cloudedjudgement.substack.com · 2025-05-23 · 377d

Clouded Judgement: AI Grows the Size of the Prize

The article argues that venture fund returns can scale with fund sizes if the exit market continues growing exponentially, driven by AI and platform consolidation trends. It analyzes current VC exit values, showing top 1% exits have grown from $1.4B (2005-2009) to $10.2B (2020-2024), with potential to reach $50-60B in 10 years. The piece also discusses recent Treasury yield increases driven by fiscal concerns, inflation expectations, and weak bond auction demand, followed by a SaaS valuation benchmark summary.

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Metrics in this report

10Y Treasury Yield

4.6percent

U.S. Government debt, as of May 2025

CAC Payback Period

41months

median

Public SaaS companies

EV/NTM Revenue Multiple

5.6x

median

All public SaaS companies

EV/NTM Revenue Multiple

22.4x

median

Top 10 public SaaS companies by market cap

EV/NTM Revenue Multiple (High Growth >25%)

19.8x

median

Public SaaS companies, high growth bucket

EV/NTM Revenue Multiple (Low Growth <15%)

4.0x

median

Public SaaS companies, low growth bucket

EV/NTM Revenue Multiple (Mid Growth 15-25%)

9.4x

median

Public SaaS companies, mid-growth bucket

FCF Margin

17percent

median

Public SaaS companies

G&A Expense as % of Revenue

16percent

median

Public SaaS companies

Gross Margin

76percent

median

Public SaaS companies

LTM Revenue Growth Rate

15percent

median

Public SaaS companies

NRR

108percent

median

Public SaaS companies

NTM Revenue Growth Rate

11percent

median

Public SaaS companies

Operating Margin

-4percent

median

Public SaaS companies

R&D Expense as % of Revenue

24percent

median

Public SaaS companies

S&M Expense as % of Revenue

38percent

median

Public SaaS companies