I often wonder how much the market's pullback from SaaS broadly is an excuse to catch up from being over their skis during the ZIRP euphoria of 2020/2021.
Most of the best opportunities we see have not looked the point solution SaaS, even well before the AI boom. Software hasn't been a differentiator for a long time, but now it is just very obvious.
Fantastic read! Your case for enterprise and infrastructure being more insulated makes a lot of sense.
I do wonder though - if AI is compressing time-to-build and scale this dramatically, does it also shrink the safe early-stage window? Could a $2-7M ARR company today hit late-stage scale (and that repricing pressure you mention) much faster than before?
I think that's right. It's part of our strategy. I see a world where some of these companies scale beyond traditional growth equity fairly quickly if you don't catch them soon enough. Waiting for them to reach $10, $20, or $30m ARR could mean either missing them completely or doing so at such high valuations that it erodes the returns and incentive to invest.
I often wonder how much the market's pullback from SaaS broadly is an excuse to catch up from being over their skis during the ZIRP euphoria of 2020/2021.
Most of the best opportunities we see have not looked the point solution SaaS, even well before the AI boom. Software hasn't been a differentiator for a long time, but now it is just very obvious.
Love the post!
Fantastic read! Your case for enterprise and infrastructure being more insulated makes a lot of sense.
I do wonder though - if AI is compressing time-to-build and scale this dramatically, does it also shrink the safe early-stage window? Could a $2-7M ARR company today hit late-stage scale (and that repricing pressure you mention) much faster than before?
Thanks, Sohum.
I think that's right. It's part of our strategy. I see a world where some of these companies scale beyond traditional growth equity fairly quickly if you don't catch them soon enough. Waiting for them to reach $10, $20, or $30m ARR could mean either missing them completely or doing so at such high valuations that it erodes the returns and incentive to invest.