So the first half of 2025 is when VCs, founders and other have to start dealing with the “Lost Generation” in SaaS and B2B. For real, calmly and rationally.

What’s the Lost Generation?

It’s folks at $10m-$300m ARR that just aren’t growing anymore.

< 20% a year.

There’s been so much shock to the system:

2021: everyone grew like a weed

2022: multiples crashed

2023: buying and growth slowed

2024: AI absorbed massive budget.

If growth slowed from 2023-2024, even 2022-2024, folks in some ways got a pass. VCs, executives, and others understood.  No one was happy of course, but everyone sort of understood.

If you were running out of money, then folks had to deal with these issues earlier. But most of The Lost Generation actually often has plenty of cash and runway now. They often cut their way to break even some time ago.  So they were able to defer dealing with a lot of issues beyond getting lean — for a while.

But 2024 was your year to rebuild. To leverage AI and where spend was going — not where it used to be. And 2025 is the year to execute that rebuilding process and get back to real growth. At least, materially more growth than before.

Hey SaaStr Fans,

We're less than 75 days away from 2025 SaaStrAnnual.com and yes, it will be here before you know it!  May 13-15 in SF Bay!!

Yes, there will be 10,000 of the best in SaaS, AI and Cloud there.  And yes, it’s a chance to meet and learn from the best.

But time is precious. 

Here are 10 reasons you should come:

1. Unparalleled Networking Opportunities
2. The Best Speakers In The World
3. Investor Connections and Funding Opportunities — And $500k-$5m AI VC Pitch Stage!!
4. Meet and Find Your Next VP / CXO!
5. Competitive Intelligence and Market Insights and New!! AI Demo Stage
6. Accelerated Learning for Your Entire Team
7. Direct Access to The Best AI / Cloud / SaaS Tools and Services
8. Benchmark Data and Performance Metrics
9. Inspiration and Renewed Perspective
10. Immediate ROI Through Actionable Strategies

This is arguably too conservative, and may sound awfully abstract to founders at earlier stages … but if I was a founder at a hot start-up growing quickly today, I wouldn’t raise at > a $300m valuation until I was 100% sure I was on the IPO track for real.

That’s $500m ARR growing 50%.

That’s what all the last 5 SaaS IPOs, all the SaaS IPOs since 2021 in fact, were doing at IPO: Rubrik, Klaviyo, ServiceTitan, OneStream and Sailpoint. And that’s what it takes to fuel a $10B+ outcome.

If you are on that track for sure, raise at $1B-$3B valuation. It will work out most likely.

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.

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

We've partnered with Stripe to give you access to the internet economy conference. Stripe Sessions brings together the payments and financial technology community to share ideas that drive progress.

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.

A few years ago, I would have said No. There’s no way a SaaS startup needs a “CRO” or “COO” or other C-level Officers Without a Clear, Single Functional Area to Own Until $40m-50m+ in ARR.

But … like many things … my views have evolved.

Three trends have fueled the rise of hiring COOs and CROs closer to $10m ARR than $50M ARR:

• Faster Growth. If you are growing 40% at $10m in ARR, a COO may be a luxury. If you are growing 150%, it may be a necessity to get help in ASAP to run a material part of the business.
• Specialization. As we’ve all gotten more experienced in SaaS, we’ve specialized more. If your VP of Sales is your closer, you have a VP of Accounts, and a VP of CS … who is going to manage them all? CRO. You want each revenue leader doing what they do best. Not trying to manage departments they have less passion for and/or that distract from their core goals.
• Veterans. We now have a lot, lot more veterans in SaaS than we did 5–10 years ago. A great VP of Sales who took a company from $1m to $50m may want to try CRO now. Similarly, a VP of Product might want to own more as COO. If you get a great veteran that really has passion for a startup, and you are at $5m-$10m+ ARR … maybe carve out a portion of the company for her to run. COO or CRO are two good ways to do this.
• Title Inflation. So many folks that would have been fine being a VP of Sales a few years back just want to be a CRO today.  You can fight this, or you can acquiesce.  Sometimes it’s easier to not fight it.

So Salesforce has now grown into the active granddad of SaaS.  Maybe not growing quite as fast as it once did.  But it’s matured into a true force of nature. Only Microsoft, Oracle and now Salesforce have crossed $40 Billion in enterprise software ARR.

• $40 Billion in ARR
• Growing 9%
• 33% Non-GAAP Operating Margins (19% GAAP)
• Generating $13B of free cash flow a year!!

Perhaps most importantly, Salesforce has leaned deeply into AI … and while the early usage is impressive, so far it hasn’t materially changed growth. So far:

• Since October, closed 5,000 Agentforce deals, including more than 3,000 paid just 90 days after officially launching.
• Salesforce says Agentforce has managed 380,000 conversations, with only 2% escalated to humans and an 84% resolution rate.

So far, at the public company level, it’s the infra players that are seeing the crazy AI growth. Nvidia, Google Cloud, Azure, etc. But how about 2026+?  We’ll see.  As Marc Benioff notes below, Salesforce’s just started. It’s only been selling AgentForce for a few months. He’s incredibly excited and bullish on where it’s going. It’s clearly rejuvenated him. Maybe AI will for all of us.

A few that basically always work in sales … but that so many don’t do actually do:

• Being a product expert. 95% of the sales execs I talk to in software don’t know the product much at all. A huge miss as half the reason you talk to sales is to get your product questions answered.
• Being great at the product demo.  Truly great.  Not being able to demo your product like an expert just leads to a mediocre sales process, at best.
• Mapping out and contacting all the stakeholders. Too many in sales just talk to whomever inbounds. But especially in bigger deals, there are often 3–4 stakeholders you really need to convince.
• Showing up in person. If you show up in person for the bigger deals, and the competition just shows up in Zoom … the odds you win the deal go up. A lot, really.
• Focusing on solving the customer’s problem. Sell second, solve their problem first. If they’ve given you up the time to talk about a problem, there likely is budget to solve it. If you can solve it.
• Followng up regularly. Too many just … don’t. The right time to buy just might be 3, 4, 9 months from today.
• Just doing the darn pilot.  Too many reps don’t want to do pilots because it’s work.  They fight it.  Because you have to basically resell the deal again at the end of the pilot.  But as a start-up, just do them.  They reduce perceived risk.
• Being there as CEO.  It sends a message when the CEO shows up in person. It doesn’t always yield a win.  But it shows the customer / prospect matters.  You can’t be in every deal as CEO.  But be in as many of those that matter as you can be.

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

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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.

Monday.com has been a powerhouse in SaaS, scaling from $10M ARR in 2017 to over $1B — in just eight years (!)

Co-CEO and Co-Founder Eran Zinman recently sat down with SaaStr CEO and Founder Jason Lemkin to share his insights on their journey, including how they’ve leveraged AI, maintained growth, and expanded into multiple product lines.

Here are five AI learnings and 3 non-obvious business takeaways from the discussion.

• SaaStr 790: AI at Scale: 8 Learnings from monday.com Co-Founder and Co-Ceo Eran Zinman and SaaStr CEO and Founder Jason Lemkin

• SaaStr 789: 10 Things No One Tells You About Getting Acquired for $1.5B Steve Mitzenmacher, Former Vice President Corporate Development, Own Company

• SaaStr 788: The Real Data on What it Takes to Go Big and Eventually IPO with Meritech Capital

Listen on Apple Podcast, Spotify or Google Podcasts

Perhaps my biggest mistake as a founder

was seeing 4-5 years as a looong time

When in fact ...

It's really just when things start to get interesting at a start-up,

if you have something

Go upmarket, you scale faster, with less churn.

And if you also stay downmarket too at the same time

and keep serving those small customers well?

Then you end up with a product that is both super powerful.

And with unparalleled ease-of-use.

© SaaStr 2025

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