Jason Lemkin: PluralSight S*** the Bed & The Next IPO Candidates | E1160

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Tech Industry Trends

The tech industry, particularly B2B to B2B software, is experiencing significant cutbacks and layoffs.
Canva's success in the consumer subscription space contrasts with the struggles of tech companies.
The viability of PE firms as primary buyers for software companies is uncertain due to the high loss ratio and potential for more significant write-offs.
Salesforce's recent announcement of slowing growth has raised concerns about the broader tech industry's trajectory, despite positive signs in the first half of 2023.
Unicorns that have experienced success are facing challenges and may need to rebuild their management teams to adapt to the changing market conditions.
The number of $50 million plus software exits in the US has been stuck at around 57 for a decade, while the number of startups has exploded.
Founders are still receiving outdated fundraising advice from 2021-2022, such as running a process and giving investors one hour to decide.
The recent decline in unicorn startups has impacted the events industry, particularly in the SaaS sector.

The speaker discusses the potential for AI to create hundred billion dollar companies and the increasing spending on AI.
AI is now a necessity for SaaS companies to compete, and those that don't invest in it risk being steamrolled by the competition.
The impact of AI on revenue growth for tech companies is still unclear, with some companies reporting benefits while others have not seen a significant boost.

Limited Partner (LP) sentiment remains optimistic, with tolerance for underperforming funds, but concerns about "crazy AI deals" exist.
High-profile, conservative investors participating in large AI deals suggests their belief in substantial growth potential and a path to significant returns.
The speaker reflects on his own investment strategy and how taking LPs' money too seriously can lead to unnecessary stress and missed opportunities.
The speaker criticizes the practice of taking SPVs too seriously and suggests that investors should be less risk-averse and more willing to accept losses.
Focus on finding fund returners rather than individual investments with high returns.
Selling a small portion of a successful investment may not make a significant difference in the overall fund return.
The author emphasizes the importance of carefully crafting emails when reaching out to investors, as a poorly written email can lead to missed opportunities.

The current market compression in SaaS valuations is concerning, especially for high-growth companies like Clavio and Rubric that are trading at modest multiples.
Liquidity in the tech industry has been scarce since 2021, with only two IPOs and limited options for cashing out investments.
Getting acquired is harder than it seems, and the current number of exits is not enough to support venture math.

The author notes that field marketing still accounts for a significant portion of marketing budgets but that some companies are hesitant to deploy these budgets.
The author observes a shift in preferences, with many individuals opting to stay home rather than attend in-person events, which has affected the events industry.
To be profitable, events need to have over 20,000 attendees.
The events industry is full of terrible people who don't care about their work.

The speaker considers their company to be a fund first and a media company second.
The speaker used to spend more time on the events business before 2020 due to a terrible team.
The biggest near-death experience was losing $10 million in March 2020 when their event was shut down due to COVID-19.
He cares more about his team now than he used to, but he finds it harder to motivate them.
Analysts work tirelessly to find deals without any fixed salary.