May 18, 2023 · 48m · saastr
VC AMA with SaaStr CEO Jason Lemkin and Black Mangroves MD Arnaud Bonzom at SaaStr APAC 2023
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At SaaStr APAC 2023, SaaStr CEO Jason Lemkin and Black Mangroves MD Arnaud Bonzom break down the venture capital market reset, explaining fund economics, valuation multiples, and the operational discipline founders need to scale globally.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Jason holds 74.1% of the talking time here. How this is scored →
Jason as informed peer 7.8 Guest teaching 3.0 Guest disagreement 1.3 Jason pushing back 1.3
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 24:42 Arnaud nuances Jason's claim that no VC wants profitability
Arnaud counters Jason's absolute statement that no VC on Earth wants profitability by pointing out that emerging market investors often act with PE mindsets requiring profitability.
Hardest push from Jason ▶ 22:38 Jason attacks internet advice regarding profitabilityJason forcefully rejects online conventional wisdom, asserting that VCs will never trade high growth for profitability without capital efficiency.
Biggest teaching moment ▶ 24:42 Arnaud educates on emerging market PE dynamicsArnaud reframes the discussion by explaining the regional variance in fund expectations, where lower-risk funds seek modest multiples on each deal rather than pure venture power-law returns.
Jason holds their own ▶ 29:31 Jason demonstrates VC exit modeling with Algolia case studyJason demonstrates deep institutional expertise by explaining how mathematical exit models prevent certain funds from participating in rounds despite loving the company.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Resetting Venture Capital Expectations and Market Valuations | 7 | 2 | 1 | 1 | Jason sets up the market macro picture, citing public SaaS valuation shifts from 2018 through 2022 to argue the current environment is a reset rather than a catastrophe. Arnaud agrees and adds local context about Singapore founders exercising discipline by keeping valuations reasonable. | |
| Re-invented Categories, Venture Growth Math, and Global Expansion | 8 | 3 | 1 | 1 | Jason explains the compounding growth math required for venture returns (reaching $100M+ ARR in 7–10 years) and shares examples from his early investments like TalkDesk. Arnaud contributes perspectives on Southeast Asian founders taking advantage of technical talent arbitrage between regions and expanding to the US. | |
| Valuation Multiples, Efficiency Requirements, and Market Thawing | 8 | 3 | 1 | 1 | Jason delivers an analysis of valuation multiples, explaining how growth rounds are constrained to roughly 15x ARR caps and outlining the requirement for founders to be twice as capital efficient. Arnaud adds references to benchmark reports and notes the current BVP Cloud Index multiple average. | |
| Capital Efficiency versus Profitability in Venture Capital | 8 | 4 | 3 | 2 | Jason strongly refutes the idea that VCs desire profitability over growth, emphasizing that capital efficiency is what matters. Arnaud offers a constructive reframe, pointing out that in emerging markets many funds operate with private equity mindsets where profitability is prioritized. | |
| Understanding VC Fund Economics and Founder Due Diligence | 8 | 4 | 1 | 1 | Arnaud outlines the power law distribution and portfolio economics of a $100M fund. Jason builds on this by detailing how fund exit models dictate investment behavior, recounting how Alven Capital passed on Algolia due to a smaller target exit model, and urges founders to diligence their VCs. | |
| Due Diligence Post-FTX, Metric Honesty, and Founder Integrity | 8 | 2 | 1 | 2 | In response to an audience question about post-FTX due diligence, Jason highlights how 2021 market mania caused investors to deliberately bypass diligence and forcefully warns founders against booking pseudo-metrics. Arnaud emphasizes stage differences and cites Warren Buffett on founder integrity. |
Statements from this episode (22)
Lemkin: VC is in a 2018-level market reset, not a downturn
“I don't think there's any downturn in venture. I think there's just a reset and folks that have not been raising capital or seen this side of things since, say, 2018 will think this is a terrible time.”
Bonzom: Many VC fund managers profit from management fees over carry
“A lot of them make their money out of management fees and not so much on carry.”
Bonzom: Repeat Singapore founders intentionally take smaller rounds at lower valuations
“I'm seeing now, like, people that are building their second or third company here, even if one of them got an exit with Google here in, in Singapore they're only raising one, 1.5 million at an eight to ten million valuation, where they can, even if today still…”
Lemkin: About 80% of Public SaaS Companies Are Reinvented Existing Categories
“What percent of public SaaS companies are new versions Of existing categories. New versions. It's about 80%, ok?”
Lemkin: VC returns require portfolio companies reaching $100M revenue in 7-10 years
“The bottom line is you really can't make money in venture other than fees unless you have companies that in seven to 10 years get to at least a hundred million in revenue.”
Lemkin: UiPath Took 10 Years to Reach $1 Million in Revenue
“Like UiPath took 10 years to get to its first million in revenue.”
Lemkin: Talkdesk Scaled from $1M to $15M Revenue in a Single Year
“My third investment was TalkDesk. It went from one to 15 in one year, right?”
Lemkin: Talkdesk Investment Reached a $1 Billion Position on Paper
“TalkDesk is worth, at least it was worth ten billion on paper. That was one of my best investments. My first investment with a billion dollar position. A billion dollar position as an investor.”
Bonzom: Startups Should Arbitrage European Engineering with US Go-to-Market Teams
“They do what I like, the arbitrage between, let's keep technical talent in Europe because there's great people, And less expensive than the US and maybe easier to retain. And let's get the market in the US. So let's move the CEO there. Let's have the marketing…”
Lemkin: Bay Area post-seed startups cap at 10x to 15x current revenue
“Basically, seed valuations in the Bay Area have not changed that much and after that, basically everything's getting done at, 10 X-ish if you're really good, 10 X current revenues, and here's the important point. If you're on fire, well this is what I've learn…”
Lemkin: Accel Growth made just one investment in 2022
“Accel Growth did one investment last year, 30 something the year before.”
Lemkin: 3x SaaS fund returns require 10x public revenue multiples
“Once the top public companies are trading at about 10 X on average, 10 X or above, that's normalcy for venture. And you can make a spreadsheet and you can talk about why and how ownership works out to distributions and, but it's pretty hard to build a three X …”
Lemkin: No VC wants slower growth in exchange for profitability
“What no VC wants on planet Earth Is slower growth and profitability. No VC wants that trade-off. Because going back to the earlier point, the game is to go from one to two million to a hundred million in seven to 10 years.”
Bonzom: Emerging market VCs favor profitability because they have PE mindsets
“In emerging markets, some VCs may care about you being profitable because they have way less risk adverse, and a lot of them have more a PE mindset than a VC mindset. So on a PE mindset, profitability matters a lot. On a VC, way less because you look at very d…”
Lemkin: Big US VC Funds Target Average Exits of $2B
“The average exit goal for a big U.S. Fund, even if they're the low, the local version, it's two billion.”
Lemkin: VCs Intentionally Skipped Diligence During 2021 Peak
“The pace of investing was fast, so fast and furious that people intentionally did not do the diligence, ok? It was an intentional choice”
Lemkin: Booking an Annual Contract Upfront in Monthly Metrics Is Fraud
“Founders including accelerating bookings into one number. Like I have a one-year deal, I have a, you know, a 120 K deal, it's 10 K a month, well I'll just book it as one 20 this month. That's fraud.”
Bonzom: Fabrice Grinda Signed First 100 Term Sheets Without Reading
“Fabrice Grinder, he often do a deal just by one hour call, or even shorter, and he commit, and he admitted that I think his first Android term sheet, he didn't read anything. He just signed.”
Lemkin: Every Founder Who Shorted My Advisory Shares Failed
“Three of them promised me X shares and gave me less. Ok, they said, I'll give you a 100,000 shares to help us, and I got the paperwork at 70. Ok, does it make, I'm not doing it for the money, but when I saw that, they all failed.”
Lemkin: Tech M&A surprisingly contracts during valuation downturns
“So M&A, like, you think M&A should pick up in, when things are calmer, but it does, it doesn't happen that way, right? Now, to some extent, there's a little bit of, like, you know, the Tomo Bravos and the Vistas, they have some insulation from this, but even t…”
Lemkin: Thoma Bravo's latest fund is still at negative IRR
“Tomo Bravo is incredible, but their last fund is, is, it's J curve S, but it's still negative IRR.”
Bonzom: Southeast Asia tech M&A will remain limited to cheap acqui-hires
“So you may have more, very opportunistic, and it looks like more a key hire for a very cheap price, so you may get those kind of acquisition in the next few months. But very large one is, no one is, With so much troubles to run the company these days, the publ…”