scales rapidly.
Burn Multiples Are Useful But Flawed
- Burn multiple measures ARR added per dollar spent but embeds many assumptions about ARR quality, churn, and margins.
- It remains useful for comparing companies, but use it with cash, gross margin, and CapEx checks.
Take Good Rounds; Prioritize Cash
- If you can get a reasonable round, take it instead of optimizing price in a fast-changing AI market.
- Operate assuming cash is scarce and remain capital-efficient while you prove the business.