Jason Lemkin: Why Pricing is Worse Than Ever and There is More Funding Than Ever | E1157
147Jason 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.
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Timestamps:
(00:00) Intro
(01:27) The Science & Art of Successful Deals
(05:03) Lessons from the Best & Worst Deals
(15:54) The Qualities of Great CTOs
(19:28) Investing in Competitive Markets
(31:13) Founder-Led Companies & Product Expansion
(34:43) Investing Mistakes
(52:28) Acceptable Churn Rates for SMB & Enterprise Companies
(59:00) Assessing Burn Rates & Revenue Projections
(01:13:04) Quick-Fire Round
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In Todayβs 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?
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