Note: SaaSForward is a fortnightly in-depth analysis of global SaaS Trends.
The rise of solo investor: 00:12
Angels exit as valuations soar: 1:51
More SaaS acquisitions: Pipe partners with MicroAcquire: 2:55
Founderpath growth: More funding tools for bootstrapped Cos: 3:49
What these trends mean for SaaS founders: 4:38
The punchline: “Capital is abundant but real value will be created by those who solve for the scarce part of the value chain”
These developments are significant as this all points to one big trend, which is the abundance of capital. Now call it the COVID effect where $1.9 trillion was poured into the economy by the Fed and some of this capital is going into the hands of these investors who are trying to find better returns. Or that a lot of public companies are creating more rich executives who are now trying to make their hand in investment. There seems to be a lot of capital. This is why you're seeing that a lot of independent people are able to get more funds for their own, like solo GPs, or you're seeing that a lot of non-dilutive capital is being available.
This is great news for founders because they can get access to capital much, much easier. But what it also means is that when some part in a value chain becomes abundant, something else becomes scarce. And this is what we are seeing from an Upekkha perspective - that going from zero to one is still one of the hardest things for any startup to achieve. But the amount of capital that is available in the ecosystem is just mind boggling. Going from zero to one is where it is scarce.
That is where the bottleneck is and people who get a lot more value are those who are able to solve for the scarce part of the value chain, as opposed to focusing on the abundance. So, there will be a lot of competition in the abundant space, but real value will be created by those who are able to solve for the scarce part of the value chain.