Is the Current Venture Cycle More Like 2019 or 2021?

Ramtin Naimi says the current venture cycle could still be 2019 rather than 2021, even where the behavior rhymes with the last boom. In 2021 the companies were not that interesting. SaaS businesses growing 5x, then 3x, 3x, and 2x were called best in class. A company with $8 million of SaaS revenue and a very constrained TAM could raise at a billion-dollar valuation, and a seven-year path to $100 million of annual recurring revenue was the exciting case. Round structure, deal volume, and the pressure to keep up with the market all look similar. There was a six-month window in 2021 when firms were ripping checks, and a lot of the investors from that window look back and wonder what they were thinking. He is not saying the market has reached that point.

Public-market investors are again pushing hard into venture. Term sheets are arriving very fast and then getting pulled, reneged, or renegotiated. In the last six, seven, or eight weeks he has seen more deals renegotiated after an offer than at any time since 2021. The sharp difference is enthusiasm. In 2021 people were not backing companies they expected to become category-defining, at global scale, within 18 to 24 months. He is using products from the portfolio himself, and family members who are not early adopters are using them daily. Product-market fit is showing up faster than he has seen.