We’re back!! Jason Lemkin, Harry Stebbings, and Rory O’Driscoll diving into the startup and venture capital conversations that actually matter—from Benchmark’s masterclass in talent acquisition to why billion-dollar ARR companies are “still early” in today’s elongated exit environment. This week’s discussion gets refreshingly honest about stage specialization, the anxiety economy of modern VC, and whether Deal or Rippling represents the better bet at scale.
Benchmark Pulls Off Another Masterclass in Talent Acquisition
Benchmark doesn’t add partners often, which makes Everett Randle’s appointment as their latest GP genuinely newsworthy. Randle brings an impressive pedigree—Vista, Thrive, Founders Fund, and Kleiner—compressing what might typically be a 15-year resume into just 8 years of high-velocity career progression.
“Reports of my death have been greatly exaggerated,” as Rory notes, referencing the recent speculation around Benchmark’s stability. Just months after a partner departure sparked hand-wringing about the firm’s future, Benchmark executed exactly what you’d expect from a tier-one institution: methodical, strategic talent acquisition from adjacent golden firms.
The playbook is almost mechanical in its elegance. “I can just see it there—you make a list of top firms that have good young people, you draw a list and you get on the phones, you say who have we overlapped on a deal with, and you go and you hire someone talented from one of the adjacent golden firms where the pitch is purely equal partner,” Rory explains. “Mission accomplished. Tick done and on they go.”
But there’s something deeper happening here that reveals the new velocity of venture capital careers. If you’re ambitious in 2025, you don’t stop at B-tier firms. You move fast through A-tier institutions, accumulating pattern recognition and relationships at warp speed. Randle’s trajectory—five marquee firms in 8 years—represents a new archetype: the hyper-ambitious venture capitalist who treats early career like founders treat pivots, iterating rapidly toward optimal positioning.
The financial incentives make the decision straightforward. Benchmark is known for being extraordinarily generous with backdated carry, bringing new partners into existing carry pools that include home runs like Firework, Discord, Lore, and Manus. “It’s the godfather offer you can’t refuse moment,” Jason observes.
Yet even as we celebrate these VC career wins, there’s a humbling reality check. “You have to remember probably owning one-tenth of one-hundredth of what the best AI engineer is earning in Facebook Meta just to put all of us—us included—in our place,” Rory notes. “It used to be the best economic gig in tech and now we have to remember no matter how wildly successful we VCs are, there are people vesting billion dollars over four years at Facebook Meta because they wisely did computer science and AI at school 10 years ago.”
In winner-take-all moments, the market for talent across every domain becomes extraordinarily heated. Top-tier venture capital is no exception.
The Bull Market Delusion and TAM Exhaustion Ahead
“The easiest way to make money in 2025 is to take the very biggest companies and double down one more time,” the conversation opens. It’s a thesis increasingly dominant in venture circles: why take early-stage risk when you can write growth checks into already-validated category leaders?
But this framing masks deeper anxieties about what happens when the music stops.
“My gut tells me we’re overromanticizing verticals in the age of AI,” says Jason. “We’re going to hit the same TAM exhaustion and it’s going to be worse because expectations are so high. If any kind of deceleration happens—because of any kind of saturation or slowdown—everyone’s estimates on what’s going to happen here are wrong.”
This is the uncomfortable truth about bull market psychology: “In a bull market, the most aggressive person will look the smartest just before the crash because the more risk you’ve taken, the more money you’ve made.”
The vertical SaaS wave of the 2010s provides instructive precedent. Investors piled into category-specific software companies, excited by the promise of deeply tailored solutions commanding premium pricing. Many of these companies did build successful businesses—but they also ran headlong into TAM constraints that made achieving venture-scale outcomes difficult. The concern now is that AI-powered vertical solutions will follow a similar trajectory, but with even higher expectations baked in.
The challenge is particularly acute because of how markets are valuing optionality and scale. “Frankly, it feels tough today,” one participant observes. “As tough as it’s ever been.”
Consider the implications: if billion-dollar ARR companies are “still early” (a point we’ll return to), what does that mean for investors writing checks into $5-50M ARR businesses? The math becomes increasingly challenging when exit timelines elongate and the bar for successful outcomes continues rising.
The Elongated Path to Exit: Why Billion-Dollar ARR Is “Still Early”
Perhaps the most striking moment in the conversation comes when Jason casually drops this assessment of Deel (the international employment platform) and Rippling: “A billion [in ARR] is still early to me today. Not because I don’t have profound respect for a billion in ARR, but because I worry that for us to get our exits, we have to see enough acceleration past that point.”
Let that sink in. A billion dollars in annual recurring revenue is “still early” from an investor perspective.
This statement encapsulates the core challenge facing venture investors in 2025: exit timelines have elongated so dramatically that even spectacular revenue milestones don’t necessarily signal proximity to liquidity. The companies need to prove not just that they’ve achieved scale, but that they can continue accelerating beyond it.
The Deel vs. Rippling comparison becomes a fascinating case study. Both are exceptional businesses with strong growth trajectories. Deal is solving an acute pain point—international onboarding and employment—that founders who’ve experienced it understand viscerally. “It is an acute pain point, it is a problem that we’ve all lived as a founder, we’ve lived with, very difficult to solve,” one investor notes.
Rippling took a different approach, essentially reimagining what Zenefits and Gusto attempted but executing far more effectively. “It is a very clever problem to solve,” they acknowledge. The company built a platform solution for US payroll and HR that already had point solutions in market, but bundled them with superior user experience and expanding functionality.
So which is the better bet at scale?
The answer reveals fault lines in how investors think about defensibility in the AI era. Some argue Deel’s pain point is more acute and therefore more defensible. Others counter that Rippling’s massive installed base becomes increasingly valuable as AI enables rapid feature expansion and market consolidation.
“Deel can build everything Rippling has, right? It’s already built a lot of it. And vice versa.” one investor observes. “And you can bring Parker [Conrad] on and we can say, ‘Hey, were you slow to do some of this international stuff?’ And why was Gusto so slow?”
But the counterargument crystallizes the bull case for installed base leaders: “I’m not going to say in the age of AI that having these massive installed bases isn’t a huge asset.”
This tension—agility and acute pain point versus installed base and platform leverage—defines many of the most interesting investment debates in SaaS today. When pressed for a final verdict, one investor chose Rippling: “As great a business as Deel is at $1B+ ARR, I don’t know ultimately as SMBs come in and out of the market and companies churn. I don’t know ultimately which is the most defensible because both can compete with each other.”
It’s a fascinating admission of uncertainty even among sophisticated investors when evaluating billion-dollar-revenue companies with strong growth trajectories. The variables have become so complex—competitive dynamics, TAM constraints, AI leverage, installed base effects, execution risk—that conviction becomes difficult even at scale.
Stage Specialization and the Tyranny of Competence
One of the more revealing exchanges in the conversation centered on investment stage strategy and the importance of staying within your competency zone.
“If a billion is still early, why in God’s green earth are you writing checks to people doing a million dollars in ARR?” one investor challenges. “Because if you stay out of your sweet spot investing—I for me, all my losses were when I strayed out of my sweet spot. All my LPs are like ‘take more risk Jason, do take more risk.’ It was the worst advice I ever got, was to take more risk in venture. The best advice for me is to take less risk.”
This is a profound insight often lost in venture’s hero narrative about boldness and conviction. For this investor, the highest-return strategy isn’t swinging for the fences—it’s staying relentlessly focused on the stage where he has unique value to add and pattern recognition advantages.
“My only competitive advantage is you start getting customers and you don’t know how to scale revenue and you want help scaling GTM, and enough of those folks come to me that I can achieve at least top decile or whatever rates,” he explains. “I’m not a like—I’d have to learn how to—I can’t nuzzle my way into co-leading Lovable. I don’t have those skills.”
Compare that to investors operating at later stages, who acknowledge they have no unique value to add at companies like Deal or Rippling at current scale. The honest assessment of where you can and cannot contribute differentially is rare in an industry that often prizes confidence over precision.
But here’s what makes this particularly fascinating: “We’re doing these deals at, you know, half a million, a million, five, 10 million in ARR and then Jason can casually say, ‘Oh, by the way, when you get to a billion, you’re still early.’ I mean, this is the problem with venture. It’s slow.”
The elongated timeline to exit means investors at every stage are experiencing compression of their value-add window. If you invest at $1M ARR and the company needs to reach $2-3B in revenue before exit opportunities materialize, you’re looking at 8-12+ year hold periods in many cases. That’s a long time to stay relevant and helpful as an investor.
“It’s stunning that we’re in the same business, in the same rough construct, in the same quote asset class—you have Jason doing $5 million in companies doing a million and you have people doing half a billion dollar investments in people doing six billion in revenue and we think of them the same and it’s obvious when you think for even a second that those two things are so not like each other that it’s absurd, but that’s the world we live in now.”
This might be the most important observation in the entire conversation. Venture capital has fractured into subspecialties so distinct they barely resemble the same activity, yet we continue treating them as part of a unified asset class. The skills, pattern recognition, network effects, and value proposition for investing in pre-seed companies have almost nothing in common with growth equity investing into scale businesses. Yet both groups attend the same conferences, compete for the same LP capital, and compare performance using similar metrics.
The Anxiety Economy of Modern Venture
“This is my anxiety. It’s my anxiety today,” one investor admits when discussing the challenge of investing at earlier stages while acknowledging that even billion-dollar outcomes represent “early” innings from an exit perspective.
That anxiety is well-founded. The mathematics of venture have become increasingly challenging as:
- Exit timelines elongate – Companies stay private longer, meaning investors face extended J-curves before realizing returns
- The bar for outcomes rises – What constituted a successful exit in 2015 might barely move the needle for a 2025 vintage fund
- Competition for deals intensifies – More capital chasing opportunities at every stage, compressing returns
- AI uncertainty clouds valuations – Will AI enable installed base leaders to consolidate markets, or will it empower nimble challengers to disrupt faster?
The result is an industry experiencing profound uncertainty even amidst apparent abundance. There’s more capital available than ever, yet genuine conviction about optimal deployment strategy feels elusive.
“Frankly, it feels tough today. As tough as it’s ever been.”
That statement, from an investor experiencing real success, captures something essential about the current moment. The difficulty isn’t lack of opportunity—it’s the challenge of maintaining strategic clarity when the fundamental rules of the game keep shifting.
What This Means for Founders
For founders navigating this environment, several insights emerge:
Stage specialization matters more than ever. Understand what value different investors can actually provide at your current stage. An investor optimized for $1M ARR companies likely can’t help you as effectively at $100M ARR, and vice versa.
Installed base defensibility is being repriced. In an AI-enabled world, large customer bases with strong data network effects may prove more valuable than previously assumed. The pendulum might be swinging back toward platform plays over point solutions.
Revenue milestones are necessary but not sufficient. Achieving $1B in ARR is extraordinary, but investors increasingly view it as a waypoint rather than a destination. Plan for longer runway to exit than historical precedent suggests.
TAM concerns are intensifying. Investors are becoming more skeptical about vertical-specific opportunities, particularly in AI. If you’re building in a narrow vertical, you need exceptional clarity on expansion paths and market sizing that accounts for realistic penetration rates.
The competition for top talent spans asset classes. If you’re recruiting executives or engineers, remember you’re competing not just with other startups but with the astronomical compensation packages available at Meta, Google, and other established AI leaders.
The conversation ends with an observation about how engrossing these debates have become—a sign that we’re in a genuinely uncertain and dynamic period for venture investing. The participants are grappling in real-time with questions that don’t have clear answers, which makes their candor all the more valuable.
These aren’t theoretical debates. They’re playing out in term sheets, board meetings, and portfolio company strategies across the industry. The investors who navigate this environment most successfully will be those who maintain intellectual honesty about what they do and don’t know, stay focused on their areas of genuine competitive advantage, and resist the siren song of FOMO-driven strategy drift.
Quotable Moments
Jason Lemkin:
- “A billion in ARR is still early to me today. Not because I don’t have profound respect for a billion in ARR, but because I worry that for us to get our exits, we have to see enough acceleration past that point.”
- “All my LPs were like ‘take more risk Jason, do take more risk.’ It was the worst advice I ever got, was to take more risk in venture. The best advice for me is to take less risk. That’s how I make the most money.”
Rory O’Driscoll:
- “I can just see it there—you make a list of top firms that have good young people, you draw a list and you get on the phones, you say who have we overlapped on a deal with, and you go and you hire someone talented from one of the adjacent golden firms where the pitch is purely equal partner. Mission accomplished.”
- “It’s stunning that we’re in the same business, in the same rough construct, in the same quote asset class—you have Jason doing $5 million in companies doing less than a million in revenue and you have people doing half a billion dollar investments in people doing six billion in revenue and we think of them the same and it’s obvious when you think for even a second that those two things are so not like each other that it’s absurd, but that’s the world we live in now.”
Harry Stebbings:
- “You have to remember probably owning one-tenth of one-hundredth of what the best AI engineer is earning in Facebook Meta just to put all of us—us included—in our place. It used to be the best economic gig in tech and now we have to remember no matter how wildly successful we VCs are, there are people vesting billion dollars over four years at Facebook Meta.”
- “I do think that we obviously just have to acknowledge the difference between enterprise and consumer having AI market fatigue because I think consumers will continuously be in market for new generative AI tools to do videos, pictures, websites, you name it. So I think that that’s a big difference.”
