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The Twenty Minute VCRoundtable #4 with Jason Lemkin, Woody Marshall, Deven Parekh, Harry Stebbings | E1071
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At a glance
WHAT IT’S REALLY ABOUT
Top VCs Debate Growth, Valuations, IPOs, and the AI Hype Cycle
- 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.
- 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.
- 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.
- 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 ideasGrowth 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 quotesThis 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
High quality AI-generated summary created from speaker-labeled transcript.
