Solid software businesses with Rule of 40 or 60 or 80 growth rates + profits are not interesting to VCs right now.
SaaS is dead to VCs, especially those with billion-dollar funds that make “Go Big or Go Home” 100X bet. It’s all about AI right now.
Sorry, VC-funded SaaS founders from 2020-23. You’re stuck!
But SaaS is alive and well outside this crazy VC-fueled corner of the software business.
AI is helping serious practical SaaS founders with real businesses create more customer value. And do more with less in their businesses, of course.
Private equity and growth equity investors are still paying 5-10X revenue multiples for high-quality, durable, and efficient software businesses.
Those are exciting multiples for founders, but only if you didn’t raise VC funding.
Deepak Sindwani is Founding Partner at Wavecrest Growth Partners, an active growth equity firm backing bootstrapped and lightly funded SaaS founders.
They work with practical founders who’ve built profitable businesses to $5–$20M ARR and want help growing without VC pressure or losing control.
Wavecrest invests in vertical SaaS companies growing 30–60% annually, typically profitable or breakeven. They help founders scale sales, pricing, analytics, and leadership teams while remaining capital-efficient.
Investments are usually $10–$30M total, with founders often taking some liquidity while continuing to lead.
Even with the excitement around AI-first companies from VCs, Deepak sees efficient growth equity in practical vertical SaaS as a great investment and a big opportunity for founders.
“We don’t think B2B SaaS is dead. It may create great headlines to say, AI eats software. We think software plus AI is the right approach. Software, AI, plus data. So they’re harvesting and creating that data moat that is going to help make them defensible.
“Then, using the AI tools, why not use the AI tools to provide more automation for customers? That’s what we really think AI does: increase the ability to automate the use of their product and to get value.
“Every company that we’re involved with has some AI initiative. How am I changing how I run my business? How am I changing marketing and sales and finance and customer success using AI? Every company is doing something in every function in terms of new tools and tests.”
AI is helping serious practical founders build bigger businesses. It’s not making them irrelevant.
It just makes no sense for founders to consider VC funding if they can’t grow revenues 10X a year and don’t want to bet it all.
Check out this episode with Deepak Sindwani on the Practical Founders Podcast.
