# WTF is Going On in VC? Are VCs Still Investing? How Has What VCs Want in Investments Changed? Are LPs Investing in New Funds? Why VCs That Invest in Public Markets Are Losers? Dec 2023; Will It Be Better Or Worse with Jason Lemkin

20VC · Jan 13, 2023 · 49 min · 11,418 words
Speakers: Jason Lemkin, Harry Stebbings
Source: https://www.996.fm/episodes/20vc--ep-e2ecb593/

## Cold open

**Jason Lemkin** [0:00]:

There's a lot of advice, which is wait till the markets thaw. It's not that simple, man. They're not coming back. They're not bouncing back to 2021.

**Harry Stebbings** [0:07]:

They're not bouncing back to good times. So this episode came about as I was having many discussions with founders, and they really asked me a couple of questions. Are VC still investing? Should we delay our raise until later in the year or 2024? How should we amend our sales targets and our marketing plans in this new world? And I thought there'd be no one better to discuss these really hard questions than the always no BS SaaS OG and a long time friend in the form of Jason Lemkin. Now this is a phenomenal off the cuff discussion between two friends. We have no schedule. There is no intro. There's no how you got into the wonderful world adventure. I know you will love to hear that for the three thousandth time. And if you like this style of show, do let me know. I so love your feedback. You can do that on Twitter at Harry Stebbings. But before we dive into the show's

## Sponsor read

**Harry Stebbings** [0:51]:

day, the single most important element of any team is their ability to work together in the best and most efficient way. And Coda is the dog where teams can work on entire projects from start to finish with everything they need all in one place. Think about the way your team works today. If all the work is spread across different documents, spreadsheets, and a stack of workflow tools like they are in all of my teams, it's tougher to focus on getting things done, let alone getting them done together. And that's why I realized that I had to have Coda and why you need Coda. Coda is the doc that brings it all together by putting data in one centralized location regardless of format. With Coda, you'll never need to ask, where are the latest project updates? Anyone know where the performance stats are? This is what really slows teams down and prevents collaboration. With Coda, your team can operate on the same information and collaborate in one place and get projects done much, much faster. Take advantage of this special limited time offer just for startups. Sign up today at coda.io/20vc and get a $1,000 startup credit on your first statement. That's coda.io/20vc to sign up and get a startup credit of a thousand dollars. And speaking of tools we cannot live without, you probably know Brex. Brex was the first corporate card for startups, but Brex has grown a lot since then to scale up right along with its customers. Now 90% of Y Combinator trust Brex as their all in one financial stack. I get to speak to founders all day, and I know how important having the right financial stack is to their success. With Brex, you get fast access to high yield business accounts, high limit cards, and rewards like cash back and billboards to fuel your growth. Beyond that, Brex has the venture debt, financial modeling, and spend management solutions you need to run your startup globally and well. So are you ready to make your future CFO proud? Learn more at brex.com/20vc. That's brex.com/20vc. And finally, if Coda and Brex make your team work more efficiently, Intercom makes modern customer service software that really redefines how businesses support their customers, and their platform connects businesses directly to customers using powerful messaging and automation. Intercom enables teams to scale support without investing more resources, leading to happier customers and more efficient support teams. An intercom is used to send over 500,000,000 messages per month and enables interactions with over 600,000,000 monthly active end users trusted by customer service teams at more than 25,000 global organizations, including Atlassian, Amazon, and Lyft Business. Check out this amazing offer. Eligible startups get advanced intercom features at a 95% discount. So do not miss out. Head over to intercom.com/20vc to find out more. Three, two, one. You have now arrived at your destination.

## Conversation

**Harry Stebbings** [3:51]:

Jason, this is gonna be a very free form discussion, but I wanted to start with Yes. Something a lot, which is I'm in a lot of WhatsApps with GPs, and they're going, I want to invest. I want to invest, but there's no company. And then I'm going on Twitter, and the companies are saying, are any VCs investing? And I just want to understand how do you see where we're at today, especially when I see what I just said there.

**Jason Lemkin** [4:14]:

Well, look, I agree with you. I've been investing in venture since 2013. As we met fairly early in your career, I bolted out of the gates in 2013. Right? I did Pipedrive, TalkDesk, Algolia, Greenhouse, and Salesloft all within twelve months. I did almost no investing the last twelve months, and boy, the markets changed a lot twelve months, didn't they? The world changed. I do think it's harder to find good deals, and I think it is true, and I think people are a little bit full of it on the Twitter. There's probably a lot of it going on. We all have to reset. We all took so much risk for two years, and the markets were so strong that resetting to a day when we're looking for so much more out of an investment, the bar's gone up, and they are harder to find. I agree with you. I look at folks on Twitter. They're like, yeah. It's whatever. January something twenty twenty three. I've done 11 deals this year. I'm like, kudos. Because I have not seen 10 times the qualified deal flow of twelve or twenty four months ago.

**Harry Stebbings** [5:04]:

I haven't seen it in these times. Right? What has changed in what early stage investors are looking for in the companies that we back?

**Jason Lemkin** [5:11]:

I wrote this at sort of the peak of the meeting in 2021 when I was talking with someone to Sequoia, and they said they called it the Postmates effect. And what they decided is that and obviously, Sequoia is ahead of most of us, certainly me, is that they realized early on when things exploded post pandemic that at this point now, number three or number four of the market could be worth billions. Postmates, like, I used it. But in The US, I think it was number three or number four, it still sold for almost $3,000,000,000. Ever since I was a founder in my first job and then an investor, you had to be number one. Right? And back in the days when I was competing DocuSign, I almost wanted to jump off the roof if we couldn't be number one in categories. Being number two wasn't good enough. Oh, my God. But then we realized there was room for 10 vendors in every category. Payroll, sales automation, expense management. Some of these products are hard to tell the difference. And you don't have to sweat it because when Brex and Ramp and Expensify and Divvy, all of them are worth billions, not only did it change the size of outcomes, but it changed the way we invested. We didn't have to decide who was number one. And it was very stressful in the old days until 2018 to have to know if they were number one. You'd pass on so many deals. I don't think we're back to that today, but we're to pulling our hair out of realizing a billion dollar outcome's really hard. It's really frackin' hard. And we got so arrogant in 2021, so greedy, everyone with their unicorns. I don't think anyone brags about being a unicorn today, do they? Do founders brag about it? It's gone out the

**Harry Stebbings** [6:28]:

window as a term of bragification. I'm just looking at a lot of founders who are DMing me, and they're going, I don't get what you wanna see. Do you wanna see growth still? Do you wanna see profitability now? Do you wanna see improvement? What do you want to see at the early stage so I can focus my efforts? When you hear that, where do you go, ah, bad? The key

**Jason Lemkin** [6:48]:

to success in SaaS and B2B investing that I only do and you do a lot of, it actually hasn't changed that much. It's that somehow, in seven to ten years, you've gotta get to a 100 plus million in revenue. You just have to. Today, it probably has to be closer to 200,000,000,000 because that's when you can really IPO, approaching 200,000,000. So you've got a decade to get to 200,000,000. There are certain rates that you just have to grow. Whether and and Niraj from Battery simplified it all for triple to double. For me, in the old days, it's, can you go from one to five and five quarters or less? That will also set you up I guess that was a five x. But the math has to work in founders, and the only thing that's changed is the amount of capital you're allowed to spend. In the old days, the rough rule is we could raise including a, b, c, d, e, f, g, h, I, and j rounds, you could raise a 100 total. Then that kind of grew to 400,000,000 as the IPOs got bigger at the peak, and now we're probably back to a 100,000,000, which is everyone has to be capital efficient in a way we forgot how to beat. VC's unfortunately are looking for the trifecta. They're looking for top tier growth, but also some sort of top quartile capital efficiency. Even at a million in revenue, maybe not 10 k in MRR, but even at a million ARR, they're looking for this combination. And all the original investments I did, not everyone, not Benchmark or Sequoia, they all met that bar. They were all growing at top decile rates, but were pretty capital efficient. That's the market today, I think. And they're harder to find, especially with founders' burn rates and everything where we have not fully reset if we are going to reset to sort of the old day expectations, at least in SaaS.

**Harry Stebbings** [8:13]:

So I do wanna touch on that. I do just wanna finish on the Postmates effect because Yeah. I totally get you in terms of Postmates effect, but it's turned out not to be true. That was in a macro It was true for two years. It was true. There were many exits. There were many cash exits. True in a macro environment that was kind of artificially inflated by certain stimulus by bodies. And now it's not true. What happens in a world then when the Postmates effect isn't true?

**Jason Lemkin** [8:36]:

There's two ways of looking at it. Let's step back for a minute. You don't always have to directly compete with someone else in your category. You can own a segment of it. You can own the SMB segment or the mid market, or you can be focused on e commerce or a different vertical. So categories have more rooms for number one than sometimes VCs realize. And that has certainly happened as SaaS and cloud has expanded, especially with vertical SaaS. But it's true. As founders, you have to have conviction about why you will truly win. The competition slide finally matters again. Why will you win? I always knew it as a founder, and I think the best founders know it. We we need to know. And it certainly alarms me investing when I ask a founder, why will you beat the competition? And they don't know. Or my version of that question is I ask them, why did whomever stumble? Why did Postmates stumble? Why did whoever stumble? And the best founders always have a story, and they know why they're gonna win, and the almost great founders are like, I'm not sure. I'm not sure why. I think you have to be number one, but the good news for founders is there are more number ones in most categories than existed a few years back

**Harry Stebbings** [9:33]:

because SaaS is bigger. I do wanna ask you, when we look at and you look at portfolio companies today, when you look at the buying patterns, what are you seeing in terms of overall SaaS buying patterns today?

**Jason Lemkin** [9:43]:

Yeah. I have a very different perspective than Twitter. There is a a subset of categories that are doing fine. Let's be clear, they're doing fine. There is a subset that's deeply troubled, and it's a bunch in the middle where it's just a little bit or a lot harder, so be it. That's called life. But these folks who are saying this is the worst recession since the Tulip age in Holland are out of their minds. They have no life experiences, and it's not evenly distributed. And let's talk about a few examples for a minute, but before we even get there, think about folks maybe in your portfolio area that are selling to healthcare. In The US, there's no downturn in healthcare right now. There's nothing. And I can't imagine it's different in The UK. So, I'm sorry if you sell only to overfunded startups. You may think that this is the worst recession since 1811. But if you sell to healthcare, and then we'll just give some others, you don't see the issue. For example, in my portfolio, let's take a really interesting example, which is B2B e commerce. Now B2B e commerce, I have two leaders I've invested in. Gorgias, which is number one contact center in Shopify, and then Algolia, where about half of Algolia's business is in e commerce. And interestingly, you can see the future because ecommerce actually peaked early in 2020, and then it fell off a cliff, and it hit rock bottom in the beginning of twenty twenty one. It hit the beginning of twenty one, and then kind of rock bottom as 2022 came back, But ecommerce rebounded in the second half of twenty twenty two. Look at Shopify's numbers. Shopify at the end of twenty twenty two was not the rocket ship it was at peak COVID, but Shopify has stronger numbers at the end of twenty twenty two than it did at the start. And so when you look at folks like Gorgias, it grew faster in the second half of last year than in the beginning. If you look at Algolia, half its business is e com, half is SaaS. The SaaS folks have multiple impacts, pro and con, but the e commerce is up. Right? So there's lots of effects, and they're not even. You and I are both co investors in a company called RevenueCat. We're emailing on it. RevenueCat automate subscription management for mobile. It was a rocket ship. Then in COVID, it blew up. Then it kinda plateaued. And then it reaccelerated at the end of this past year. Reaccelerated 2022. It has its own issues, but there's not a lot of macro issues impacting it. So I'm not saying it's easy out there. It is hard. But go find the segment of your customer base that's winning. Go find healthcare or e commerce or mobile or some part of infrastructure. MongoDB, Okta, these companies are doing really well. Get some of that business. But I kinda quit on

**Harry Stebbings** [11:52]:

founders that say the world's ended. What do you say to the founders where, actually, they're doing really well and they're still getting a battering? When you look at quite a lot of the SaaS companies, they're down twenty, thirty By the multiple? Yeah.

**Jason Lemkin** [12:03]:

Well, I say, praise the Lord, you're private. You know what's not fun, Harry? And I've only experienced this once as a startup executive, but I've seen it in a few investments. It's not fun to be running a public company that's down 70% when your revenues are up. It's not fun. It's a morale crusher. You tell the team to ignore it. You tell the teams there will be ups and downs. I did a great interview with Spencer from Amplitude. He was, we prepared the team for this. We said there'd be ups and downs. I just didn't know they'd be this down. Because Amplitude's pretty much hit all of its numbers. It's a great one. At least in a private company, you can hide a bit, and it is a gift of being private. As long as there's no down round or a lot of drama, you can hide a little bit. And maybe that's not the question exactly you're asking, but it's a benefit of being private, is that you can duck out some of these issues if you don't need to raise capital.

**Harry Stebbings** [12:47]:

Yeah. We mentioned like the buying patterns. In terms of marketing spends, how are you seeing marketing spends impacted across the board? And are you concerned about that? I am running the media company that I do.

**Jason Lemkin** [12:57]:

I'm concerned about it. I have a limited visibility through my portfolio of 25 larger investments, but we have 200 sponsors for SaaStr. Right? And you have quite a few. This is one thing where Twitter hasn't okay? Which is that marketing has become myopic. Marketing is focused on this quarter. What can I spend to get more revenue this quarter? I'm under pressure from my board. My revenues are down in some cases, and my burn rate has to last longer. So the CEO is only approving these marketing expenses that create revenue immediately. And they do exist out there, but the problem is, it's such a small part of marketing that it pays off. The only part that really pays off is like, funnel assist. Like, taking someone that's almost ready to buy, and then they hear about someone on 20 VC, and that magic moment gets them to buy the next week. But nothing else and so we're cutting too much in marketing, and I'll tell you what I think we be doing. We're cutting too much, and it's gonna hurt everybody, not this week or even this quarter, but it's gonna hurt everyone. It's gonna not gonna have enough pipeline at the end of the year when I think things will be better. I think things will be better for startups at the end of this year, and I think we'll all be hurting for pipeline. And I think we're all making the mistake we made each of the last downturns. And Marc Benioff, in his book, wrote his biggest mistake in the last downturns was cutting sales. And what did he just do? Cut sales. He's making the same mistake three times. And if Marc can't help himself, I guess I can't blame any founders, but we're all gonna come out of this with not enough sales capacity and not enough pipeline. It's just gonna happen.

**Harry Stebbings** [14:16]:

So I'm a seed founder, seed slash series a. Yeah? Yeah. I'm being told by everyone, you gotta cut burn, you gotta extend runway, But I'm also hearing you saying your pipeline's gonna be short at the end of the year, and actually So what do I do, Jason? Well, the answer,

**Jason Lemkin** [14:31]:

it's actually pretty simple. It's going back to basics, which is be data driven. If you have a sales and marketing leader, give them a budget. It's just that simple. I have a million dollars to spend this year in marketing, and I have an incremental 500,000 in sales. You make the decision and spend that 1,000,000 the best you can. Cutting the marketing budget to zero, wrong answer. Let them optimize what they can do with a million and trust in your team. We can't solve everything. Most of us have to extend runway right now. We have to extend it. But I think we're over cutting in marketing by not empowering people to have budgets, and we're doing the same in sales. Just tell them, look, you have this much to spend this year, this quarter, this month, and then trusting your team to make the best hires. Layoffs don't really solve anything. They're little snacks. They make little incremental changes, but layoffs don't create growth on their own. Even if you did a layoff for 10 or 20%, you're still gonna have budget for this year. Hey, head of sales. You you get 20 hires. You get 20 hires, and you go decide who those 20 are gonna be. You've hit your number. Right? Same with marketing. And I don't see enough of this trusting the adults on your team with a number, and I don't see strong enough ops and finance support helping them do that, because we don't all know how to do that intuitively. We need some help from budgeting and planning to manage it. Many VPs need help.

**Harry Stebbings** [15:36]:

I think also with bonding, we've had a generation where budgeting and planning has not been a central focus because of the liquidity that we've had in the system. Yeah. There might have even been none in some

**Jason Lemkin** [15:45]:

cases. I'd never really worked with a VP of marketing before the first startup job I had. And I remember we went through a situation where we had to cut the budget. And everyone that was young on the team was kinda freaking out in our cool 50,000 square foot office in SF, but we had one person on the team over 35 or so at the time, and he walked in. He's like, okay. Understood. Tell me what my new budget is, and I'll start executing on it tomorrow. Just that was the answer. And I'm like, who is this who is this godlike character, the only seasoned executive on our team? But that was the right answer. Tell me what my new budget is, and I will get you as much leads, as many pipelines, as many opportunities as I can with my budget. Just tell me what it is, and I'll go execute. That's what you want from your sales and marketing team. The problem in marketing, Harry, is everything has crappy ROI. You wanna talk about marketing, here's the problem. This is why CAC is such a flawed metric. Let's say your average deal size is 5 k, a 5 k a year customer. You're actually not gonna have anything that where you can spend $5,000 to get a $5,000 customer. You're gonna have a lot of stuff that's viral, that's free, that's word-of-mouth, that's people telling their friend the marketing is close to zero. And then frankly, your average customer is gonna cost you like $10 to get $5. And if they stay five years, you're ahead. If they refer their friends your head. If you steal it from a customer, you're ahead. If you hit your plan and raise the round, you're ahead. But all of these marketing programs are too expensive, and so if you view them too simplistically, you just don't market. And that's what people are doing. They're just doing nothing, and it's going to fail them. Instead, should be doing the best they can with the budget they have.

**Harry Stebbings** [17:02]:

If we put on the hat of a sales leader or a founder, when we think of target setting, how do we do target setting in a market like this where there is such volatility and uncertainty?

**Jason Lemkin** [17:13]:

Yeah. And I think this is where there's a lot of burden on CEOs, and CEOs have to be the adults in the room, and they have to do it the right way. You gotta slow down. First of all, you have to look at your trailing velocity. You have to look at your last three to four months, average the growth rate, average the burn rate, and that's who you are. Whatever you've been growing or burning last week, even if you wanna be a different person, even if you don't like how you look, that's who you are, the average of your last three to four months. And that's your base plan. And then you have to calmly sit down and say, hey, if I don't like that, how do I do better? And be realistic about it. You can only inflect a curve so much. Let's say, last year, you were growing 200%, but for the last four months, you've only been growing 20%. That's your average growth rate. That's you today. If And you go to your sales team and say, we're gonna get back to a 100 by the end of the year, you may destroy the team. You have to take that trailing three to four months average and gradually scale it up to something that is sane, and you have to importantly do it with the burn rate. Think we've gotten better the last couple months, but people that don't do this on the burn rate are still gonna drive their cars right off the cliff this year. What are the big mistakes you're seeing there, Jason? The biggest mistake I've seen, which probably twofold, the number one is not enough sensitivities to models. This got people in trouble last year, but it's gonna hurt again this year, which is that if you miss your growth plan even by a smidge, it can dramatically increase your burn rate. People do not build sensitive enough models. If I've hired all this head count, and they don't hit the number, but I've incurred all the expenses for that head count, my burn rate often is materially higher than I think. So people don't build the right sensitivity analysis to when they underperform. Either you have to have a great model, or what you have to do is build a worser case model. Right? Where you miss the plan significantly, and you're stuck with a certain amount of expenses, and just understand what your burn rate is. That's the biggest problem I see. The second one is there is still delusion out there on the odds of raising a later round. There's still delusion across all of the markets. I still anger founders when they bring it up. I still get toxic comments, but you just have to assume, absent evidence, you're unfundable. Go get a term sheet or just go get someone you trust to tell you, hey, Harry, if you hit 10,000,000 growing these numbers, I will write you a term sheet. Go prove me wrong, but assume you are unfundable. I'm gonna write a small check into a great second time founder that had a multi billion dollar exit. And I was talking to him this week. I'm like, what's your plan? And he's like, he's gonna raise a pretty small amount of money in his first round. I'm like, I think you need more. I mean, you've built a huge enterprise before. He's like, I'll just go raise the a or the b later this year. I'm like, oh, my friend. You've been out of market. Raise it all now. Raise every

**Harry Stebbings** [19:38]:

dollar you can get now. Is that what you would say? Raise it all now, because this is the other question. But then a lot of people say, well, actually, you know, now is the worst time, because now everything's uncertain. It may be worse later, but it will probably be more certain, or maybe more certain. Now it feels like kind of pewd

**Jason Lemkin** [19:54]:

on thing. I think things are settling into certainty. I think they were uncertain at the end of last year. I think we've had crummy multiples in the public markets for three quarters now, and I think has reset what they wanna do in a world where, to simplify in SaaS, we're dealing with five x ARR world. But I think people do have a thesis now this year. I think they've settled on a thesis on they've adjusted that we're in a five x ARR world, and they've decided what's their worldview around that. Will it stay? Will it recover? Will it recover a little bit? Or will it get even worse? Different views out there. This morning, I got a first growth offer of 2023 on a portfolio company, and it was interesting. They were aggressive. I would say 90% of growth I don't know what you see. You have you might see more than me. I would say 90% of growth investors are mostly out of market. They're not actively investing, but some are. Some either want bargains, which I'm not sure exists, or they're making a bullish bet. And this one actually was an offer at fifteen x ARR, which was interesting. It said, this is what we will do for a top decile company. Okay. This was our thesis. For the best ones, not for any company. 15 x ARR, over a 100%, don't wanna take any risk. Right? Depending on the stage, 50 to a 100% growth, and profitable or close. That's the kick. Profitable. So they'll take the ARR risk, the 15 x. This is 50,000,000 and above. 50,000,000 ARR, this is their thesis. They'll even actually take a little bit less growth, but it's gotta be basically profitable. That's their thesis, which and there's logic in that, because they're saying there won't be another check probably. Do they have late press? Do they have protection on the downside? Because I think this is the other thing that people forget.

**Harry Stebbings** [21:17]:

It's a different issue. Actually, personally, I don't think any of that stuff matters. We could talk about it. I think it does for employees because they see the numbers of a $1,500,000,000 valuation. But if it sells for 500, your growth investors will still be made good because they only raised $2.50. But for you as employees, you'll be underwater.

**Jason Lemkin** [21:32]:

If you join a company with twenty twenty three with a valuation over 1,000,000,000 as an employee, you're gonna make nothing. It doesn't matter what it sells for. You're gonna make nothing. There are no $100,000,000,000 outcomes. You are probably not joining Microsoft or Adobe or whatever, and those took forever. There will be an occasional stigma, and that's why we invest. But what are the incredible ones? What are the HashiCorp's worth? What are the GitLab's worth? These are not worth 15 or $20,000,000,000. You will make nothing. So don't worry about your equity when you join a unicorn. Last year, joining a unicorn was a smart play. Today, if you care about equity, it's a sucker play. You're not gonna make anything. You're not gonna get any RSUs, and you're not gonna make anything.

**Harry Stebbings** [22:05]:

HashiCorp's five and GitLab's six now.

**Jason Lemkin** [22:08]:

Yeah. Those should be $20,000,000,000 companies, Harry. Should be $20,000,000,000 companies. Where's the injustice there? I don't understand. When you say they should be, what I don't know. I just I this is the problem of a seed investor. You have very passionate views about these companies, but how can HashiCorp be at over 500,000,000 in revenue growing what what the heck is it growing? Over 50%. How can it be worth less than 10 x? These are generational companies. GitLab and HashiCorp are generational companies. And the truth is, it's very hard for most employees to make money on anything that doesn't have a $10,000,000,000 plus outcome. It's very hard to get rich as an employee. One,

**Harry Stebbings** [22:40]:

do you ever think about dipping into public markets? You are an og of SaaS. You look at the essence in general. Why are you not just aggressively deploying into your HashiCorp and your GitLabs?

**Jason Lemkin** [22:49]:

Well, I think if you interview somebody think folks have, Iconics and others have done a lot of crossover investments into the best ones. For me, I have done a tiny bit, but I think it's a personally, I find it a distraction. We started this conversation, and we talked before we started about finding more gems, startups. Anything you do that takes you away from that kibbit scene in the public market, not worth it. Let's step back. As hard as things are, Harry, there a magic in a solo GP practice or maybe a two GP fund, which is venture is so hard, but good God, Harry, if you're a solo GP and you own 10% of GitLab today, you make a $100,000,000 yourself. I don't wanna screw around with a few shares of Okta or Hashi Corporate. These are companies I love. I don't even wanna screw around with a lot of shares of them. If there's any chance I can find another TalkDesk or Algolia or Pipedrive or Salesloft or if I can find a GitLab or Figma, like, you should drop everything. If you have a chance of investing in even one of these deals, you should drop everything and do it. The first time I ever worked with a VC, forget about anything in venture, this is what I learned. I was with my mentor, and he's here's this VC of a guy that was what's now IBP. When he finds one deal, he drops everything. We were visiting a public company that had IPO ed, it was worth 8,000,000,000, and he did one deal a quarter and dropped everything. That's the answer. And so when I see VCs on Twitter talking about how they're looking at buying some shares of Shopify, honestly, I think they're losers. Fucking go find the next Shopify. Venture's so hard to make money, but if you're privileged enough to be able to write a significant checkbook, you're not gonna make as much money as a CEO, but you can make a lot of money. But it's hard. You gotta find the next Shopify. But God, it's a gift, so go spend all of your time doing that. Stop screwing around on and to put it all into QQQ or VTI.

**Harry Stebbings** [24:26]:

We mentioned that pricing of some great assets like GitLab and HashiCorp. What about the three to 10,000,000 ARR companies last year who would have valued at a 100 x ARR? I've got one that was a thousand x ARR. Yes. What happens to those companies in this market? Do they just ride out their massive runway? Well, first of all, it

**Jason Lemkin** [24:45]:

really depends on the founders. I have two companies I've invested in that are doing okay, that have a decade of runway. That's the first time in my lifetime that could happen, where you could get so much capital that you could have a decade of runway and you could just fart around and do whatever you want.

**Harry Stebbings** [24:59]:

Do you mark them down to your LPs, one. And two, do you save some, you got a decade of runway. Give cash back.

**Jason Lemkin** [25:05]:

I've marked down only one, because if you're growing at a decent rate, I don't know that a markdown at the c level helps a lot if the company is growing. I think if the company is stale, it makes a lot of sense to mark it down. But I only have one portfolio company that's not really growing, and that one I did mark down, or maybe one and a half, I would say. I would say there's two. If you're not growing, think it makes sense to mark it down. If it's growing at a decent rate, if you're not Fidelity or a late stage investor, think it's a waste of your time to mark up or mark down because I asked all my LPs this question. They said if it's growing, they don't care. But I don't think that's the question you asked at the beginning, is what's gonna happen to these folks. Tried to summarize my thinking actually today in a tweet, which is in the old days. Before 10,000,000 in ARR, you could only raise $5.10, 12,000,000. And so you sold your company for a 100,000,000, which is still very hard to do. There are not that many $100,000,000 exits, even in the best of times. But everyone makes money. This is my old SaaStr rule. If you sell for 10 x or more than you raise, it's all pretty good. It gets worked out. You can work out the valuation. You can change this. Right? But when you raise massive amounts of money early, how are you gonna sell for 10 x what you raise? Who's gonna buy you for $500,000,000? You're dead. And I don't have an answer for these ones. I I think that they the best answer may be to combine with a competitor and build some sort of critical mass with your combined revenue and capital streams, but I think it's sad. I wish I I have a lot of answers, but exits are rare. They're really rare. And VCs don't talk this way, and Twitter doesn't talk this way. They're very, very rare. In all my startups, as a founder, I only had a handful of true M and A offers that were decent. Only a handful. Only a handful.

**Harry Stebbings** [26:34]:

It's what I found funny, though, with the last couple of years, just the amount of times you're like, I don't know if it's a $50,000,000,000 company, but it's definitely a $10,000,000,000. Yeah. Month of I'm like, definitely a 10. And you're like, 10 is fucking big. I do wanna get back to you. You said about, hey, if you join the company at over 1,000,000,000, you're not gonna make money. Question then, are we gonna see this great resignation away from those super overvalued companies and they're gonna start new companies and it's gonna be this glorious age of innovation with this talent? Or actually, are they gonna go, I might not make any money on my equity, but I'm paid okay. I haven't been laid off. Security's really important.

**Jason Lemkin** [27:09]:

I think that everyone that says that this is going to lead to a wave of new innovation, I think there's some truth to it. Don't get me wrong. Anyone that's been doing this more than five to seven years forgets is that the typical tech worker today is nothing like five to seven years ago. When I started in tech, you had to be crazy to do a startup. When I told my dad I was doing the startup the first time just joining one, they said go do it, but it's a terrible financial idea. And I went through the math and how it works. It's such a let's say, I'm taking a 50% salary cut. Everything goes right. Someday, after all these years, I might make a million dollars, but divide it by this many years. He said, this is a terrible idea. He said, but go do it. So first of you had to be insane. And then as things got a little bit bigger, I kinda had to be just kooky to do a startup. Not a founder, but just to join one. You had to be romantic. Had You to be one of these people that's like, just can't fit in at an Adobe or Microsoft or whatever. And then startups sucked so many human beings into it. Thousands of SDRs, thousands of AEs, thousands of of marketing managers and social media strategists that these became just highly paid ordinary jobs. And I don't think any of those people are gonna go off and start the next fiqhma. I think they're gonna continue to look for a job. They can kind of phone it in and make a lot of money. Tech went from a risky, terrible paying segment to best risk reward segment in the economy for three years, for three or four years. It was such a good deal. Come out of college, be handed a whole bunch of warm leads at the peak of their pandemic and make $200 in sales, this is an insane world. Publish three TikToks a week and make $1.40. I don't think we're going back to that. And I don't think those people are looking to start a Figma. What will happen with that dislocation is it

**Harry Stebbings** [28:38]:

remains to be seen. My worry is that, actually, I think there's this generation of kind of entitled, but also pretty crap team members. They're also terrible.

**Jason Lemkin** [28:46]:

This is a triggering topic, but the quality plummeted as we hired mainstream normal people. The quality plummeted. Any leader will tell you this quietly. Marc Benioff said it last week. Like, they'll tell you the quality went down the last three years.

**Harry Stebbings** [28:59]:

Way down. Do you meet the broader team? Because, like, actually, when you're investing in companies, you're investing in a company, not in a founder, to be clear. You are a shareholder of the company. So do you meet those head of marketing? I meet some head of marketing that sponsor the show, Jason. And I'm like, that was terrible. I would never have invested in your company if I'd known you were head of marketing. I don't

**Jason Lemkin** [29:18]:

meet with the whole team because usually there isn't much of a management team. I do for sure always spend a lot of time with the CTO. This is my cheat. I view the CEO as the proxy for sales and marketing. Get the CEO as great. With some help, maybe you and I can we're working on a search the other day. We can help you find a sales and marketing leader. But I don't really care who you have at a 100 k in ARR or 1,000,000. You are that person. But the CTO is the product usually. So that's, I think, the mistake 90% of VCs make is they haven't built product themselves. They don't even know how to talk to a CTO or a technical co founder. And I find them the funnest conversation. So that's as far as I usually go. But when I've invested at the edge of a, I certainly do, and I remember when I was starting investing, there was a founder I really I just liked him. I knew him. He was so charismatic, and they had pretty good traction. And I went, and it was great. I kinda wanted to do the deal. It was cheap. Always a good sign of adventure when it's cheap. Love a good deal. Love a good deal. And I went up, and I met with the VP of Sales. I'm like, how is it going? He's like, I'm quitting. He says, we're not gonna make it. I'm like, okay. This is a learning. Next, bring in the head of marketing. And the head of marketing is, yeah, I was like the office manager until recently. I don't know a lot about marketing. Okay. I did I said to the CEO before I left the office, I'm like, listen, I'm not your Hail Mary. So I do that, and I reflect a lot on this today, is you do have to be careful with the bullshit artist. So I don't know if you need to all the management, but you gotta talk to enough people, I think, to push through the artists. And I think the bullshit artists really benefited from the boom. They really did well from less scrutiny. It's not just Sam Bikcmann Frieder, however you pronounce his name. They're all over the place in SaaS and Cloud. And you gotta meet enough people to make sure that you're not investing in the bullshit artist.

**Harry Stebbings** [30:50]:

Can I ask, one trend that I'm seeing now is given how tough it is just bluntly? Yeah. The mature founders, the fathers, and the mothers, and the more mature minded of weathering it well. They know that if their child gets sick, it's gonna be much worse than a recession. But Yeah. The young founders, their volatility is very extreme. In the highs, they're selling secondaries and buying Gucci's, and in the lows, they're absolutely on the floor. And I'm really seeing the power of the mature founder and gravitating towards them. Are you as well? Let

**Jason Lemkin** [31:22]:

me answer the question. I think we have to be careful in tougher times what we take comfort in. It's like taking comfort in a low burn rate. Hooray. I call this a strategic retreat. If you do a brief strategic retreat as a startup, it's fine. Take a quarter. Get your house in order. Get rid of that terrible VP. Cut your burn rate. But if you stay in strategic retreat for a year, you never pull out of it. This is what I see happen too often over my decade of investing is, and this is what I worry about today. I worry about strategic retreats. If I see a founder that's young and very passionate and they're struggling, I can try to help them. But if they cross that line into full strategic retreat, I lack ideas. These seasoned folks, they know what to do that second. I remember going back in time in March 2020, when we had to cancel SaaStr annual the night before we lost $10,000,000. Okay? My team was all first timers. They were devastated, Harry. They worked for this on a year, and we lost $10,000,000 in one night. Were you devastated? Took me about fifteen minutes. I waited. I saw this happening. I saw the first ship come into San Francisco with COVID on it from this tour ship. And then I I fought it. I fought it. And then the moment came when the fight was over. Santa Clara County said there's no COVID here in the Bay Area, but we're shutting down larger events. And so I just called it that day, and the team was I'm like, okay. And it took me about eleven minutes, maybe five minutes to be your adult, because I'd seen this playbook before. It didn't even bother me all that much, because I had to go into fix it mode. But I don't know if that makes me a better person or better first time founders are so powerful. They're so powerful by the same time.

**Harry Stebbings** [32:40]:

They both have superpowers. It does make you better. It does make you better. Because I think for me, it's like the only thing that matters here, and Jason, why am I successful? It's not because I'm fucking smart. We both know I'm not. I'm just dogged and persistent. Persistent. Never stopped. I just kept going, like you there. When you had this shit of shit, you went, okay, let's carry on.

**Jason Lemkin** [32:57]:

That's why. Yeah. I think that's good. I just think, not to sound like fuddy duddies or to talk about the laziness that's gone into tech, I think that's true, but also I worry today that too many seasoned folks just quit too quickly now. They're waiting for that easy job. They quit. They're jumping. They're jumping. And startups are meant to be hard. They're meant to have these these hard periods. But, yes, new founders, young founders, the emotionality in the downturn can be. I'm not sure I'm compatible with it. Jason, we're both being fund managers. What happens to LP markets in this time? You mean with new managers or re ups or secondaries? What's do mean in the question? Those do first new managers and then re ups. Well, I can just tell you what I've learned with my LPs. And I'm a small a very small for my LPs, but I have a lot of good commonality. I have a lot because of Alex Bengish, I have a lot of overlap with Initialized, with Atomic. We have a lot of LP overlaps. So I think what I've learned is interesting. One, none of them want another manager. They don't. Okay? It's not that they won't take another manager in. They will. If you or I sent one of them an email and said, this is the best new fund on planet Earth, they will probably write a check. No one wants another manager. Simple answer. Two, they're pretty chill right now. The LPs that have been doing this for a while, I've heard versions of this from three or four top LPs, which is we still believe fundamentally this is the best asset class in our portfolio, and this is part and parcel of the asset class. Now, if this went on for five years, they might reassess whether timber or diamonds or ventures should be in the portfolio, but right now, people are pretty chill with it. And then the last insight, which I didn't totally get until my last LP meeting, was just a few weeks ago, a lot of LPs are judged on an annual basis. They're judged annually. And last year actually was great for a lot of LPs because I didn't get this. The the last big exit I had was Salesloft, which sold for 2,500,000,000 to Vista on 12/31/2021. But by the times the LPs got their distributions, especially from IPOs, they're deep into 2022. You may be scheduled. This is what I've heard. A lot of LPs may be worried about 2023 when they may have no distribution. But 2022, even if the stock market was down, cash in many cases was pretty good compared to model because of the lag, the cash collections lag.

**Harry Stebbings** [34:57]:

Okay. Could our saving grace for 2023 be the distributions from Figma? When you look at the amount of LPs across the different funds from Kleiner to Index and everyone in between, there's a lot of LPs in that. That's a lot of distributions.

**Jason Lemkin** [35:11]:

I think there's so much money in venture now, I would need someone smarter than me to throw together a spreadsheet to say, is it enough? So how much did Figma sell? Figma generated 10,000,000,000 of venture returns out of 20, let's say. Is that enough compared to the size of the funds in Figma? It might not be enough. Going back to the start of the conversation, venture's a hard business. If that 10,000,000,000 represent sort of 50,000,000,000 of funds in coverage, it's it's helpful,

**Harry Stebbings** [35:35]:

but it's not gonna rain. I think we'll see the death of many of the micro funds. The funds that raised from founders, public market founders who now have had their net worths crushed, and then GPs like me and you, who, bluntly, are probably writing less LP checks than we did before.

**Jason Lemkin** [35:47]:

Do you agree? I they're gonna be decimate. I think they already are decimated, they don't know it. I think the last two years were insane, and kudos to everyone that raised, every new manager with absolutely no track record, no exits. I'm sitting on likely a one x portfolio at best, was able to raise double digit million first time fund. Kudos to you because that never happened in venture before. When I raised SaaStr Fund one in 2016, we knew each other then. I still have some of the testimonies on one site. People thought it was insane. They're like, how could one person raise $60,000,000? That's so much money. By then, it was still early in my career, but I already was almost four x from real companies with significant ownership positions. I'm not like throwing a check into something. I hope that the new managers know that it's a gift, and I hope that they leverage that gift, because you can make so much money in venture if you invest extremely well, but investing at a mediocre level only gets you fees. You're new manager with a new fund, don't waste your shots. I think we all wasted a few shots the last couple of years. I know I wasted one or two. I wish I could get them back. I didn't waste 20, but times were so good I wasted shots. Maybe don't waste a shot if you're a new manager. Just assume this fund's your last one, but one Figma, one Hashi Corp, you can make a lot of money. Do you think so? You don't think you make a lot of money on one?

**Harry Stebbings** [36:56]:

Oh, no. I totally think you do, but do you know your winners early? For those that are the Figma's and the HashiCorp's or the Saleslofts or the Algolias Yeah. Are gorgeous. Do you know it early, you ever surprised? I

**Jason Lemkin** [37:05]:

think you know that they are operationally successful early. You know that they're gonna grow. I had no idea that any of my cash unicorns, the ones that were exited for billion, I didn't think any of them would except for TalkDesk. And it's not that I didn't love the founders. It's just so hard that I would not have predicted that Pipedrive, Algolia, Salesloft would get that big. I knew TalkDesk would just because going from 1 to 15,000,000 with so few employees in a year was so much product market fit in the year that you're okay. Well, this is gonna be worth 1,000,000,000, but not more. Not the 10,000,000,000 on paper. So I think the meta learning is just get into winners, just don't worry about the stock market. Don't worry about multiples, because you can't control it, and it's gonna change so many times. It takes ten years to get a billion dollar exit, like M and A. The IPO can rate ten years for so the market's gonna change a lot in 10,000,000,000. You don't even need to look other than to understand follow on capital and burn rates. Just do I do think if you're able to invest post revenue in SaaS, you know it's gonna do reasonably well, and you also know it's probably gonna have a crappy year in there.

**Harry Stebbings** [38:03]:

I definitely have a sweet spot of highlight, but post product, 20 to 40 k in revenue, you have some customers, you have some data. The founder's probably still leading the sales process, but there's something there. There's that seedling of goodness.

**Jason Lemkin** [38:15]:

You know, the truth, that's where I started investing because I was like, I'm a founder. I need to invest at least in a moment in time where I can tell if they're a better founder than me. And so I needed a little meat on the bones, and you're a founder now, Harry, so you know who's better than you as a founder, not just investors. So founders have this investing superpower that money managers don't have, which is they know who's better than them. But if in SaaS and B2B, if you do that pre revenue, you really can't be sure. I just Jason, what happens with re ups? They don't want new managers. Are they re upping? I think that if you have done reasonably well as a manager, you are still earmarked for the next fund. I think you are still earmarked. Whether you will get it, and whether you will get it in the same amounts or the way you want, I don't know the answer. I know that other than one LP, I remained earmarked. One LP de earmarked me. That was a learning process. But I know I'm your it doesn't mean I might not get any more money. But I know that I'm but the budgeting process for LPs, like, I'm on the other side, it's really complicated between capital calls and timing and managers. It's not a simple process. You have to plan the science out of it. Otherwise, you're gonna get hit hard. Why? So many capital calls over so many years and so many managers. Why did they de earmark you? Did they tell you? I think they felt I was investing too slowly and wanted to invest in more in crypto or a hotter manager, they said.

**Harry Stebbings** [39:24]:

I love you're investing too slowly. What you don't want vintage diversification in this cycle. I agree with you because I I invested 35% of my fund in seventeen, eighteen months. My LAP are going, that's fantastic news. This is great. Unlike every other manager, you deployed slowly. Good.

**Jason Lemkin** [39:39]:

There is a certain amount of pressure to deploy capital, but LPs, they're dealing with large pools of capital, and they want expected risk. They don't want the unexpected risk. That's what freaks them out. There's this one fund out there, which who we won't name names, who raised their huge I think it's their third fund, and they called 95% of it at the peak and put most of it into some of the hottest crypto names, a well known fund. And my limited understanding from the limited overlap is that the LPs did not expect 95% of that fund to be called

**Harry Stebbings** [40:04]:

in the first year. On the reabs from what I understand, and I speak to a lot of LPs, if you had the chance to produce DPI last year and you didn't, you're in the bad books. If you deployed way too fast and left them very surprised on your deployment cycles, you're in the bad books. But otherwise, if you stuck to plan and you actually prioritize the relationship this is where I love people. You know me. If you did build the relationship throughout cycles and didn't just take money and say fuck off, and you start to plan, they should be there, but likely in the same, not an expanded capacity where they would have expanded normally. Do you see what I mean?

**Jason Lemkin** [40:38]:

Someone great on Twitter said, the l ultimate LP judge was how many exits did you have in 2021? So I'm new, but I did have $3,000,000,000 cash exits in 2021 in my investing career, but I didn't make those investments in 2021. So if I hadn't started investing or didn't have any, like, B2C stuff, if I'd invested early, I would have zero instead of these good looking cash. It's tough because there just wasn't enough time for all, you know, unless you're in these super hot deals to create those cash exits. You probably are sitting on no DPI. It doesn't mean your investments are bad, but it's just that's a time trouble. Is that there is secularity there. I think it's a very important question for LPs to ask is not just the fund, but the GP. They should ask, if you didn't have multiple billion dollar cash exits in 2021, you're not a good investor. Right. I saw that on Twitter, and it struck me as painfully true. As a GP, if you've been investing more than six or seven years and you didn't have multiple billion dollar cash outcomes in '20 at the best, because they were just so accelerated, you never will. The LP should just quit on you. But I just finished on a quick

**Harry Stebbings** [41:34]:

fire, my friend. But if we look forward to the next year, December 2023, we'll be in better or in a worse place than we are now.

**Jason Lemkin** [41:42]:

First of all, seed investors are optimists, I think. And I'm a founder, and founders are optimists. Based on all the downturns I've been in, the twenty sixteen flash crash, which we don't talk about enough in SaaS because it was terrible, when multiples fell to two x, three x, From the global meltdown in 2008 to 2009, I have learned again and again that things are brutal. They seem to move in slow motion, and then they come back pretty fast, and they're never quite as bad as we thought. So I find it very difficult to believe that when we see Okta growing 40% at 2,000,000,000, when we see the type of growth we see out there, that we will have these multiples when the Fed gets through whatever the hell it's gonna do, and we get on the other side of I just don't believe that we will have multiples that are just this low in the public market. Now, I'm not a DCF guy, and I'm not gonna talk to you about free cash flows in 2084. I'm a just a meat and potato SaaS guy, but I've never multiples this low when businesses were this good. I've only seen multiples this low when businesses were struggling or shrinking, like in 2016 when literally they were shrinking. And so I'm pretty bullish at the end of this year. I'm bullish that multiples will be up somewhere between 2040%, and I believe that will lead to a rush to deploy capital. But for founders, you have to understand that will never lead to a return of 2021. Buyers will be back. CIOs are still increasing spend next year. We're gonna get through a lot of things. Things will be at the end of the year, but we will never for founders that have only been in market or founders for three or four years, realize that you lived in insane times. They will be better at the end of this year than the start, but the world will never work the way it worked before. We can't have 80 x ARR public company multiples. They're not coming back. We're not gonna see Zoom go from 1 to 4,000,000,000 in one year ever again. This was a generational thing for us. Right? It's not gonna happen again. There's a lot of advice, which is wait till the markets thaw. It's not that simple, man. They're not coming back. They're not bouncing back to 2021. They're not bouncing back to good times. They're just gonna get a little bit better. But there's no thaw. If you can't raise any money at all today, like if you're unfundable, I don't think you're gonna be fundable at the end of the year. Okay? If you're fundable today, but you don't like the metrics, you don't like the valuation, you double the end of this year and you see some multiple recovery, you're gonna be pretty happy at the end of the year. But if you're unfundable today, you're gonna be unfundable even in a recovery. Do not wait for this magic moment when, air quotes, the markets recover, because it doesn't exactly work that way. Right? The bar is gonna remain high to be fundable for a very long period of time, especially Series A and B and later. It's gonna be remain very high. What have you changed your mind about in the past twenty four months? I've spent the last twenty four months relearning the unicorn lessons. Relearning that companies I thought would never be unicorns became unicorns, that sociopath CEOs became unicorns, that bullshit artists became unicorns, that folks that did not have an extremely strong understanding of the market became unicorns. And I felt like an idiot, as many of us did. I felt like an idiot not investing in a bunch of these companies where I just I couldn't see it. I couldn't see that they would become a unicorn. So now I'm relearning this lesson, and I think the lesson I'm learning is no cut corners, and that the bar is just insanely high, and so it should be. So I don't know. I'm still re digesting the fact that we learned so many lessons for twenty four months, and now we gotta quickly unlearn them because we it turned out that this stuff was hard. It's all hard. SaaS is hard. Startups are hard. It's meant to be hard. And I'll tell you my last little bit of lack of sympathy, but you talked about new founders being emotional. When I see like a founder cry, I have no sympathy. And I know someone's gonna listen to this and be mad, but it's supposed to be hard. Like, cry a little bit with me. Like, Harry, you and I can cry. We can end this. We can cry a little. I don't mean that literally, but adult up. I mean, it's this stuff is hard. Right? So that's what we're learning. It's hard. It's meant to be hard. You should have a terrible year. You should almost run out of money. Like, I bet if you went back in '20 VC and you looked in the early days, almost every top founder I knew almost ran out of money, but they didn't. They almost all had that great story. Right? You get them on stage outside of the last two years. You're getting on stage, you know, we were three weeks away. We had to meet 7,000 investors, and we only got one. And those stories kind of evaporated,

**Harry Stebbings** [45:32]:

but they're all gonna come back. My personal favorite, I got an investor update the other day. It said, the good, amazing team off-site. I was like, when that is number one Oh, That's we're still not good. It's still not okay. Jason, I love this. This has been fantastic. As always. I think it's so helpful for fans understanding games of year. So thank you so much, my friend. It's

**Jason Lemkin** [45:50]:

wonderful. Okay. Thanks, Harry. Best of luck to you and everyone in the audience in 2023. Let's this year is gonna end better than it started, so take advantage of

**Harry Stebbings** [46:00]:

As always, I so appreciate all your support. You can find us also on YouTube at 20vc. I always love to see behind the scenes. You can do that on 20vc.com. But before we leave you today,

## Sponsor read

**Harry Stebbings** [46:10]:

the single most important element of any team is their ability to work together in best and most efficient way, then Coda is the dog where teams can work on entire projects from start to finish with everything they need all in one place. Think about the way your team works today. If all the work is spread across different documents, spreadsheets, and a stack of workflow tools like they are in all of my teams, it's tougher to focus on getting things done, let alone getting them done together. And that's why I realized that I had to have Coda and why you need Coda. Coda is the doc that brings it all together by putting data in one centralized location regardless of format. With Coda, you'll never need to ask, where are the latest project updates? Anyone know where the performance stats are? This is what really slows teams down and prevents collaboration. With Coda, your team can operate on the same information collaborate in one place and get projects done much, much faster. Take advantage of this special limited time offer just for startups. Sign up today at coda.io/20vc and get a 1,000 startup credit on your first statement. That's coda.io/20vc to sign up and get a startup credit of a thousand dollars. And speaking of tools we cannot live without, you probably know Brex. Brex was the first corporate card for startups, but Brex has grown a lot since then to scale up right along with its customers. Now 90% of Y Combinator grads trust Brex as their all in one financial stack. I get to speak to founders all day, and I know how important having the right financial stack is to their success. With Brex, you get fast access to high yield business accounts, high limit cards, and rewards like cash back and billboards to fuel your growth. Beyond that, Brex has the venture debt, financial modeling, and spend management solutions you need to run your startup globally and well. So are you ready to make your future CFO proud? Learn more at brex.com/20vc. That's brex.com/20vc. And finally, if Coda and make your team work more efficiently, Intercom makes modern customer service software that really redefines how businesses support their customers, and their platform connects businesses directly to customers using powerful messaging and automation. Intercom enables teams to scale support without investing more resources, leading to happier customers and more efficient support teams. And Intercom is used to send over 500,000,000 messages per month and enables interactions with over 600,000,000 monthly active end users trusted by customer service teams at more than 25,000 global organizations, including Atlassian, Amazon, and Lyft Business. Check out this amazing offer. Startups get advanced intercom features at a 95% discount, so do not miss out. Head over to intercom.com/20vc to find out more. As always, I so appreciate all your support, and we have an incredible episode with Jeff Jordan at Andreessen Horowitz on the show on Monday.