Which produces better venture returns: consumer or enterprise investing?

Sam Lessin · Aug 11, 2023

SaaS is a particularly weird race he is not excited to play repeatedly, while many other industries are attractive if you take a systematic-building, profitability and option-value approach

The competitive dynamics Jason describes make SaaS unappealing; he's happy for Parker but doesn't want to replay that game

30:21 20VC Roundtable: NEW FORMAT: Why the Seed Investing Model is Broken, How to Make Money at Seed Moving Forward; Who Wins and Who Loses, Why Venture Value Add Platforms are BS and Failed and Why There Will be an IPO per Week in H2 2024

Jason Lemkin · Sep 20, 2023

Venture funding does not fully make sense in B2B, and generally does not work there

Scope: fragmentary statement

0:19 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

Harry Stebbings · Oct 27, 2023

Enterprise SaaS may no longer be investable, because inflated entry prices combined with public market revenue multiples that have rationalized make it impossible to generate the returns of the past

Entry valuations have expanded while the upside is anchored to lower public revenue multiples, and this applies especially to growth investing in enterprise SaaS

Scope: definitely true for growth-stage enterprise SaaS investing

20:50 20VC: The Three Types of Seed Round Today, Why Seed Has Never Been More Competitive, Why Pricing Has Never Been Higher, Why Boards at Pre-Seed Can Be Helpful & How Too Much Cash Too Soon Can Harm Companies with Ed Sim, Founder @ Boldstart

Harry Stebbings · Apr 10, 2024

Consumer investing is fun but enterprise is where the returns are

He was in several consumer breakouts that produced essentially no returns despite being good brands at the time

20:03 Enterprise investing produces better returns than fun but return poor consumer bets

Beezer Clarkson · Oct 18, 2023

Enterprise investing delivers more consistent exits at lower typical exit size, while consumer produces rarer but much larger spikes

Their published consumer/enterprise report showed this in the return data; Coinbase-style consumer spikes don't come ten at a time

5:49 Enterprise delivers consistent lower exits consumer delivers rare larger spikes

Jason Lemkin · Aug 11, 2023 · speculative

SaaS may no longer be a good place to invest; perhaps only B2C and fintech make sense because those are the only paths to a $500B company

Scale of the ultimate outcome is what justifies the investment, and SaaS comps cap out lower

29:59 Saas outcome ceilings are lower so only b2c and fintech reach 500b scale