So as we’ve discussed recently on SaaStr, at the moment Venture Capital is in a bifurcated world. Big AI Growth rounds are absorbing enormous amounts of capital, a record amount. But ordinary B2B VC deals are down.

We saw that across 2024 per EY and other data here.

And per Sapphire Ventures, 2025 is starting off similarly.

Overall deal count in B2B VC (and VC overall) is down again in January:

• Down -8% from December
• Down -64% (!) year-over-year from the start of 2025

This look at VC deals overall since 2019 show the trend even more viscerally.  Deals peaked in mid-2021 … and have simply fallen since then. Even as mega growth rounds into AI Unicorns has kept the dollar volume itself up.

And that’s at the same time as the overall number of start-ups keeps growing.

Look, tech is overall on fire today. The markets remain up, HubSpot and other leaders are at all-time highs or close, and every YC batch is as full as ever. AI is leading to an explosion in innovation and some of the fastest growth we’ve ever seen in B2B.

Hey SaaStr Fans,

Time is running out!

Ticket prices for SaaStr Annual 2025 go up on February 28, and this is your last chance to save $200 on your pass.

Join 12,500+ SaaS leaders, VCs, and founders for 3 days of tactical content, hands-on mentorship, and networking that will help you scale to $100M ARR and beyond—with less stress and more success.

• 10,000+ SaaS + AI leaders.
• Legendary speakers from Snowflake, HubSpot, OpenAI, Canva, and more.
• Unmatched networking, fundraising, and deal-making.
• New AI Demo & Pitch Stage—your chance to win up to $5M in funding!

Don’t miss your chance to lock in your tickets before rates increase!

So few having been doing M&A and acquiring start-ups for longer than Steve Mitzenmacher.  He’s been heading M&A since early days at Yahoo!, the NetApp, then Rackspace, and then mostly recently at Own Backup.  And then Own was acquired itself … for $1.9 Billion!

So Steve went from acquirer .. to the acquired.

He joined SaaStr Workshop Wednesday with me and I took the opportunity to ask some of the questions about M&A I still have after many deals myself.

Up Next: Wednesday, February 26th @ 10AM

Topic: A 10 Point Checklist To Use When You Sell Your Company

Speaker: David Frankel, Managing Partner, Founder Collective

Workshop Wednesdays is our weekly series where we’ll be bringing some of the best SaaStr speakers to you LIVE, every Wednesday. 

Each workshop will be hosted in a live, interactive 30-minute format at 10am Pacific each and every Wednesday. This workshop will be 100% LIVE, not pre-recorded, and will be hosted in an, interactive 30-minute format, including Q&A.

So one of the weirdest calls you’ll get as a founder is when a BigCo out of the blue wants to talk about acquiring you. Literally out of nowhere.

Not someone you’ve known well for years. But literally a BigCo you have barely even talked to. Or just know a bit in passing. Or sometimes, have never even talked to at all.

• Sometimes that call is for real.  They want to do something, now.
• Sometimes, it’s the start of something.   That takes years to in the end happen.
• But if it’s truly out of left field, it’s often them doing diligence.

Should they enter the market themselves? Or — often, they are actually thinking of buying your competitor.  It’s a weird conversation when some BigCo randomly starts digging deep in your business, talking about “Build, Buy or Partner.”

That’s the phrase you’ll hear a lot. “Build, Buy or Partner.”  It’s a classic framework that M&A / corporate development professionals (among others) use.  And they sort of can’t help but use it as their opener for many discussions.

Now if you literally have zero relationship with this Big Tech Co, your spider sense may go up. This doesn’t make sense. But there’s always a logic.

Here’s my only advice: founders often hunker down when they get these calls. They don’t want to share. They don’t want to invest any time. Because their gut is, it’s a weird fishing expedition going nowhere. And it may be.

First, being a bit naive in fundraising is fine, overall.  Sometimes, endearing.

Being too polished, especially as a first-time VC, can almost be a negative for seed and early stage investors.  (Although it starts to be expected by later stage VCs).

But a few things that make early-stage founders look less fundable in my experience:

• Mocking the competition, especially successful competition. The best founders do win, but they also profoundly respect the competition — and understand and learn from them.
• Hiding core issues during fundraising. Hiding that they don’t really have a CTO, or that they’ve already raised a ton of money, or other big issues. Get them out there, at least during fundraising.
• Thinking they can Go Big with just a tiny team or only a tiny amount of funding — unless there are exceptions reasons why. Sometimes this is possible, but it’s rare. Yes, maybe there will be a wave of 1 person unicorns.  But if that’s you, prove it. Make the numbers really work.  It’s probably going to have to be a super-viral, freemium service then.
• Arrogance.  At least, too much. This just never plays well. I love the SaaStr Annual talk from the co-CEO of Atlassian below saying he still has Imposter Syndrome. Confidence is important.  Maybe even a lot of confidence if the numbers back it up.  But be careful crossing the line to arrogant and/or disrespectful.
• Generic outreach. The best founders reach out with amazing emails. Not generic emails that could go to anyone.  Personlize, personalize, personalize,  For real.
• Not knowing the VC you are pitching. This is just way too common.  A version of the prior point. Read their bio. Research the fund. It doesn’t take that long, folks. This leads to almost instant dequalification.
• Anyone but CEO doing outreach. Many VCs say this, for a reason.  It’s very true.

We’ve talked a ton about How to Hire a Great VP of Sales on SaaStr, but I wanted to highlight a few VP of Sales / CRO  “personas” that I rarely, if ever, see work out.  Because again and again, many of you will hire this VP of Sales / CRO.  So many of you will. Especially — when things are going well.

Here are the types of sales leaders that just never work out. And to be clear — though I said “never”, there are exceptions. Sort of. But make sure that if you do make an exception, you’re very aware of why.

Persona #1:  Has Done Another Job Besides Be a VP of Sales / CRO for > 1 Year

Now let me be clear — this is very different from someone that’s stepped out of the workforce for a bit to take care of family, etc.  That can work well for sure.  There are many gems there; go hunt those candidates.  No, I’m talking about something different.  Someone that was a good or decent VP of Sales, often at a well-known startup or company, that just … didn’t want to do it anymore. They’d had enough.  So they went off and became an influencer, or a surfboard maker, or a small business owner, or whatever.  Sales is hard.  VP of Sales is even harder. It makes sense to not always do it forever.

But I see these ex-VPs of Sales sometimes get lured back by the glamor of a hot startup, or just the need for a bigger paycheck.  Founders get attracted to their strong LinkedIn … and ignore the fact they quit sales for too long.  You might love their background, their LinkedIn, their knowledge base.  It’s just that it’s so, so hard to get back in the sales game, especially at a VP level and above.  I’ve literally never seen a single one of these candidates work out at VP of Sales / CRO.  And rarely below that.

Persona #2: Fails Up Well

For the most part, only those of you that are well-funded will make this error, but many of you that are well-funded will.  There are VPs of Sales / CROs and CMOs that are great at failing up.  Generally, VCs that don’t know sales (or marketing) love them.  They are smooth talkers.  And they often were lucky enough to be part of a big exit before they had to scale themselves for real.  Really do extra due diligence on anyone with a perfect resume at too many hot startups that didn’t stay that long, or were only there in the “lucky” years.  They don’t really know how to do it, and in many cases, even want to do it.  Often, they just want the glamor of the role.  Be careful also with retained search recruiters that typically only work with startups much later-stage than you.  They get you a lot of these types of candidates.

This edition of the SaaStr Weekly is sponsored in part by Prismatic

Pre-built connectors get you most of the way there... but what about the gaps? That’s where custom connectors come in. Join Prismatic on 3/19, to learn how to add essential connectors to your lineup.

The Market Reality: Integration is the New Must-Have.

Want to know what’s keeping your prospects from signing? It’s probably not your core product anymore. According to recent data, the average company now juggles 112+ SaaS applications. More critically, G2’s latest research shows integrations have become the #1 consideration for B2B SaaS buyers. This isn’t just a nice-to-have – it’s become table stakes.

Anthony Owens, Chief Revenue Officer, Prismatic

Anthony Owens brings heavyweight revenue leadership experience to Prismatic as CRO. Known for building and scaling high-performing sales organizations, he’s made integration capabilities a cornerstone of successful enterprise sales motions. Having witnessed the evolution of SaaS sales from product-first to ecosystem-first approaches, Owens has developed and implemented frameworks that significantly reduce sales cycles while improving close rates through integration-focused selling.

Libby Stangle, Vice President of Customer Success, Prismatic

Libby Stangle leads Prismatic’s customer success organization, where she’s pioneered new approaches to seamless sales-to-CS handoffs. With extensive experience in customer success leadership, she’s transformed traditional CS models into continuous-flow systems that maximize integration adoption and customer value realization. Under her leadership, teams have achieved significant improvements in customer health scores and retention rates by making integration success a central pillar of the customer journey.

The #1 key: design a template that is simple enough you can send it out on the first of the month, every month.

That way you will actually get it done.

Beyond that, in SaaS, I love a short update that has:

• Revenue % growth this month, and for last 3 months averaged
• MRR/ARR
• Paying Customers, % growth
• Net Churn, change
• NPS, change
• Burn rate, change

Here’s an early (and impressive) example the co-founder of Algolia (now at hundreds of millions in ARR) shared a while back.

And ideally, share the average of the last 3–4 months for each, too for core metrics. It tends to be very predictive — and smooth over some variability. 

It’s complicated.

Having a “good exit” is a special thing. You will make some money, perhaps even life-changing money. It will prove you can do it. It will Level You Up in the hierarchy of founders. You will have beaten the odds, and be a “winner”.

At least by any normal standards.

But as time goes by … you may see it all differently:

• You may see you only get so many at-bats. At least most of us only have so many. So many chances to build something, to do something great, to lead and be part of a great team. 
• You’ll see that when you sell, you are monetizing an at-bat … but also giving it up.
• You may look back and see it as the right, great opportunity. Especially if the market changes on you. If you lose your competitive position. If you can’t raise enough capital. Those are good reasons to sell, for sure. If you sell early, you may even thank your lucky stars that the sale bailed you out.

© SaaStr 2025

644 Emerson St. Suite 200, Palo Alto, CA, 94301

If you'd like to stop receiving the SaaStr Daily, click here