The Twenty Minute VCZachary Bookman: Why Valuations and Fundraising are BS | E1235
At a glance
WHAT IT’S REALLY ABOUT
Zachary Bookman Exposes Venture Capital Myths, Vertical SaaS Truths, Timelines
- Zachary Bookman, founder and CEO of OpenGov, explains why venture valuations, fundraising headlines, and standard VC expectations are often disconnected from how enduring software businesses actually get built. He contrasts the slow, 15–20 year reality of company building with the power‑law, $10B‑outcome requirements of modern venture funds, arguing that most founders dramatically misunderstand investor incentives.
- He dives into the hard-won lessons from building OpenGov selling into government — a slow, unsexy but extremely sticky vertical — including pricing strategy, product suite expansion, M&A as innovation, and the centrality of high gross retention over flashy growth. Bookman also details his mistakes: overspending before product‑market fit, expanding TAM too early, raising too much money, and going remote‑first.
- The conversation culminates with the $1.8B sale of OpenGov to Cox Enterprises and an unusual deal structure that cashed out investors and employees while keeping Bookman heavily invested and operating for the long term. Interwoven through the business discussion are candid reflections on founder psychology, money, safety, work-life tradeoffs, and why he believes many VC returns and private markets are far weaker than the industry admits.
IDEAS WORTH REMEMBERING
5 ideasVenture funds really run on 15–20 year timelines, not 7–10.
Bookman argues that meaningful software outcomes typically take 15–20 years, which means LP capital is locked far longer than marketing decks suggest, and many VC portfolios are nowhere near distributing real cash despite paper markups.
Understand that your investor’s business is a power law – you may never ‘move the needle’.
Modern mega-funds need $10B+ outcomes; a $500M–$2B exit that can transform a founder’s life often doesn’t materially impact a large VC fund, so founders must stop assuming perfect alignment and optimize first for their company and common shareholders.
In enterprise SaaS, small ACVs and long human-driven sales motions are a broken model.
Selling $5–10K deals with expensive enterprise sales and deployment teams is structurally upside-down; you either need true PLG economics or you must drive ASPs dramatically higher, often through multi-product suites and deeper verticalization.
High gross retention is “the whole game” in enterprise SaaS, especially in govtech.
Bookman emphasizes that gross retention in the mid-to-high 90s turns revenue into near-annuity streams and underpins durable, compounding growth even if headline growth rates never hit flashy 70–100% levels.
Raising too much, too early, before real product-market fit is often fatal.
Easy early money led OpenGov to overspend on sales and marketing before the product and packaging were right; once he cut spend, narrowed ICP, and focused on suite expansion, growth actually improved — “cut more, grow faster.”
WORDS WORTH SAVING
5 quotesYour business runs on a power law. Your business is about finding the next Coinbase.
— Zachary Bookman (to Harry Stebbings about venture funds)
OpenGov's been quite successful, but it doesn't move the needle. It's a couple of billion dollar type exit. That's not what you're in the game for.
— Zachary Bookman
Real companies measure revenue, not logos.
— Marc Andreessen (as recounted by Zachary Bookman)
Spend less, grow faster. It's a weird law.
— Zachary Bookman
I grew up, I never felt safe. I never felt safe at home… There’s a sense of security that's come from some of this that I often will walk around and just try to tell myself, ‘You're okay. It's safe.’
— Zachary Bookman
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