The latest from the 20VC x SaaStr collaboration with Harry Stebbings, Jason Lemkin, and Rory O’Driscoll
The TL;DR
We’re living through the greatest wealth transfer in venture capital history—and it’s happening because the best companies refuse to go public. Lightspeed just raised $9 billion. SpaceX is eyeing a $1.5 trillion IPO. Cursor is eating into Figma’s market. And the entire definition of what a “category” is in SaaS is about to collapse.
This week’s conversation covered the mega-fund dynamics reshaping early-stage investing, why companies with 98% gross retention have time to reinvent themselves for AI, and what happens when you have to factor in the “Elon Option Value” to make valuation math work.
Top Takeaways
1. The Private Market Gold Rush is a Generational Gift to Venture Capital
The biggest companies in tech—SpaceX, Anthropic, OpenAI, Databricks—are staying private longer than ever before. And that’s creating an unprecedented opportunity for late-stage venture funds.
“All these leaders not IPOing is the greatest gift to venture in our lifetimes,” Jason says. “The fact that VCs are able to keep this for themselves… of course Lightspeed should raise $9 billion because the public markets aren’t getting this.”
The math is stark: Tesla IPO’d at $1.7 billion valuation because it had to. SpaceX will likely IPO at $1.5 trillion. Same founder, same ambition, completely different capital markets. That 1000x difference went entirely to private market investors.
2. Mega-Funds Are Reshaping Seed Economics
When Lightspeed raises $9 billion across six funds—roughly $2 billion for early-stage—it fundamentally changes the seed investing landscape. “It really means you don’t care what you pay for seed,” Jason explains. “It just doesn’t matter. You work for speed.”
At that scale, whether you pay 20x or 50x at seed is irrelevant. It’s an entry ticket to the A, B, and C rounds. This contributes to the “barbell” effect in venture: mega-funds at one end, and increasingly squeezed smaller managers in the middle.
3. The “Elon Option Value” is Real—and Unquantifiable
SpaceX’s rumored $1.5 trillion IPO valuation doesn’t make sense by traditional metrics. At roughly $15 billion in revenue growing in the early-to-mid 20s, you’re looking at 70-80x 2026 revenues.
“You can’t run the numbers on SpaceX and come up with the 1.5 trillion. You just can’t,” Rory admits. “But what you can say is… this is one of the few people on the planet who literally might find you another trillion dollar market that wasn’t in the original plan.”
That’s the Elon Option Value: a premium for the founder’s demonstrated ability to pull rabbits out of hats. Starlink wasn’t in SpaceX’s original business plan. Now it’s the growth driver.
4. AI is Collapsing Traditional SaaS Categories
One of the most important themes for 2026 and beyond: massive convergence of categories. The old model—where DataDog competes with PagerDuty seven years later—is dead.
“Marketing, sales, and support have already converged to one agent” in e-commerce, Jason notes. “It’s already happening there. It’s actually surprising it’s taking a full 12 months to happen in coding.”
The insight: “We all want to talk to the same agent. Designers, product people, engineers, DevOps… there’s this meta agent where we all can collaborate and work together as one company.”
5. Cursor vs. Figma: Disruption Through “Maiming”
The real disruption risk isn’t that Cursor completely displaces Figma. It’s that Cursor “maims” Figma—and many other established SaaS companies.
“The old customers don’t leave. They renew. They don’t buy as many seats… logo retention remains good. But NRR drifts down and new customers, the next generation, the kids from YC, they defer that purchase.”
This “maiming” pattern applies across the board: Atlassian is slowing down. GitLab is arguably being maimed. Even companies that should be massive AI beneficiaries—like database providers—might be getting maimed because competitors are taking pockets of market share.
6. High GRR Buys You Time—Use It
For founders at established SaaS companies feeling the AI pressure, there’s hope if you have strong gross retention. UiPath has 98% GRR. Salesforce has similar stickiness. That buys you time.
“He has enough time as one of the greatest B2B founders out there to build the agentic products that $2 billion of his customers want to buy and aren’t leaving,” Jason says of Daniel Dines.
But the job is clear: get your NRR up by selling AI-native products to your existing base. Go from 107% to 130%. “Databricks has 150% NRR at $5 billion ARR. Get it up.”
7. The 10-Year Return Warning
Apollo’s prediction of zero public equity returns over the next 10 years isn’t about a crash—it’s about entry price.
“When you buy at a high price, I can’t tell you how you’ll do next year,” Rory explains. “Maybe the stocks will keep going up and you’ll feel smart, but what I can tell you for sure is the probability of making money over 10 years is very correlated to your entry price.”
The cautionary tale: Cisco, the darling of 1999, just got back to its ’99 stock price this week. That’s 25 years to break even if you bought at the peak.
8. Enterprise AI Spend is Concentrated in Coding
Here’s a staggering stat: 55% of all enterprise end-user spend on AI right now is coding and coding-related. Everything else combined is 45%.
“This is the epicenter of the enterprise AI revolution right now,” Rory notes. What will that mix look like in three years? Either the other categories catch up, or there’s something intrinsically valuable about software development automation that makes it the dominant use case.
9. The SpaceX IPO Playbook: Narrative Over Numbers
How do you get an IPO done at $1.5 trillion when the numbers don’t support it? You control the narrative.
Jason’s hypothetical: “Google anchors them with $10 billion. They’re already a 10% shareholder… as soon as that is, we’re running out of space in the IPO. Google’s in for $10 billion, Fidelity is in for $2 billion, and all of a sudden you start to panic that you’re not going to get your shares.”
It’s not about the fundamentals. It’s about creating scarcity and momentum.
10. Be Kind—It Might Pay Off
The human story behind SpaceX’s success: Peter Thiel fired Elon Musk from PayPal but treated him well. He fully vested all of Elon’s stock, “took nothing out of his pocket, thanked him for it.”
When SpaceX was about to die, Elon went to Founders Fund. “Peter Thiel gave him the money in an hour.”
Founders Fund now owns roughly 10% of what could be a $1.5 trillion company. “Even for a billionaire, it might pay off being kind.”
The Oracle and Broadcom Correction: Reading the Tea Leaves
Oracle dropped 45% from September highs. Broadcom lost $300 billion in market cap in 48 hours. Is this a warning sign?
Rory’s take: These are the “high octane bet on AI.” They have no IP in the AI space itself—they’re providing commodity infrastructure. When the market gets nervous about AI capex returns, they get hit hardest.
“If you think the capex cycle has two more years of strong legs, then you could see these guys rebound. If you think we may have found an equilibrium… then you would be scared of owning them.”
The market is doing its job: filtering through the mega-trend to identify who has a real plan and who doesn’t.
The ChatGPT Growth Slowdown No One’s Talking About
ChatGPT was the most downloaded app in the US for 2025. But growth has slowed to single digits monthly.
“There is nothing as terrifying as a high growth bet that slows down,” Rory warns. “Because what happens is you go from being valued on growth to being valued on cash flow.”
The question for OpenAI: Can they Robin Hood it—maintain a stable user base while driving more revenue per user? Or will they need to Meta it—find ways to expand from 800 million users toward 4 billion?
Without ads and with expensive inference costs, the path to Meta-scale penetration is unclear.
The Disney-OpenAI Deal: IP’s Revenge?
Disney investing $1 billion in OpenAI isn’t about the money—it’s a cross-licensing deal that sets the template for how AI companies will pay for content going forward.
“This is a resurgence of the value of IP in the age of AI when the first history was just rip everybody off,” Jason notes.
The early movers get better terms. “Everyone else is going to pay worse and we’re going to ratchet up the terms to use our IP… in 3 years, we’re going to raise the rates again.”
Would You Rather?
Figma at $17B or Cursor at $29B?
- Jason: Figma. “Everything’s much less stable than we thought… we’re going to look back in 24 months and see there was a lot less stability in these so-called leaders than we thought.”
- Rory: Cursor. (No argument needed—”that’s the beauty of money.”)
OpenAI at $500B, Anthropic at $360B, or Google at $2T?
- Jason: Google. “The level of confidence in where they’re going that I see across the team we work with… when I see everything’s going right and the team feels it and the team knows it. How often does that happen at this scale?”
- Rory: Anthropic at $170B would have been the call. At $360B, “you might be fully valued.” But between the three, he’d take Anthropic for its sensible, boring convergence on profitability.
Quotable Moments
Harry Stebbings
“If you’re not playing the big game, do you really matter?”
“Have we ever seen late stages as competitive as this?”
“Is this like a micro market hiccup, small undulation that we pass over, or is it a canary in the coal mine that’s foreshadowing something much bigger to come next year?”
Jason Lemkin
“All these leaders not IPOing is the greatest gift to venture in our lifetimes.”
“I can find a vibe-coded site and like 30% of the last YC class looked vibe-coded to me. I could see the Claude artifacts all over their homepage.”
“The real disruption risk isn’t that Cursor completely displaces Figma. It’s that Cursor maims Figma… the existing retention’s good, but the new guys are just taking enough of the new budget that your growth materially decreases.”
Rory O’Driscoll
“There is nothing as terrifying as a high growth bet that slows down.”
“You can’t run the numbers on SpaceX and come up with the 1.5 trillion. You just can’t.”
“You’ve got to make yourself cool because 30% growth—that’s what’s cool.”
This post is part of the ongoing 20VC x SaaStr collaboration. Watch the full episode here.
