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The Twenty Minute VCJason Lemkin: Predictions for 2024 - What Does a Trump Administration do for Startups? | E1099
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At a glance
WHAT IT’S REALLY ABOUT
Jason Lemkin Dissects Venture Reality: SaaS Saturation, Decacorns, Trump, 2024
- Jason Lemkin and Harry Stebbings review 2023 in venture and SaaS, highlighting explosive AI growth (OpenAI, Midjourney), standout operators like HubSpot and Nvidia, and the broken dynamics of late-stage funding and reserve models.
- Lemkin argues that SaaS growth deceleration may be partially permanent as software spend nears saturation, while early-stage remains vibrant and venture increasingly becomes a permanent hunt for decacorns, not just unicorns.
- They explore the changed LP/VC environment, founder behavior during the 2021 bubble (secondaries, entitlement, ‘run-for-salary’ startups), and the shift in advice around when to sell or go public amid compressed multiples.
- Looking to 2024–25, they predict more IPOs out of necessity, a wave of mid-sized M&A, continued AI-driven concentration of capital, and a weeding out of mediocre VCs and “pretty good” founders who can’t deliver outlier outcomes.
IDEAS WORTH REMEMBERING
5 ideasSaaS growth has structurally slowed, even as efficiency and stock prices improved.
Public SaaS grew only ~16% in 2023 while stocks rose ~41%, largely driven by price increases and upsell into the base rather than new logo growth; Lemkin worries some demand deceleration may be permanent as software’s share of GDP saturates.
Venture is now a permanent decacorn-hunting business, not a unicorn-hunting one.
Post-2021, LP expectations and fund sizes mean Series A+ investors must underwrite Stripe/Databricks/OpenAI-scale outcomes; sub-multi-billion exits rarely move the needle for large funds, shifting risk appetite and selection criteria.
Reserve behavior has changed: many big funds are not reliably doing pro rata anymore.
Overvalued ‘middle-corn’ portfolios and broken reserve models have pushed multi‑billion funds to skip pro rata even in good companies, forcing founders to identify one catalytic insider who will actually lead and socially force others into a round.
Founder incentives in the 2021 bubble often became misaligned with stakeholders.
Large secondaries (e.g., nine‑figure cash-outs) and overfunded seeds created many ‘run-for-salary’ companies; Lemkin argues that when founders put themselves financially ahead of employees, customers, and investors, long‑term outcomes almost always suffer.
Advice on when to sell has flipped: windows of liquidity should be taken seriously.
Lemkin now regrets uniformly telling founders to “never sell if it’s working,” seeing many who declined peak 2020–21 offers and will never see those prices again; he aligns more with Bill Gurley’s view that venture returns concentrate in short liquidity windows that must be used.
WORDS WORTH SAVING
5 quotesThis is the first year I’m worried. The deceleration that we saw last year, I am worried some of it may be permanent.
— Jason Lemkin
We are permanently decacorn hunters now. I don’t think there are unicorn hunters anymore.
— Jason Lemkin
If you get a good offer and it’s in bullish times, take it, because it may be a decade until we see another boom like 2021.
— Jason Lemkin
If you don’t know in 20 minutes that this is one of the best founders you’ve ever met, don’t do the investment.
— Jason Lemkin
You’ve got to remember, it’s not your money. You gave it to them. It’s not your money to get back.
— Jason Lemkin (relaying an LP/VC perspective)
High quality AI-generated summary created from speaker-labeled transcript.
