20VC Roundtable: Are IPOs Back? Is Growth Dead? What Does it Take to Raise a Growth Round Today? How Do VCs Solve The Liquidity Challenge? Will We See a Massive Resetting of Valuations? AI Hype Growth Rounds?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 11 October 2023
⏱️ 51 minutes
🧾️ Download transcript
Summary
Deven Parekh is a Managing Director at Insight Partners, one of the leading investing franchises of the last 25 years. Deven has made more than 90 investments since joining in 2000 including in the likes of Twitter, Alibaba, JD.com, Chargebee and Automattic (WordPress) to name a few.
Woody Marshall is a General Partner @ TCV, one of the most successful growth funds of the last decade with a portfolio including the likes of Facebook, AirBnB, Spotify, LinkedIn and many more incredible companies.
Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds focused on SaaS. In the past, Jason has led investments in Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few.
In Today's Episode We Discuss:
1. The Growth Landscape Overview:
- Is growth dead? Are any growth deals getting done?
- How has the price changed for growth deals that are getting done?
- Which type of growth companies will vs will not be able to raise?
- What happens to all of the growth companies with $300-$500M in cash but little revenue?
2. The Great Reset: Valuations Need to Change:
- Why should companies be actively resetting their valuations? What are the benefits?
- What will happen between VCs and LPs when there is no incentive for VCs to reset their portfolio valuations when they need to go out and raise from those same LPs?
- Structure is often part of these valuation resets, is structure to rounds always bad? When is it good? What type of structure is acceptable vs unacceptable?
3. Are the Public Markets Creeping Open:
- Should we take comfort from ARM, Instacart and Klaviyo and assume the public markets are going to open again? If not, what will cause them to open?
- How should we analyze the performance of the IPOs above? Many have been negative, are they right to suggest this is not the response we wanted?
- Why does Woody believe, like Instacart taking a 75% discount to their last round, we should have more and more companies go public at discounts to their last private round?
4. Late Stage Growth is Dead and Revenue Multiples:
- Why is late-stage growth dead? How long do we think this will last?
- How should we assess revenue multiples today? New normal? Same as always? How will revenue multiples look in 12 months from now?
- How should we analyse the large late stage growth rounds for hyped AI companies? What happens there?
Transcript
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| 0:00.0 | We went over a year without any tech IPO. We went about a year without any kind of meaningfully |
| 0:06.0 | large strategic M&A. Cisco just bought Splunk. You had three companies go public at real scale, |
| 0:11.2 | which are real business models. That to me is a glass half full. Growth is not dead. Challenge |
| 0:15.8 | is going to be, in my view. Crapy growth, high burn. Like if you about crappy growth, |
| 0:19.6 | high burn, like, don't need |
| 0:20.9 | to email. My word, I am so excited for this roundtable. Everyone says that growth is dead, |
| 0:26.2 | and so stay in this roundtable episode we unpack. Is growth really dead? Should we be optimistic |
| 0:31.5 | about the IPOs that we've seen? And what should we expect looking forward? Joining me is two of |
| 0:36.3 | the best growth investors in Devon Perak, Managing Directorate Insight, |
| 0:40.3 | and Woody Marshall General Partner at TCV. |
| 0:43.3 | As always, I'm joined by the one and only Jason Lankin at Saster. |
| 0:46.3 | A roundtable would not be the same without Jason, and the full video for this can be found on YouTube by searching for 20VC. |
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... |
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