Lemkin: AI infra wins VC meetings, profitable SaaS founders prepare 100 pitches
Jason Lemkin told founders on 20VC this week that top-decile growth in an "unsexy" category no longer guarantees a term sheet. A company at $20 million ARR, growing 6-7x and profitable, is getting no response from top-tier venture firms. Someone will fund it, Lemkin says, but not the usual suspects.
The reason: capital is concentrating on frontier AI and AI infrastructure at multiples that make traditional B2B SaaS look uninteresting. Anthropic reportedly hit $16.8 billion in Q3 revenue, up from $11.6 billion in Q2, with 85% gross margin. Modal raised $750 million at a $15.75 billion valuation months after a Series C valued it at $4.65 billion. Revenue run rate passed $1 billion. Those are the numbers getting meetings.
What this means for founders
If you are building vertical software or anything without "AI infra" in the deck, plan the round like it is 2009. Build a list of 100 investors. Budget two to three months. Treat the top 10 firms as a lottery ticket, not the plan.
Lemkin's other advice: know the fund math before you pitch. A $5 billion fund needs billion-dollar gains on their stake, not billion-dollar exits. When you pitch a $2 billion outcome to a mega-fund, you are not being rejected on quality. You are being rejected on arithmetic.
Sales hiring signals
Anthropic is the clearest ANZ signal in the discussion. The company says it serves 300,000 enterprise customers globally, with 80% of usage outside the US. Its Sydney expansion includes sales, partnerships, engineering and leadership hiring. No comp data surfaced, but the enterprise customer count and margin profile suggest a scaling enterprise sales motion.
Modal and CoreWeave show limited public ANZ sales presence. Bending Spoons, which acquired Evernote and Vimeo and recently took $330 million from Berkshire Hathaway, runs a different playbook: buy installed bases, cut costs, raise prices. Less about new-logo hunting, more about monetising what you bought.
The one-and-done trap
Lemkin used to love one-and-done: raise a couple million, never raise again, keep growing. But once VCs are on the cap table, dividending out profits or buying them out from cash flow gets expensive. If an investor owns 30% and you pay 6x cash flow to buy them out, you have tied up two full years of cash.
His new take: none-and-done beats one-and-done. With AI cutting the team size needed to reach $10 million ARR, bootstrapping is realistic for more founders than three years ago. One-and-done gives you the worst of both: a cap table that wants an exit and a business built not to have one.
Take the valuation that wins the day
Anthropic IPO talk dropped from $2 trillion to $1.5 trillion. Lemkin's advice: raise what you need at $1.5 trillion and move on. It is just a valuation. The extra 30% on the headline price is not worth a flat or down next round.
Pick the valuation you can comfortably grow into in 18 months, not the one that tops TechCrunch.