VC Playbook 2025: What's Working Now

This week's 20VC discussion with Harry and Rory from Scale provided valuable insights into the current VC funding landscape. We explored key trends, including the impact of AI, aggressive capitalization strategies, and the pursuit of trillion-dollar outcomes. The recent $1 billion valuation of restaurant SaaS leader Owner, a SaaStr Fund seed investment, highlights the current market dynamics.

5 Key Takeaways from 20VC

  • Capital Flows to Strong Metrics: Companies with 10%+ month-over-month growth and $40M+ ARR are securing substantial funding rounds quickly, even as Series A funding overall declines. The gap between high-performing and struggling startups is widening.
  • AI Creates Urgency and Fear: Executives are adopting AI tools to avoid obsolescence, fueling demand for solutions like Clay that promise job security.
  • Trillion-Dollar Investment Thesis: VCs are prioritizing the potential for massive outcomes, justifying high valuations for companies like Perplexity with even a small chance of reaching trillion-dollar status.
  • Non-Technical CEOs Can Thrive in AI: OpenAI's success with non-technical leadership demonstrates the importance of recruitment, empowerment, and strategic partnerships.
  • Aggressive Capitalization is Key: Category winners are raising substantial capital to outpace competitors in the rapidly evolving AI landscape.

Series A Funding: Challenges and Opportunities

While Series A rounds are down significantly, strong companies with proven traction continue to attract investment. Seed rounds focus on team potential, while Series A requires demonstrable results. Companies should delay Series A fundraising until they have compelling metrics.

Preemptive Funding: Speed and Diligence

Competition for promising startups is driving aggressive preemptive funding, often just months after seed rounds. Investors are prioritizing speed and thorough due diligence to secure deals with high-growth companies.

Owner's $120M Round: A 2025 Case Study

Owner's recent $120M raise at a $1B+ valuation showcases the availability of capital for rapidly growing companies. Those exceeding the triple-triple-double-double growth benchmark have access to abundant funding.

AI Leadership: Driving Change in Organizations

CEOs are using aggressive AI implementation strategies to drive organizational change. While full AI adoption is rare, the push for transformation is creating opportunities for solutions that facilitate integration.

Marketing and AI: Addressing CMO Fears

Tools like Clay are gaining traction by addressing CMOs' concerns about job security in the age of AI. Positioning solutions as career-saving tools can be highly effective.

OpenAI's Non-Technical Leadership: A Winning Formula

OpenAI's continued dominance with non-technical CEOs highlights the value of strong leadership, recruitment, and strategic partnerships. Their success challenges conventional wisdom about the need for technical CEOs.

Tiger Global: Betting on Moonshots

Tiger Global's investments in OpenAI and Scale demonstrate the importance of high-potential bets in recovering from a challenging portfolio. Outsized returns from category-defining companies are crucial for long-term success.

Perplexity's $14B Valuation: The Trillion-Dollar Potential

Perplexity's high valuation reflects the potential for trillion-dollar outcomes in the AI search market. Investors are prioritizing companies with a credible chance of competing in this high-stakes arena.

Clay's Growth Strategy: Aggressive Capitalization and Market Dominance

Clay's rapid growth requires an aggressive strategy to capitalize on the current market opportunity. Securing additional funding and dominating the competitive landscape is essential for long-term success.

The 2025 Investor's Focus: Trillion-Dollar Opportunities

Identifying companies with the potential for massive outcomes is paramount in the current investment landscape. Prioritizing upside potential is key to maximizing returns.

5 Unexpected Insights to Consider

  1. AI Adoption Gap: The disparity between AI aspiration and implementation presents opportunities for solutions that bridge the gap.
  2. Enterprise Tech Layoffs: Large tech companies may need deeper restructuring to adapt to the AI transition.
  3. Unconventional Investors: Valuable insights can emerge from unexpected sources, challenging traditional investment approaches.
  4. Rapid Job Transformation: The pace of change in the tech job market is accelerating, requiring proactive adaptation.
  5. Portfolio Construction Shift: Fewer, larger winners are changing the dynamics of portfolio construction for both investors and founders.