G2 put on its big annual digital event, G2 Reach, this week and we were lucky enough to host what ended up being a simply amazing session on the real state of venture capital right now.

I moderated a session with 3 of the best investing in SaaS:  Doug Pepper, GP at Iconiq, Arun Mathew, GP at Accel, and Alex Kayyal, VP and head of all of Salesforce Ventures.  They’ve collectively invested in so many of the best of the best.

And what I learned was that things are even rougher that I thought, especially at the growth stage:

A few learnings:

  • Accel Growth has done 1 growth investment this year, versus 25+ last year.  Just one.
  • Iconiq, which has invested in so many SaaS leaders, has seen growth rates at startups, on average, fall by 50% over the course of the year.  Tough.  Investing pace in Iconiq Growth is way, way down as well.
  • The best in Cloud and SaaS are still growing at epic rates, but growth is coming down, which is pressuring everyone.
  • Even 2 years of cash runway isn’t a lot, because that means next year … you’ll only have 1 year.  An important point.
  • Valuations just make most growth rounds almost impossible.
  • But … the best of the best are still growing at epic rates, especially on the way to $10m ARR.  VCs still expect the same outsized growth at that stage, even if growth in some cases has slowed at later stages.

Listen to this one.  There’s a lot of optimism in here, especially for later in 2023.  But it’s one of the deepest and most on-point dives on venture today I’ve seen in a while.

And listen to all the other sessions here.

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