20VC: Why Seed is Systemically Broken | Why Pricing is Worse Than Ever and There is More Funding Than Ever | Benchmarks for Churn, Retention and Growth Rates - Good vs Great | Why Last Vintage for Private Equity Will Suck with Jason Lemkin

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 27 May 2024

⏱️ 74 minutes

🔗️ Recording | iTunes | RSS

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Summary

Jason Lemkin is one of the OG SaaS investors with all of his first five investments turning into unicorns with Pipedrive, Algolia, Talkdesk, Salesloft and RevenueCat all in his portfolio. SaaStr is the largest global community in SaaS and he has taught a generation the fundamentals of SaaS on saastr.com.

In Today's Episode with Jason Lemkin We Discuss:

1. Growth Rates and Churn Rates: Average/Good/Great:

What is a growth rate that would excite Jason in a SaaS company? What is average?
What levels of churn would worry Jason to see? What would excite him to see?
What does Jason never tolerate when it comes to either growth rate or retention?

2. What Founder Combination Always Wins:

Why does Jason believe you cannot lose money on a CEO salesperson and a technical CTO founding partnership?
Why does Jason always meet the CTO for a second meeting in the diligence process? What questions does he ask? What do the best CTOs do or say?
Why does Jason always want to sell his shares when the founders want to sell?
Why does Jason believe that a company is never the same when the founders leave?

3. WTF is Happening in the World of VC:

Why does Jason believe that pricing is worse than it has ever been in venture?
Why does Jason believe that traditional seed VC is systemically broken?
Why are companies getting stuffed with more cash than ever before?
What does Jason know now about dilution that he wishes he had known when he started?
Why does Jason believe that you should always recycle everything?

4. WTF is Happening in PE and Later Stage Markets:

What happens to all the overpriced acquisitions like Zendesk and Salesloft where private equity way overpaid for them, they have no growth and no product innovation?
What happens to the generation of public companies like Box, Dropbox and Twilio, all with low growth and little product innovation in the single-digit market caps?
Why does Jason believe that Klaviyo is the most undervalued public company today?
What does Jason believe will happen to Anaplan with Pigment eating their lunch?

Transcript

Click on a timestamp to play from that location

0:00.0	Seed investing is systemically broken today. There's just as much capital chasing fewer and fewer
0:05.8	folks that can grow at triple digit rates. The best investments go one to 10 million and five quarters or
0:10.5	less, the very best ones. You can't IPO unless you triple triple double double. As you approach
0:16.2	10% market share in your core ICP, your core market, you got to expand. If the churn is anything more
0:22.2	than three or four percent a month, it's not even software anymore. This is 20 VC with me, Harry Stebbings,
0:27.4	and it's a new style of show today. We're calling it the review. The review is where we sit down
0:32.3	with an investor and we go through their three best and three worst deals, the financials on each and the
0:38.8	biggest lessons and takeaways that they took from each. And who better to kick it off than
0:43.4	Jason Lemkin? Jason is one of the OG SaaS investors with all of his first five investments
0:49.1	turning into unicorns, including the lights of pipe drive, algolia, torque desk,, Sales Loft and Revenue Cat, all in his portfolio.
0:57.0	Let me know what you think of this style of show and you can watch the full show on YouTube by searching for 20VC.
1:02.0	I always love to hear your feedback.
1:04.0	But before we dive into the show today, we're all trying to grow our businesses here.
1:08.0	So let's be real for a second.
1:10.0	We all know that your website
1:11.5	shouldn't be this static asset. It should be a dynamic part of your strategy that really drives
1:16.9	conversions. That's marketing 101. But here's a number for you. 54% of leaders say web updates
1:23.8	take too long. That's over half of you listening right now. And that's where Webflow
1:28.3	comes in. Their visual first platform allows you to build, launch and manage web experiences fast.
1:34.3	That means you can set ambitious marketing goals and your site can rise to the challenge.
1:39.3	Plus, Webflow allows your marketing team to scale without relying on engineering, freeing your dev
1:45.5	team to focus on more fulfilling work. Learn why teams like Dropbox, IDEO and Orange Theory, trust
	...

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