An effective VC isn't just an unbridled optimist. They are a 'cynical optimist' who balances belief in the future with realism about current challenges. Their role is to steady a founder's emotions—tempering excitement in good times and providing uplift in bad times, rather than simply cheerleading.
The established SaaS growth playbook, where achieving milestones like $1M to $4M in ARR guaranteed follow-on funding, is no longer relevant. Hyper-growth AI companies have dramatically raised the bar for what is considered 'venture fundable,' forcing SaaS founders to consider alternative financing or reaching profitability much earlier.
Startups founded in the 2018-2020 era face a significant risk of becoming obsolete before they can exit. A difficult public market, combined with a rising bar for IPOs driven by new technologies like AI, means many of these otherwise solid companies may struggle to find a viable liquidity path.
An 'ugly truth' of venture is that LPs often stay with large, multi-partner funds, despite their challenges, because it's the only way to access the handful of truly great, outperforming investors within them. LPs must tolerate the broader fund structure and its drawbacks to gain exposure to this elite talent.