Theory Ventures

“It's really much easier for someone who's maybe not be as sophisticated with SQL to suddenly start asking and answering questions of their data in ways that would have taken them three, six, 12 months to learn beforehand.”

“We record the conversation so we don't have to ask them to repeat, and we're starting to save all that information, produce LLMs on top that summarize diligence, and we produced our first investment memo summary from an LLM.”

“Six months ago, we were asking them, what is the number one prohibition, the thing that inhibits you from buying AI? Six months ago, the answer was security. Today it's ROI. People are struggling to find exactly the value that AI systems are building.”

“We've seen payback here has increased about 12% on average. This is basically linear. It's in line with the increase in sales cycles.”

“During the twenty-twenty era, most companies were burning five dollars for every new dollar of bookings. When the capital markets retrenched and the Fed raised rates, 550 basis points. Companies went from burning five dollars for every dollar, marginal dollar …”

“So the average respondents company increased quota, 14% year over year, which is higher than inflation.”

“In terms of what we've noticed, founders are more positive today than in 2022, despite the fact that sales cycles are about 12% longer.”

“There's actually a statistically significant difference in the underlying performance of these businesses as a function of their pricing model, irrespective of the layer in the stack.”

“And then the 70, the second standard, the first standard deviation now, which is that line on the right is actually a 40% increase. In sales qualified conversion. So that means the top third of all businesses actually saw a 40% increase in lead conversion.”

“AI today has no impact on conversion rate, has no impact on ARR growth, even though people who buy AI perceive it as a meaningful contributor to their overall efficiency gains.”

“If you're using a combination pricing model, in other words, seats plus usage, three X the growth in that dollar retention as somebody who's using any other form of pricing.”

“We have one company growing really fast. Engineering headcount year over year will be flat. Because they deploy some AI enabled ID and they can write a lot more software.”

“A little less than that. Closer to 700, but.”