The Number of Active VCs is Down 62% From Its Peak

So it’s truly strange times in Venture Capital. Boom and Quiet Bust … at the same time.

On the one hand:

• AI is fueling a massive boom in venture investing, and a massive resurgence in unicorn and decacorn investing. From OpenAI to Anthropic to and more, massive amounts of venture capital are flowing into AI.
• The top funds keep raising more funds, and investing in many cases quickly. The top funds are still “going back to market” and deploying quickly.
• YCombinator valuations are higher than ever, and rounds are filled faster than ever. Even as they move to 4 batches a year.  YCombinator is just a slice of the startup world.  But it’s such a prominent one, that the fever and fervor to fund YC startups makes everything seem fast and furious.

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Answer: The clock starts ticking.

As soon as a VC invests, the follow calculation begins:

• Can the company grow fast enough,
• and accomplish enough,
• before running out of money,
• to raise the Next Round at >=2x the price just paid.

And if not — will the VC need to put more money in if they do start to run out? And should they?

Almost always the startup isn’t profitable, or chooses not to be after raising a round. So there is a certain amount of runway, a period of time that money lasts, and a “Zero Cash Date.” Know it cold.

SaaStr CEO Jason Lemkin joined ZoomInfo’s Season 2 of its ZI Labs Podcast as the opening guest alongside ZoomInfo CEO Henry Schuck.

Along with co-host Ben Salzman, Jason and Henry discuss the transformative power of AI within SaaS and the evolving dynamics that are reshaping the landscape of software as a service.

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