The Twenty Minute VCJason Lemkin: Predictions for 2024 - What Does a Trump Administration do for Startups? | E1099
CHAPTERS
- 0:00 – 1:13
2023 recap kicks off: “Not enough greed” and why 2024 feels different
Jason opens with a contrarian take on 2023: despite talk of deals returning, he didn’t see true “greed” in markets. He tees up a more anxious outlook for 2024, hinting that parts of the SaaS slowdown may be structural rather than cyclical.
- •Skepticism that 2023’s deal activity reflected real risk appetite
- •Set-up for a 2024 conversation framed by slower growth and tougher exits
- •Early hint that some deceleration in SaaS could be permanent
- 1:13 – 1:51
Who Jason Lemkin is and what SaaStr does (and why it matters for this conversation)
Jason explains his founder background (EchoSign → Adobe) and how SaaStr became a global community for SaaS/B2B founders. This establishes his vantage point: operator-turned-investor with a wide-angle view across thousands of founders and companies.
- •EchoSign exit to Adobe and lessons from selling “too early”
- •SaaStr as a community + platform for SaaS founders
- •Long-term involvement in investing and founder ecosystems
- 1:51 – 4:20
Best company of 2023: OpenAI’s revenue shockwave (and Midjourney’s capital efficiency)
OpenAI dominates the “best company” discussion because of its extraordinary ARR ramp and unprecedented structure (nonprofit/for-profit dynamics, tender offers, capped returns). Harry counters with Midjourney as an even more impressive example of scaling with minimal funding, sparking a broader discussion about when VC is (and isn’t) necessary.
- •OpenAI’s reported ARR growth and why it’s “generational” even with margin questions
- •The weirdness of OpenAI’s governance/structure and repeated tender dynamics
- •Midjourney as a case study in extreme capital efficiency
- •The paradox: VCs want to fund companies that don’t need VC
- 4:20 – 8:09
HubSpot’s long game: reinventing the product while compounding distribution
HubSpot is highlighted as an underappreciated compounding machine: from “blogging” roots to multiple clouds and a real CRM threat at the low end of Salesforce. Jason’s key lesson is the founders’ willingness to go long, invest through multi-year product expansions, and tolerate opportunity cost.
- •HubSpot’s evolution from content/blogging to broad GTM platform
- •CRM as a major second act (and why it took patience and time)
- •The founder mindset: committing to “build something big or that’s it”
- •Strategic patience: free CRM as a wedge despite resource trade-offs
- 8:09 – 11:31
When money breaks decision-making: downside-protection VCs vs “too rich” founder-VCs
They debate how incentives shape investing behavior: some career VCs become overly defensive, while ultra-wealthy founders entering VC can lose the economic motivation unless they operate at massive scale. Jason argues that “too rich” VCs must raise huge funds to make outcomes feel meaningful, changing behavior and fund dynamics.
- •Downside obsession can create toxic investor behavior, especially around exits
- •“Too rich” founders in venture may need massive AUM to stay motivated
- •Math of incentives: small funds don’t move the needle for already-wealthy partners
- •Why multi-billion-dollar funds face daunting return requirements (3x needs many decacorns)
- 11:31 – 15:11
Best founder of 2023: Jensen Huang—and why small founders “can’t tell the truth yet”
Jensen Huang (NVIDIA) gets the “founder of the year” nod for enduring, long-term execution and candid founder realism. Jason argues founders under ~$20–30M revenue are often still “selling” rather than reflecting—whereas seasoned operators can discuss mistakes, trade-offs, and real lessons.
- •Jensen as the emblem of “going long” through brutal competition
- •Why mistakes are the most valuable part of founder stories
- •The revenue threshold where founders become more candid and reflective
- •Debate over Coinbase/crypto leadership and Jason’s skepticism about “earn” programs
- 15:11 – 19:28
SaaS performance in 2023: stocks up, growth down, CAC pain—and the fight to reignite growth
Jason breaks down the core 2023 SaaS paradox: public SaaS stocks surged while growth hit lows. Efficiency (paused hiring, reduced spend) drove margins, but new-logo growth weakened and CAC rose—setting up 2024’s challenge: finding durable growth again, not just efficiency.
- •Public SaaS: strong stock performance despite historically weak growth
- •Efficiency playbook: hiring freezes > layoffs, spend cuts, base expansion
- •Growth coming from price increases/contract pressure vs new logos
- •CAC rising and why getting back to growth is the central 2024 problem
- •Skepticism that “adding AI bots” automatically restores real growth
- 19:28 – 22:51
Bill Gurley’s “window” thesis and Jason’s updated advice on when to sell
A Bill Gurley tweet reframes venture as a game of liquidity windows—periods when exits and high multiples are possible. Jason admits he’s given founders flawed advice by always pushing them to hold; now he believes taking strong offers during bullish windows can be rational because the next comparable window may be years away.
- •Venture returns often depend on rare liquidity/multiple expansion windows
- •Why “never sell” can backfire when market regimes shift
- •Founders who passed on 2020–2021 offers may face a decade-long rebuild
- •Actionable update: strong offers in bullish times can be worth taking
- 22:51 – 31:07
Early-stage winners: YC’s resurgence under Garry Tan + Kleiner’s comeback under Mamoon
Jason awards early-stage dominance to Y Combinator, crediting Garry Tan’s energy, founder empathy, and ability to rebuild momentum (and even SF’s startup density). They also spotlight Kleiner’s renewed strength, praising Mamoon Hamid’s discipline and “heat-seeking” approach to top-tier company building.
- •YC as the category leader and Garry Tan as a catalytic operator
- •Founder trust as a durable advantage (“has their back”)
- •Kleiner’s generational transition and renewed early-stage portfolio strength
- •Mamoon’s discipline: not lowering the bar, leaning into true 100x opportunities
- •The pressure in venture to ‘leave your lane’ vs the returns from staying in it
- 31:07 – 38:46
Late-stage reality check: few big outside rounds, decacorn math, and “no greed” in 2023
Jason struggles to name a ‘best late-stage fund’ because 2023 had few meaningful outside-led late-stage deals outside AI. With public comps depressed and 10x math hard above ~$200M valuations, late-stage investors often tire-kicked unless pricing was a clear bargain.
- •Outside-led late-stage deals were scarce outside AI exceptions
- •Why public comps and dilution make late-stage 10x outcomes harder
- •Inside-led rounds have different incentives (defensive ownership, signaling)
- •Jason’s central observation: greed didn’t really return in 2023
- 38:46 – 46:27
Reserves, pro-rata pullbacks, and the founder/VC behavior hangover from 2021
Jason’s biggest 2023 surprise: large funds refusing to support even strong companies with pro-rata in good rounds—often due to broken reserve models from the unicorn boom. The conversation expands into founder entitlement during boom times, VC enabling behavior (secondaries/overfunding), and the hard truth that misaligned incentives create “run for salary” companies.
- •Automatic pro-rata behavior paused—even for strong performers
- •Unicorn overproduction broke reserve models; investors hoarded capital for distressed bets
- •Founder guidance: continuously ask the board ‘Am I fundable?’ and ‘Would you fund me?’
- •Rounds often need a single internal catalyst investor to force momentum
- •Boom-era excess: founders and VCs both behaved badly; incentives drove outcomes
- •Secondaries/overfunding can weaken urgency and create zombie/run-for-salary dynamics
- 46:27 – 53:47
2024 outlook for SaaS: early-stage still vibrant, but late-stage becomes “permanent decacorn hunting”
Jason is unusually worried: after nearly two decades of SaaS outgrowing GDP, he sees signs of budget saturation and structurally slower growth. Still, he believes early-stage will remain vibrant due to endless “wedges,” while post-Series A venture increasingly behaves like a decacorn-only business model.
- •Concern that SaaS deceleration may be partly permanent (spend saturation)
- •AI may expand ‘software’ but budgets must come from outside IT lines
- •Seed remains resilient: new wedges/tools create 100x/1000x outcomes yearly
- •Late stage shifts from unicorn hunting to decacorn hunting as a default strategy
- 53:47 – 1:00:09
IPO predictions: “You might as well go public” (Stripe, Databricks, ServiceTitan)
Jason argues the third year of compressed multiples changes founder psychology: many late-stage leaders may stop waiting for a perfect market and IPO anyway. He highlights ServiceTitan as a prime candidate, is cautiously optimistic on Stripe, and is more hesitant on Databricks due to ongoing losses and the burden of public-market efficiency pressure.
- •Third-year multiple downturn makes waiting less rational for mature companies
- •Stripe: possible 2024 IPO as ‘nothing wrong but the multiple’ logic sets in
- •Databricks: wait longer if losses remain significant to avoid public scrutiny
- •ServiceTitan: standout vertical SaaS with scale, NRR strength, and IPO readiness
- •IPO timing realism: energy dampened by ‘good but not explosive’ recent IPOs
- 1:00:09 – 1:11:37
M&A, regulation, and politics: appetite is up, but deal shapes change (plus SF and funding dynamics)
Jason sees strong M&A appetite as companies exhaust efficiency levers and seek growth via acquisitions—especially bolt-ons in the $100M–$400M range. They discuss how regulation influences mega-deals (Figma/Adobe as a chilling example), how a Trump administration might shift M&A and tax policy, why SF’s rebound is tied to founder density (YC), and how LP capital availability will shape 2024 fundraising.
- •M&A rises as the ‘next card’ after efficiency and price hikes
- •Bolt-on acquisitions likely more feasible than direct-competitor mega-mergers
- •Regulatory uncertainty reshapes who can buy what at scale
- •Trump: potentially looser M&A stance, but unpredictable second-order tax/CA impacts
- •SF recovery framed as density + retention (YC cohorts staying)
- •VC funding: capital deploys when LPs supply it; LPs split into liquidity-stressed vs unconcerned groups, plus net-new global LPs
- 1:11:37 – 1:32:52
Quick-fire lessons + Jason’s 2024 SaaStr goals: only back outliers, avoid ‘meh’ urgency, build the marketplace
In quick-fire, Jason shares what he changed his mind on: ‘pretty good’ founders don’t generate venture-scale outcomes, urgency is non-negotiable, and he regrets not being a better “nudge” in winning deals. He closes with SaaStr goals: ramp investing pace and expand SaaStr’s marketplace monetization (events/media/community) while navigating marketing budget cycles.
- •New rule: invest only in founders ‘much better than me’—outliers matter
- •Repeat founders can fail without first-time-founder urgency; you must ‘smell’ it
- •Investment discipline: if you’re not sure quickly, say no and double down on winners
- •Self-critique: missing deals by not nudging/insisting when conviction is high
- •SaaStr targets: higher investing pace, stronger marketplace-style monetization, and sponsor mix shifts from unicorns to big tech
