Jason M. Lemkin gives a brief "vibe check" on the 2025 tech/VC landscape: while many founders faced tough years, venture dollars have returned but are concentrated into large AI- and growth-stage rounds (examples cited: OpenAI, Anthropic, Databricks, Harvey). Public SaaS growth averaged ~70% in 2021 during the pandemic, then retracted, but top AI-fueled companies are again experiencing hypergrowth. Fewer deals are happening overall even as total invested dollars rise, with massive growth rounds (hundreds of millions) absorbing capital. Lemkin's practical advice: founders should pursue AI-enabled products (co-pilots, agents) to tap experiment budgets and reignite growth.
Chapters
Y Combinator has four batches a year. There's AI events left and right. Things feel fast and furious outside of that ecosystem. It can seem strange what's going on and many folks are still struggling today after a few tough years. I thought I wanted to spend maybe 10 or 15 minutes doing a vibe check which we can chat about and then we can chat about other things as as well. So let's start with the vibe check and hopefully this will be helpful again. It sounds crazy today, but the average public SaaS company was growing over 70% in 2021. It was such crazy pandemic fue buying that honestly you could almost make money in venture just invest on anything. With good growth it felt like you didn't have to meet the people. And that has come back to an extent. It has come back to the extent because for the best AI fueled companies the growth is insane again and so people will take more and more risks. The other thing that's happening on this upper in this top chart, and this is obvious from the media, but but this chart really shows it, is that yeah, there's massive amounts of money in venture but it's going into these epic growth rounds. It's going into anthropic and OpenAI and level and all of these cool things. And Harvey today, Cisco Sequoia putting 300 million into Harvey for legal. Harvey A, that's 300 million. It's these growth rounds that are absorbing massive amounts of capital. Especially because in some cases like a databricks OpenAI others The valuations are 50, 60, 100, 300 billion so they can absorb massive amounts of capital. So all this and what you can see on this chart, on the top chart is the line is the number of deals. And the number of deals actually continued to fall at the end of last year even as the amount of money went in went way up. Okay, went almost back up to 20, 20, 22, 2021 levels at the end of the year. So the money is back but instead of going into tons of deals, it's going into AI and growth later stage stuff. So realize where you are. Maybe you think co pilots are silly, but if there's budget in your space, go build a co pilot. Okay, maybe you think it's crazy that Salesforce is charging $2 for Agent Force, but if it's working for them, maybe it'll work for you. There are different sources of budget in AI and I'm not suggesting maybe I'm stationed be a little cynical because it's all a lot of this is an experiment budget, but go find it. If you sit here and you don't tap into this budget on the bottom right, you're wasting an opportunity. You're wasting an opportunity to tap into this massive spend that is AI fueled. And that AI at the end of the day is fueling applications. It's fueling B2B applications. So go get off if you're feeling sorry for yourself. If growth of slow, go find it, because hypergrowth is crazy.
