Akash Bajwa - AI + Software Investing in 2024
01/25/24 • 46 min
Our Guest: Akash Bajwa is an investor in fintech and B2B SaaS at Earlybird Venture Capital, a European venture capital firm with 2 billion Euros in assets under management (AUM).
Episode Topics:
- Akash and Earlybird’s investment criteria
- Areas in early-stage native AI that Akash and Earlybird are excited about
- Akash discusses the unique skill sets needed for native AI founders.
- Is building an AI-focused business similar to the well-established SaaS playbook?
- Akash’s views on investor returns if gross margins decrease to 50% in AI-driven software.
- How are software pricing models going to evolve in an AI world?
- Methods for assessing a founder's execution ability during early-stage fundraising.
- Akash’s views on vertical software and implications of AI lowering barriers to software creation.
- Akash's view on AI's capital intensity + its implications of this for investors.
Resources:
https://substack.com/@akashbajwa
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
Our Guest: Akash Bajwa is an investor in fintech and B2B SaaS at Earlybird Venture Capital, a European venture capital firm with 2 billion Euros in assets under management (AUM).
Episode Topics:
- Akash and Earlybird’s investment criteria
- Areas in early-stage native AI that Akash and Earlybird are excited about
- Akash discusses the unique skill sets needed for native AI founders.
- Is building an AI-focused business similar to the well-established SaaS playbook?
- Akash’s views on investor returns if gross margins decrease to 50% in AI-driven software.
- How are software pricing models going to evolve in an AI world?
- Methods for assessing a founder's execution ability during early-stage fundraising.
- Akash’s views on vertical software and implications of AI lowering barriers to software creation.
- Akash's view on AI's capital intensity + its implications of this for investors.
Resources:
https://substack.com/@akashbajwa
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
Previous Episode
Nick Tippmann - Vertical SaaS Operator -> Investor
Our Guest: Nick Tippman, former Chief Marketing Officer at Greenlight Guru, a category-leading provider of regulatory software for the MedTech vertical. He is now an angel investor, investing in exceptional Vertical/SMB SaaS, AI, Fintech, and B2B Marketplace founders and companies at the pre-seed/seed stage alongside other leading investors.
Episode Topics:
- Nick’s current investment criteria for a vertical SaaS company.
- Nick’s minimum TAM + how he looks at take rates.
- How important are fintech and payment opportunities in evaluating vertical software markets?
- How embedded APIs - like embedding payroll into your app - are changing opportunity sets for seed-stage vertical SaaS
- What constitutes founder market fit?
- Nick’s advice on effectively demonstrating founder-market fit in a pitch deck.
- Nick’s views on the increased venture capital flow into niche vertical markets.
- The impact of Generative AI in breaking through to categories that have been resistant to digital transformation
- Is AI an opportunity, neutral, or a threat?
- Eli Dukes Question: What's the primary challenge in vertical SaaS: Is it GTM or product? Why?
- How to assess founders and their teams' product management skills in this changing landscape?
- Understanding operator funds + Nick’s perspective as a Limited Partner (LP) in 11 funds.
- Nick’s recommendations and tactical advice for potential emerging managers.
Resources:
Eli Dukes Vertical SaaS Substack - https://verticalized.co/
Nick’s Google Doc - “Ultimate List of 37+ VC & PE Firm Theses & Market Updates on Vertical SaaS”
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
Next Episode
Dave Yuan - Vertical SaaS Investing Playbook
Our Guest: Dave Yuan is the Founder of Tidemark, a growth equity firm focused on helping companies scale. With over 20 years of experience, Dave has invested in twelve companies that have gone public, eight that have been acquired.
Episode Topics:
- Dave and Tidemark’s investment criteria.
- Ideal qualities for vSaaS founders.
- Dave's viewpoints on overspending in R&D, product risk, and product development in vertical SaaS.
- What does good multi-product sequencing look like?
- Is AI an opportunity, neutral, or a threat in vertical SaaS?
- The supply/demand imbalance between private investors and scaled vertical SaaS companies.
- A framework for determining when to raise more capital or pursue a capital-efficient path.
- What SaaS company does Dave admire the most?
- Dave’s learnings from starting a new fund.
Resources:
Tidemark Vertical SaaS Knowledge Project: https://www.tidemarkcap.com/vskp
Tidemark 2024 Vertical SaaS Benchmark Survey: https://www.surveymonkey.com/r/5CFVSHQ
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
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