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Roundtable #4 with Jason Lemkin, Woody Marshall, Deven Parekh, Harry Stebbings | E1071

Every single 20VC episode is recorded with Riverside.FM. It is the one product that I could not live without. Try it today here (https://creators.riverside.fm/20VC) and use the code 20VC for 15% off. ----------------------------------------------- Deven Parekh is a Managing Director at Insight Partners, one of the leading investing franchises of the last 25 years. Deven has made more than 90 investments since joining in 2000 including in the likes of Twitter, Alibaba, JD.com, Chargebee and Automattic (WordPress) to name a few. Woody Marshall is a General Partner @ TCV, one of the most successful growth funds of the last decade with a portfolio including the likes of Facebook, AirBnB, Spotify, LinkedIn and many more incredible companies. Jason Lemkin is the Founder @ SaaStr one of the best-performing early-stage venture funds focused on SaaS. In the past, Jason has led investments in Algolia, Pipedrive, Salesloft, TalkDesk, and RevenueCat to name a few. ----------------------------------------------- Timestamps: (0:00) Intro (3:00) Is Growth Dead? (18:22) The Reset of Valuations (29:37) The Broken Nature of SaaS Investing (31:34) When will the IPO market rebound? (35:10) The Klaviyo IPO (46:12) Frothy AI Deals (48:35) Jason Needs Advice Valuating His Growth Investment (50:42) VCs Predict Klaviyo’s Stock Price --------------------------------------------- In Today’s Episode We Discuss: 1. The Growth Landscape Overview: Is growth dead? Are any growth deals getting done? How has the price changed for growth deals that are getting done? Which type of growth companies will vs will not be able to raise? What happens to all of the growth companies with $300-$500M in cash but little revenue? 2. The Great Reset: Valuations Need to Change: Why should companies be actively resetting their valuations? What are the benefits? What will happen between VCs and LPs when there is no incentive for VCs to reset their portfolio valuations when they need to go out and raise from those same LPs? Structure is often part of these valuation resets, is structure to rounds always bad? When is it good? What type of structure is acceptable vs unacceptable? 3. Are the Public Markets Creeping Open: Should we take comfort from ARM, Instacart and Klaviyo and assume the public markets are going to open again? If not, what will cause them to open? How should we analyze the performance of the IPOs above? Many have been negative, are they right to suggest this is not the response we wanted? Why does Woody believe, like Instacart taking a 75% discount to their last round, we should have more and more companies go public at discounts to their last private round? 4. Late Stage Growth is Dead and Revenue Multiples: Why is late-stage growth dead? How long do we think this will last? How should we assess revenue multiples today? New normal? Same as always? How will revenue multiples look in 12 months from now? How should we analyse the large late stage growth rounds for hyped AI companies? What happens there? --------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Jason Lemkin on Twitter: https://twitter.com/jasonlk Follow Deven Parekh on Twitter: https://twitter.com/djparekh Follow Woody Marshall on LinkedIn: https://www.linkedin.com/in/woodymarshall/ Follow 20VC on Instagram: https://www.instagram.com/20vc_reels Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ------------------------------------------- #VentureCapital #JasonLemkin, #WoodyMarshall, #DevenParekh #HarryStebbings

Deven ParekhguestHarry StebbingshostWoody MarshallguestJason Lemkinguest
Oct 10, 202354mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Top VCs Debate Growth, Valuations, IPOs, and the AI Hype Cycle

  1. Growth investing is far from dead: underlying company performance remains strong, but deal volume is down sharply as investors and founders work through a valuation reset from 2021 highs.
  2. The panel highlights deep misalignments around valuations, structured terms, and option prices, arguing that honest repricing and employee re‑incentivization are crucial for long‑term health.
  3. They see the IPO market as cautiously reopening with small, disciplined offerings where execution and profitability matter more than raw growth, and expect a more normalized environment by late 2024.
  4. On AI, they agree it’s a fundamental long‑term shift but view current late‑stage AI valuations as a hype-driven outlier, warranting caution rather than fear of missing out.

IDEAS WORTH REMEMBERING

5 ideas

Growth isn’t dead, but pace and pricing have normalized.

Underlying company growth remains strong, yet new deal volume is way down as both sides adjust from 2021’s unsustainable valuations to more realistic, slower-paced processes that re-emphasize relationship building and diligence.

Honest valuation resets and 409A repricing are healthy.

Resetting option prices and acknowledging lower valuations keeps teams motivated and avoids distorted, ‘all-in-on-black’ decision-making; clinging to peak valuations leads to bad choices and demotivation, especially for employees who lack downside protection.

Structured terms often create misalignment and should be used sparingly.

Preferences and guaranteed return structures can look attractive when things go well, but they misalign founders and investors around exit decisions and make mid-range strategic offers (e.g., good but not “2x conversion” outcomes) hard to accept.

Late-stage growth is the most “stuck” part of the market.

Companies close to IPO still anchor to old private valuations while public comps trade lower; this makes underwriting returns difficult and has frozen much of the pre-IPO growth segment, even as earlier-stage and PE-style deals still get done.

IPO markets are cautiously open for disciplined, profitable companies.

Recent IPOs (Instacart, Klaviyo, ARM) show that small-float, fundamentals-driven offerings can get out even in macro volatility; long-term valuation will be driven by execution, not first-day pops, and firms expect more activity by late 2024.

WORDS WORTH SAVING

5 quotes

This market is probably closer to reality than 2021 was.

— Deven Parekh

Structure never made a good company. Find a good company and pay the right price.

— Woody Marshall

Companies don’t run themselves. If you don’t have a motivated team, these companies are really not worth much.

— Deven Parekh

You can wake up and decide the glass is half empty or you can decide the glass is half full.

— Deven Parekh

The only thing that’s going to determine ultimate valuation is your performance.

— Woody Marshall

State of the growth equity and late-stage venture markets post-2021Valuation resets, 409A repricing, and alignment of employee incentivesUse and risks of structured terms and preference-heavy late-stage roundsPrivate vs public market multiples, Rule of 40, and path to profitabilityReopening of the IPO window and the impact of recent tech listingsRole of PE and sponsors in acquiring slower or misaligned SaaS assetsAI as a structural trend vs the frothy late-stage AI funding environment

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