Prediction Open · timeframe Jan 2029
Ball: Most 2021 mega-round startups will never reach their peak valuations
“I think there's the vast majority of companies who raise these mega rounds in 2021. Will probably never be worth at any point in time, right? The valuation that they were given in the public markets.”
Assertion Supported
Ball: ZIRP-era funding rounds lacked ratchets blocking down-round IPOs
“The reality of the moment we live in today is a lot of these zerf rounds, they didn't have ratchets. It was the opposite. They were very light on terms and they were very light on structure. So you don't have this Dynamic of super heavy ratchets, anti-dilution…”
Prediction Not checkable as stated
Ball: Down-round IPOs will become normal despite the current taboo
“I think kind of down rounds or down round IPOs will be the same thing. There'll be a taboo on them, but they'll be normal.”
Prediction Didn’t hold up
Ball: Regulatory opposition will block large-scale tech M&A in 2024
“From a regulation standpoint, it is really hard to see any large-scale M&A.”
Assertion Partly supported
Ball: Software venture funding fell 90% from peak to 2016-2017 levels
“Really, twenty-twenty-one and probably the first half of twenty-twenty-two, and now in twenty-twenty-three, we're down 90% from where we were at the peak, but we're really just back to the 2016, 20 17 trend line, right?”
Insight
Ball: True founder-friendliness requires investors to have hard conversations
“To be a truly founder friendly investor and board member. It is about having those hard conversations. It's not about shying away from conflict.”
Insight
Ball: Founders should raise smaller, milestone-based rounds to minimize cap table risk
“And like the way that we talk about it internally is don't make the cap table a risk to your business, right? Build a business the old fashioned way, raise smaller amounts of money, right? More frequently that are more milestone based. Where, when you raise a …”
Insight
Ball: Public-caliber SaaS companies must sustain 30% to 50% growth at $100M+ ARR
“And when I say public market type company, what does that mean? It's you are sustaining growth at a 102 hundred million plus of ARR, right? Sustaining, meaning you're growing, call it 30, 40, 50% plus. The universe of companies that can do that is Very small, …”
Disclosure
Ball: Overestimating growth durability was my biggest investing mistake
“The mistakes that I made right when I reflect back was that middle category, right? It was forecasting wrong. It was saying, Hey, I think I'm identifying a good market and a good business, but I had an expectation for growth durability. That just didn't happen…”
Insight
Ball: Public market scrutiny forces tech companies to build long-term endurance
“Like that will force companies to get fit. That will force companies to talk about their path to profitability. It will force companies to think about why are we an enduring business over the next 10 years? And while it may seem scary, it's actually like a goo…”
Insight
Ball: LPs should select core managers rather than attempting to time vintages
“And I would say picking vintages from the LP side is, is really hard. The, you know, the, in my opinion, right? Like the right approach is pick a manager and pick managers and manager selection right now is more important than ever and invest across those kind…”
Prediction Not checkable as stated
Ball: The 2024-2025 VC vintage sits at the valuation bottom
“I think the setup for this year for next year is that we're in the bottom half, or maybe the bottom third of the valuation reset, and in the first third of a massive technology shift that's going to create a ton of creative destruction.”
Insight
Ball: Software startups crammed five years of funding into 18 months
“If I had to summarize that 20, 21 period, it really was, we crammed five years of fundraising into an 18 month period.”
Insight
Ball: Complex VC exits take 12 to 18 months due to investor alignment
“This is why these processes end up taking 12, 18 months is because it's not 12, 18 months of negotiating with an acquirer or figuring out how to do a dividend back to the preferred, right? It takes 18 months because these are really hard decisions that are oft…”
Assertion Supported
Ball: Public software companies average 7x to 8x forward revenue multiples
“You know, on average, software companies trade around seven and a half times forward revenue, right? You can ignore that 20, 20, 21 period when interest rates went to zero. And so companies on average are going to exit at seven to eight times forward revenue, …”
Assertion Not checkable as stated
Ball: In 2021, startups were funded indiscriminately as future public companies
“In 20, 21, everyone was funded indiscriminately as you are going to be a public company. You're in a market that's big enough. You have a product that's differentiated enough to support a public market type company.”
Insight
Ball: SaaS startups stall at $50M ARR when failing to penetrate enterprise
“The market just wasn't that big, right? There were some early adopters, maybe in Silicon Valley, that were using your product But the reality is, is you never really broke into the enterprise, right? You never really broke into where the big dollars were, and …”
Insight
Ball: Transitioning from point solution to platform drives top SaaS success
“And you see some of the most successful public companies today, the crowd strikes of the world, the data dogs of the world, right? And it's exactly what you just said. It's moving from a point solution to a platform. Like that's really hard.”
Insight
Ball: Recycling proceeds from modest exits can rescue difficult fund vintages
“And so I think what you do have is a lot of investors who are thinking now, Hey, Is that a good thing? Should we be doing that? And I think that can be a way of finding returns for investors in funds that were more challenging vintages. But I think the wrong a…”
Prediction Held up
Ball: Major tech acquirers like Palo Alto Networks will buy few startups
“Palo Alto isn't going to go acquire 10 companies, right, in the next year. They might acquire a couple. Same with all these other, like, large acquirers.”
Insight
Ball: IPO markets are always open at market-clearing prices
“The IPO markets are always open, right? You can always go public. It's just a question of, do you want to accept the market clearing price at that point in time?”
Insight
Ball: Boring products that solve real problems build the biggest venture businesses
“Cool is the enemy of reality, right? There are a lot of products in venture companies that seem cool, but like at the end of the day, you need some, you need to solve a real tangible problem for someone. There's someone on the other end of the buying decision …”
Insight
Ball: An enterprise AI strategy is impossible without a data strategy
“You don't have an AI strategy without a data strategy, right? And a lot of the AI value prop today really comes down to do you have your data house in order?”
Assertion Supported
Ball: Bessemer invested in MindBody at $10M ARR on a $42M valuation
“This was 2010, and they were doing a deal at ten million of ARR at 42 pre”
Jamin Ball