Topline E33: Valuations, Investing, and Market Dynamics with SaaStr's Jason Lemkin
8 snips
Nov 27, 2023 
Jason Lemkin, Investor & Founder Chairman at SaaStr, discusses investing, valuations, and challenges in the SaaS industry. Topics include power laws in investing, challenges in SaaS companies, market dynamics, and board relationships for founders.
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Hunting AI Outliers Justifies Risk
- Investors chase AI outliers despite high valuations because potential returns justify the risk.
- Many SaaS startups still fail, but the aim is to find the rare, exceptional winners in frothy markets.
Concern Over Low SaaS Multiples
- Jason worries about sustained low public multiples (around 6x) constraining the SaaS ecosystem's stress levels.
- While bullish on SaaS revenue growth, he notes a long shift back to lower valuations hasn't been internalized widely yet.
Demand More From SaaS Teams
- To maintain performance, SaaS companies must demand more effort from employees despite less financial reward.
- The shift to efficiency means teams must work harder and smarter under tighter funding conditions.