Jason M. Lemkin says Series A is the best investment stage in Cloud and SaaS right now because of a market gap: seed capital is abundant and loose, but Series A has gotten disciplined. Cloud stocks are up 35% this year, signaling sector strength.
I said this a few months ago, and then, you know, I said, hey, Series A is the best place to invest today in Cloud and SaaS, right? And David Sacks, his response was, don't tell anybody. Right? Because when you have a dislocation at a stage, that's where you make money in venture, right? There's no dislocation in seed from the carbon crimes. Anyone that thinks seed isn't happening, they're out of their minds. We have a. We still have hyper location in seed. We don't have dislocation. There is an inexhaustible amount of seed capital, at least for hot companies. Inexhaustible. Every YC company and every batch. They may not all get funded. Funded, but there is enough capital to fully fund all. At 20 post, that only takes. What's 200 million. 2 million. That takes 400 million to fully fund a YC batch. There is 4 billion of capital that would like to invest in that, in that batch. Right. Whether it happens or not, it's a different question. But I do think there's discipline in the market for the moment. Outside of AI, outside of AI, there's discipline. And so founders either have to respect that discipline or, or realize they may not be able to raise. Right. And, and so everyone in Series A is being disciplined and maybe they're being too disciplined that we'll have to find out because, you know, Cloud is up 35% this year.
