By playing, you agree to uListen's Terms and Privacy Policy and YouTube's Terms of Service.
The Twenty Minute VCJason Lemkin: Why Pricing is Worse Than Ever and There is More Funding Than Ever | E1157
Summaries, chapters, transcripts, and FAQs on this page are made by uListen, not YouTube.
At a glance
WHAT IT’S REALLY ABOUT
Jason Lemkin Dissects Broken Seed Investing, Dilution, and Founder Grit
- Jason Lemkin joins Harry Stebbings to deconstruct his best and worst SaaS investments, what actually drove returns, and why today’s seed market is structurally broken for most funds.
- He centers on founder quality—especially a hyper-committed CEO/CTO “binary pair”—alongside brutal standards on growth, churn, and product velocity as the non‑negotiables of venture‑scale outcomes.
- Lemkin argues that pricing and round dynamics are worse than ever: too much capital is flooding into too few truly fast‑growing companies, with insiders inflating valuations and obscuring weak fundamentals.
- He also lays out practical heuristics for evaluating CTOs, financial integrity, product quality, and SMB churn, while warning against holding too long after founders leave or doubling down reflexively on follow‑on rounds.
IDEAS WORTH REMEMBERING
5 ideasPrioritize ultra‑committed founder pairs over everything else.
Lemkin’s best outcomes all share a CEO/CTO (or equivalent) pair who are 110% committed, technically strong, and relentlessly product‑ and sales‑oriented; without that, even strong early metrics rarely compound into fund‑returners.
Do early, deep diligence on the CTO and the product.
He now insists on a second call with the CTO immediately, asking them to demo, show what delights and frustrates them, and expose feature gaps; world‑class CTOs are proud, hyper‑transparent, and visibly obsessed with shipping better, faster software.
Use strict growth and churn thresholds to screen for venture scale.
For SaaS to IPO, he still expects “triple, triple, double, double” growth; at ~$1M ARR, 8–10% monthly growth is the bar, enterprise NRR must be >110%, and SMB churn above ~3–4% per month means it’s effectively not recurring software.
Avoid overfunded, insider‑inflated and structurally bad follow‑ons.
Lemkin’s largest cash loss came from reflexively writing a third check based only on top‑line growth; he now treats follow‑ons like new investments—re‑underwriting finances, customers, and integrity rather than assuming momentum equals quality.
Sell when founders leave or strongly want to sell.
He’s concluded that when founders exit or push hard for a sale (as at SalesLoft or Pipedrive), investors should largely follow; professional CEOs rarely sustain founder‑level agility and intensity, and holding for “one more card” often destroys optionality.
WORDS WORTH SAVING
5 quotesSeed investing is systemically broken today. There's just as much capital, chasing fewer and fewer folks that can grow at triple-digit rates.
— Jason Lemkin
If the churn is anything more than three or four percent a month, it's not even software anymore.
— Jason Lemkin
The best investments go one to ten million in five quarters or less… You can't IPO unless you triple, triple, double, double.
— Jason Lemkin
When the founders leave, I'm pretty much out. I would like to sell when the founders leave. Always.
— Jason Lemkin
I don't think the best founders bullshit. You can build a unicorn bullshitting, but I don't think the best founders bullshit.
— Jason Lemkin
High quality AI-generated summary created from speaker-labeled transcript.
