Pepper: Growth VCs Mistakenly Assumed Every Startup Could Become a Decacorn
Doug Pepper · Doug Pepper, GP at Iconiq + Jason Lemkin of SaaStr: "Where Venture Is Right Now" · May 6, 2022 · at 15:48
Doug Pepper, General Partner at ICONIQ Growth, reflects on the underwriting and valuation miscalculations made by growth investors during the 2020–2021 SaaS boom.
0:00 / 0:18exact quote · 18.7s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“The big mistake that the growth stage investors made over the last couple of years pivoting off of what you just said was not that we thought everything could be a unicorn. It's that we thought everything could be a Decacorn. I think that this environment is proving just how hard and just how rare it is to be a sustainable Decacorn.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Doug Pepper
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…”
Revenue Growth Overtook Efficiency as the Top Valuation Driver in Q2 2023
“What you can see through kind of most of 22 last year was that efficiency went to the top. That's how companies were valued. And of course, now look at the very last point on the far right. Q two, 20, 23, it's flipped again and on top revenue growth.”
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.”
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.”
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 …”
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…”