C. Alex Estevez

SF VC Takeaway #2: Pricing expectations, performance bars, and what’s actually getting funded. One theme that came up repeatedly in SF was how far pricing expectations and performance bars have shifted, even compared to just a few years ago. A few things investors kept anchoring to: 1️⃣ Median Series A valuations are higher than their 2021 peaks, but fewer of them are getting done. 2️⃣ Capital is being concentrated into fewer and fewer companies (and lots of capital!) 3️⃣ “Good” progress is no longer enough and the bar for standout performance has moved in an AI-native world So what does “top performance” mean right now? One investor told me that top quartile seed companies in their portfolio are going from $0 to $2M in ARR in <12 months. Outside of pure traction numbers, a few other themes that came up to describe "top performance": 📈 Explosive early revenue ramps (or a very credible path to them) 📊 Strong velocity and momentum for 2 quarters in a row, even if the baseline is small. 🚀 Clear signals of category leadership, not just product-market fit. Sometimes shown by either domain expertise, speed of product optimization, or by lack of competition in the category. This creates a counterintuitive dynamic where it can be easier to fund a company with strong pedigrees in a hot space and no traction yet than a company that went from 0 to $1M ARR at what used to be considered a rapid pace. Pricing today is driven by trajectories, not moments in time. We used to say investors invest in lines not points; I think that's more true than ever now because crossing certain milestones doesn't carry as much influence as it once did. Finally, investors still say that valuation matters, but many of them are acting differently. Pace and belief in category-defining companies really sets the price; while slower growth gets scrutinized rather than discounted. One silver lining in the camp of durable growth: Series A rounds are happening so fast that many companies don’t yet have meaningful history of retention data. Large bets are being made on velocity before the durability is proven. Several investors told me the same thing: we may soon swing back to a market where retention, not growth, becomes the defining metric. Let's hope so. I'll share my third SF VC takeaway tomorrow!

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Transactions are decisions under uncertainty. Quality of Earnings reduces that uncertainty. We’ve supported QoE engagements for both buy-side and sell-side clients across companies generating $500K to $80M+ in revenue. One consistent takeaway: Adjusted EBITDA is rarely a single fixed answer. It’s a range.  A framework.  A series of judgments that require accounting depth and forward-looking thinking. Our process focuses on: • Multiple EBITDA case scenarios • Working capital sustainability • Margin durability • Post-transaction tax considerations • Clear articulation of risks and assumptions Whether you’re private equity, a strategic acquirer, a lender, or a business owner preparing for exit — clarity drives better decisions. And better decisions drive better outcomes. #TransactionAdvisory #QualityOfEarnings #M&A #StrategicFinance #PrivateEquity

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Two weeks ago on Swimming with Allocators, we sat down with David Clark, CIO at VenCap, to talk about what decades of venture data can teach allocators. One takeaway that stood out: discounts don’t matter as much as people think in venture secondaries. Because venture is such a power-law asset class, outcomes are driven by exposure to a few massive winners. Whether a stake is bought at a small discount, or even a premium, often matters far less than the quality of the underlying company and its upside. Great conversation on venture returns, manager selection, and the nuances of how allocators should think about secondary investments. 👇 Link in the comments.

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The SaaS Consolidation Playbook Is Rewriting Software M&A in 2025 The 2025 Story in Numbers: -Q2 2025: 637 SaaS M&A transactions - the highest quarterly total on record. -Q3 2025: 746 SaaS deals - up 26% YoY, putting 2025 on track to cross 2,500+ transactions. -Vertical SaaS now accounts for 54% of total SaaS M&A, up from 43% last year. -58% of all SaaS acquisitions in Q3 involved PE or sponsor-backed buyers. This indicates that focus should be on building platforms. The real question: Are you driving the consolidation, or being consolidated? #SaaSM&A #VerticalSaaS #InvestmentBanking #PrivateEquity #VentureCapital #Software #TechConsolidation #PlatformBuilding #DealSourcing #CorporateFinance #Tracxn

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