Dec 2, 2022 · 44m · saastr
Accel, Iconiq & Salesforce Ventures: "Where Venture Is Right Now: Gritty & Much Harder" at G2 Reach
Alex Kayyal · 10m spoken Arun Matthew · 10m spoken Doug Pepper · 10m spoken Jason Lemkin · 8m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Hosted by SaaStr founder Jason Lemkin, leading venture capitalists from Accel, Iconiq Growth, and Salesforce Ventures analyze the macroeconomic reset facing the SaaS industry, examining valuation multiple contraction, operational benchmarking data, and shifting investment criteria. The panel provides actionable guidance on navigating slower growth, prioritizing capital efficiency, and realigning business metrics to build durable software companies.
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 22.6% of the talking time here. How this is scored →
Jason as informed peer 5.6 Guest teaching 3.8 Guest disagreement 2.0 Jason pushing back 3.1
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:03 Doug reframes the down round dilemma
Doug pushes back against Lemkin's claim that down rounds are non-existent deal killers, urging founders not to fear them and pointing to historical tech recoveries.
Hardest push from Jason ▶ 22:10 Lemkin challenges the reality of down roundsLemkin directly challenges venture conventions by arguing growth VCs do not reprice rounds downwards, but simply pass entirely on overvalued startups.
Biggest teaching moment ▶ 7:25 Doug breaks down attainment degradation benchmarksDoug reveals proprietary Iconic dataset metrics showing 2022 plan attainment dropping from 99% to 69%, fundamentally reframing the host's understanding of SaaS growth deterioration.
Jason holds their own ▶ 40:40 Lemkin details why sub-$10M startups must show market pullLemkin aggressively uses his operational knowledge to explain why sub-$10M ARR companies cannot hide behind macro downturn excuses and must demonstrate escape velocity.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Panel Introductions and Overview of Venture Portfolios | 4 | 1 | 1 | 1 | Lemkin sets up the panel by detailing each investor's firm and historic SaaS track record. The guests respond cordially with portfolio stats, setting a collaborative tone. | |
| Evaluating SaaS Health and Venture Investing From 1 to 10 | 4 | 3 | 2 | 2 | Lemkin prompts each panelist for a 1-to-10 rating on the SaaS industry and venture investing. Arun and Alex offer contrasting perspectives on market health, educating on public comp resets versus early-stage pipeline momentum. | |
| Benchmark Data on ARR Plan Attainment and Growth Degradation | 5 | 6 | 2 | 3 | Doug breaks down Iconic's empirical data showing median plan attainment plunging from 99% in Q1 to 69% in Q3, surprising Lemkin. Lemkin digs in to clarify whether the numbers represent raw growth rates or plan attainment. | |
| Balancing Slower Growth Rates With Profitability and Margin Leverage | 5 | 4 | 2 | 3 | Lemkin questions if top-decile outlier companies are also suffering growth degradation. Arun and Alex explain the shift from raw top-line growth to driving leverage and margin improvements. | |
| The 2021 Hangover, Multiple Contraction, and Decacorn Expectations | 6 | 5 | 2 | 4 | Lemkin asks whether market perceptions were warped by the 2021 bubble when evaluating strong performers like CrowdStrike and ZoomInfo. Doug and Arun detail multiple compression, pointing out that $10B outcome assumptions are no longer viable benchmarks. | |
| Navigating Down Rounds and Realigning Valuation Expectations | 6 | 4 | 3 | 4 | Lemkin asserts that down rounds rarely happen because VCs simply pass rather than repricing existing companies. Doug and Alex gently push back, arguing down rounds are manageable and founders must avoid anchoring on past peak valuations. | |
| Scarcity of Bootstrapped Gems and Project Prioritization | 6 | 4 | 2 | 4 | Lemkin probes whether bootstrapped gems like 1Password still exist without inflated valuation baggage. Arun explains that the 2021 capital influx reached almost every efficient company, necessitating ruthless project prioritization today. | |
| Fundable Profiles: Proven Economic ROI and Customer Retention | 6 | 4 | 2 | 3 | Lemkin asks about recent growth rounds that succeeded despite headwinds. The guests emphasize demonstrable economic ROI and strong gross and net retention, while Lemkin brings his EchoSign experience regarding multi-year enterprise contracts. | |
| Growth Expectations for Early-Stage Startups Under $10M ARR | 8 | 3 | 2 | 4 | Lemkin takes a hardline expert stance arguing that early-stage startups under $10M ARR deserve no slack for slowing down because market pull is mandatory. The panelists concur with the triple-triple-double-double math before delivering their 2023 macro outlook. |
Statements from this episode (24)
Jason Lemkin Has Invested Over $100M Personally in Startups
“I've also invested a hundred and something million of my own in venture backed startups.”
Arun Matthew: Accel Made One 2022 Growth Investment Versus 20 in 2021
“We've made one growth investment this year. And so one this year, wow, one this year, and that's down from about 20 from last year.”
Kayyal: Salesforce Grew Over 20% in 2009 Despite Global Financial Crisis
“Salesforce's growth in 2009 you know, in what was the doom and gloom era, as we can all remember of, you know, the world felt, you know, sort of financial markets were about to collapse and Salesforce still grew north of 20% in that period.”
Kayyal: SaaS Slowdown Is Valuation Reset, Not Fundamental Company Reset
“And I think more than anything, it's a valuation reset as opposed to a fundamental company reset.”
Kayyal: Top SaaS Companies Raised Extra Rounds, Leaving Them Out of Market
“The best SaaS companies over the last couple of years have probably raised one extra round that they needed. And so in our portfolio, the best companies just aren't really in the market.”
Doug Pepper: Median SaaS Plan Attainment Fell From 99% to 69%
“Q one, the medium was 99% hit their plan. I've never Q two, yeah, 87%, Q three, median, 69%.”
Doug Pepper: Median SaaS Growth Rate Fell From 83% to 48%
“The median growth rate was about 83% last year across a very wide range of companies that we track. This year, that's degrading all the way to 48%.”
Matthew: Under 30% of Accel Portfolio Expected to Hit 2022 Plans
“So I would say less than half of our companies are hitting original 20, 20, 22 plans. And I think by the end of the year, you know, it'll probably be closer to 25 to 30% that we're seeing across a very large sample size.”
Pepper: Only 5% to 10% of Iconiq Portfolio Beat Raised 2022 Targets
“Roughly my guess is less than 10, maybe five have raised their plan for this year and are beating that raise plan.”
Pepper: Growth VCs can no longer underwrite to $10B outcomes
“And I think it's going to fundamentally change how people think about entry points because no longer can you assume, you know, ten billion to generate a venture return in most cases.”
Matthew: CrowdStrike trades at 12x current ARR and 9.5x forward
“You look at what CrowdStrike is valued at, it's valued on current ARR at 12 times. And you look at a forward number that's nine and a half times.”
Pepper: Nearly 100% of 2021 Startups Cannot Raise at Prior Valuations
“I mean, I think if you're saying at the same price as that 20, 21 valuation, I think it's close to a hundred percent.”
Pepper: Most 2021-Funded Companies Should Eventually Grow into Valuations
“I think over time, given their large balance sheets, most of those companies should be able to grow into their valuation over time.”
Pepper: Down Rounds Are Not Fatal and Founders Should Accept Them
“Down round isn't the end of the world. Look at our public companies. They're all down and they're surviving and it's not ideal, but you can celebrate having raised a prior round at a really low cost to capital. And if you have to do a down round and move forwa…”
Matthew: 1Password bootstrapped 15 years before raising a $600M round
“Iconic and Excel invested in one password, which had been bootstrapped for 15 years before they ended up. Before they ended up raising capital, you know, they raised a six hundred million dollar round over the last couple of years.”
Kayyal: Salesforce listed a $6B TAM in its 2004 IPO filing
“When Salesforce went public in our S-one, our TAM listed was six billion in 2004. That was what we said the TAM was for Salesforce. You know, Jason called it out. It's now a thirty billion revenue company. You look at the TAM, you know, over three hundred bill…”
Kayyal: 15% to 20% of Enterprise IT Spend Is in Cloud
“If you take a step back, we're probably anywhere from 15 to 20% of IT spend is in the cloud.”
Matthew: Accel SMB-Focused SaaS Companies Struggle with Retention Versus Enterprise
“In terms of gross retention, we're seeing varying degrees of success of gross retention across different customer segments, meaning SMB in this environment is more challenged than enterprise.
And our companies that are exposed to SMB in particular are having a…”
Doug Pepper: Crypto Is an Unreal Bubble Unlike SaaS Which Will Survive
“I don't think that this is going away or that this is some inner, this is not crypto, which is going through an internet like bubble for 99 and 2000, because it's not real. These businesses are all absolutely fundamentally real and needed. There's just a bit o…”
Kayyal: Salesforce Ventures Prefers 70-80% Growth Over Low-Burn 20-30% Growth
“If a company had you know, a bit of a, sort of, was loss making, but was able to drive 70, 80% growth, then we could see a path to profitability. We would get more excited about that than a company that was growing kind of 20 or 30% you know, let's say it's su…”
Doug Pepper: ICONIQ Seeks Near-Tripling Growth for Sub-$10M ARR Startups
“Below 10, we're still looking for companies that are, they're maybe not tripling, but close. And the old saying is the reason that Neeraj came up with triple, triple, double, double is if you're not tripling at single digits, it's awfully hard to believe that …”
Arun Matthew: The Rule of 40 Applies Only to Public-Scale Businesses
“The rule of 40 is a measurement for public company scale businesses. And if you're at orders of magnitude below that at 10 to 15 in ARR, it's a different rule. You know, you'll never get to scale and have that sort of profitability margin at scale unless you'r…”
Pepper: Venture investing activity will be dramatically higher by late 2023
“I think the public, I think it's a great time to buy a lot of these names in the public markets. That's not investment advice, but given that, I think we're going to be in a much better place next year. And then in terms of our activity levels, I think dramati…”