So now is simply a terrible time to be raising growth stage venture capital.  With the BVP Cloud Index down 40%+ from a year ago, and many of the top Cloud leaders trading for as low as 5x ARR, it’s just hard to justify a later stage $300m-$400m valuation round these days, let alone a true unicorn round.

We just did our latest Workshop Wednesday with Omers Growth, and they only did one growth investment last year.  One.  A great deep dive on later-stage SaaS investing here:

And look venture is a mess today.  Crypto investments are going bankrupt.  Unicorns that looked like sure things a year ago are now running out of money.  Board meetings are endless drama sessions.  And there are too many founders looking for bridge financing, and not enough bridge financing to go around,.

And yet, these are still very good times to raise a seed round.  If … you are capital efficient.


  • First, there are tons of new and newer seed managers that are ready to go.  They don’t have 20 broken unicorns to deal with, nor lots of mark down to manage.
  • Second, top funds (including Sequoia this week) have brand-new Seed funds.  They are ready to go, too.  Again, without the direct baggage of prior funds.
  • Third, VCs believe they can still make money in seed.  Yes, if you invested in Figma at a $10m pre and it sold for $2B instead of $20B to Adobe, you would have made a lot less money.  But still plenty of money.
  • Fourth, many growth and mid-stage VCs are fleeing to seed.  This might not be as smart as it looks, as risk of scaling goes up.  But many later stage VCs are doing more seed because growth is mostly frozen.

This isn’t to say it’s quite as good of times for Seed as it was during the crazy times of late 2020 to very early 2022.  Not even close.  But — it’s still pretty darn good because there are so many more players that want to invest.

It’s just, there’s one huge change.  You have to be capital efficient.  The odds of another check coming anytime soon have plummeted.  Series A rounds have become very tough, and Series B-E rounds have become downright rare.

So no one can stomach a high burn rate anymore.

But if you have a smidge of traction, early strong growth, and are capital efficient — there’s far more capital out there than founders to invest in.  In fact, every great Seed VC fund I know of has more capital to deploy right now than deals.  They’re ready to go.

Even at SaaStr Fund, I’m looking to do 2-4 deals this year from $750k-$4m.  And I’m already behind.

A deep dive on this and much more in our latest conversation with Harry Stebbings on 20VC here:

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