20VC: WTF is Going On in VC? Are VCs Still Investing? How Has What VCs Want in Investments Changed? Are LPs Investing in New Funds? Why VCs That Invest in Public Markets Are Losers? Dec 2023; Will It Be Better Or Worse with Jason Lemkin
In this conversation, Jason Lemkin, founder of SaaStr and seasoned SaaS investor, delves into the current state of venture capital. He discusses how VCs are shifting their focus in early-stage investments, prioritizing profitability and capital efficiency amidst economic turbulence. Jason critiques inflated growth-stage valuations and predicts the potential for down rounds. He emphasizes the importance of data-driven marketing strategies and the need for strong leadership in investment decisions. Tune in for insights on navigating the evolving landscape of startup funding!
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insights INSIGHT
VC Investment Landscape
VCs are actively looking to invest, but finding suitable companies is challenging.
Founders struggle to understand current VC priorities, and market conditions require a reset in expectations.
insights INSIGHT
The Postmates Effect
The "Postmates effect" suggested that even smaller players in a market could achieve significant valuations.
This effect, driven by a unique market environment, is no longer valid.
volunteer_activism ADVICE
SaaS Success Metrics
SaaS businesses must aim for $100-200M in revenue within 7-10 years to succeed.
Prioritize both top-decile growth and top-quartile capital efficiency.
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The question is: "are VCs still investing?". Today we are joined by Jason Lemkin; one of the OGs of SaaS of the last decade. As the Founder of SaaStr, he has inspired more SaaS founders than one can imagine building “The World’s Largest Community for Business Software.” Jason also invests out of the $100M SaaStr Fund and in the past Jason has led rounds into TalkDesk, Pipedrive, Algolia, Gorgias, Salesloft, and many more incredible companies. Prior to founding SaaStr, Jason was the Co-Founder of Echosign, an early e-signature business, funded by Emergence Capital and that was acquired by Adobe for $100M.
In Today's Episode on "Are VCs' Still Investing" We Discuss:
1. What Does it Take To Get Funded Today:
Early-Stage:
How has what VCs want in early-stage investments changed in this new environment?
Should startups prioritize growth? Profitability? Capital efficiency?
How long a runway is sufficient enough for founders to feel comfortable?
Why does Jason believe most founders are still deluded that they are fundable?
Growth Stage Companies:
Is the growth stage totally dead?
What will we see happen to all the companies that raised $50M+ at large valuations that have very little revenue?
Why does Jason believe that any operator who joined a $BN company in the past few years will not make any money on their equity? What should they do now?
Will we start to see down rounds and structured rounds at the growth stage? If so, when?
Public Markets:
Why does Jason believe this is a time unlike any he has seen before?
Are we in full recession now in Jason's mind? In Dec 2023, will this be better or worse?
Which are the most under-priced assets in the public markets today?
Why does Jason believe VCs investing in public markets are losers?
2. Micro Funds Will Be Decimated and LP Behaviour in 2023
Why does Jason believe that micro-funds in 2023 will be decimated and unable to raise new funds?
How will the majority of LPs approach new fund investments?
How will LPs approach re-investing in their existing managers? How has what they need to see changed?
3. Marketing and Sales: We Need To Change Budgets and Targets
How should CEOS be changing their marketing budgets in 2023?
What are the single biggest mistakes CEOs are making in this downturn with regard to their marketing budget?
How do sales targets need to be amended in the face of changing buying patterns?
How do the best sales and marketing leaders respond to these changing budgets and targets? How do the worst respond?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 