a16z's $20BN Fund & Founders Fund's $4.6BN & Why Josh Kushner Has Mastered the Game

Jason Lemkin and Rory O’Driscoll on why SaaS investing is dead, a16z’s $20B fund logic, and Thrive Capital’s Monopoly strategy.

• Rory estimates ~$2 trillion in privately held venture assets, with much of it mature slow-growth SaaS with no clear exit path and PE showing little interest.
• PE firms pass on most VC-backed SaaS because venture funds horizontal markets with no pricing power — PE loves obscure vertical software with 40% market share they can strip and reprice.
• Product-market fit now can evaporate in five weeks; AI companies have lost and regained PMF two or three times within two years, versus the five-year window founders could rely on before.
• Jason argues a16z’s $20B fund math works if you can put $3B into every Databricks-tier deal — firm sees 100% of S-tier deals and can model deployment on a spreadsheet.
• Thrive’s strategy: buy the best asset on every sector block (Stripe for fintech, OpenAI for AI, top infra) then wait — lower multiples but higher absolute returns in a fraction of the time.
• Acquirers are now aggressively structuring around VC liquidation preferences via aqua-hires and side deals, with corp dev teams openly targeting zero payout to VCs in nine-figure deals.
• 93% of 2,000 B2B salespeople surveyed by Jason admitted lying to win deals — cited as context for why the Rippling/Deel industrial espionage allegations are unsurprising in direction if not degree.
• Staying private is now cheaper for companies than going public: private mutual fund investors net ~10% after 2-and-20 VC fees vs. ~14.3% net at 70bps via public funds on the same asset — described as a public policy failure.

2025-04-17 · Watch on YouTube