Podcast Summary: The Twenty Minute VC (20VC)

Episode: Are Burn Multiples BS in an AI World | Sam Altman Needs $1TRN of Energy | Klarna, Figma, Stubhub Down: Are Public Markets Turning? | FiveTran and DBT: Is the Wave of Consolidation About to Begin?
Host: Harry Stebbings
Guests: Jason Lemkin (SaaStr), Rory O’Driscoll (Scale Venture Partners)
Date: October 2, 2025
Total runtime for content: 00:03:36 – 01:15:07 (timestamps match provided transcript)

Overview

This fast-paced roundtable episode tackles the state of venture capital and technology markets in 2025, centering on the viability of traditional financial metrics—particularly burn multiples—in the context of AI-native startups. The conversation expands to cover current tech public market softness (Figma, Klarna, StubHub), the extraordinary capital and energy requirements of AI leaders like OpenAI, strategic consolidation moves (FiveTran & DBT), and the shifting risks in both venture and private equity. Loaded with seasoned investor experience and healthy skepticism, the episode is essential listening for VCs, founders, and anyone tracking the next frontiers of tech funding.

Key Themes & Discussion Points

1. Burn Multiples in the AI Age

Timestamps: 03:39–13:44

What Are Burn Multiples and Why Do They Matter?

• Jason Lemkin outlines the classic formula: how many dollars of revenue (ARR) does each dollar of burn buy you? Noting the historic importance of the metric, he points out that in SaaS’s heyday, this was generally a straight comparison. However, in 2025, AI-native companies have exceptionally negative free cash flow margins but also unprecedented revenue growth—making their burn multiples look efficient by traditional models.
  • “AI native companies...growing so quickly, under 100 million ARR. Have terrible free cash flow margins. Minus 126%. But...the burn multiples are much lower. They’re actually capital efficient because they’re growing so goddamn quickly.” (05:00, Jason Lemkin)

The Flaws and Limitations of Burn Multiples

• Harry Stebbings and Rory O’Driscoll dissect the “beautiful lie” within burn multiples—highlighting how the model can fail if you blindly compare different business models. Stickiness, churn, capex, and gross margin all introduce noise. Burn multiple as a valuation shortcut, once nearly algorithmic in SaaS, is now fraught.
  • “All ratios are wrong, but some ratios are, at times, useful...If you forget [the implied assumptions] and just focus on burn multiple, you’re going to blow up.” (06:36, Harry Stebbings)
  • “As long as the multiple is high enough, that’s where the leverage is, right? ...The burn multiple just makes the whole thing on afterburners or steroids, doesn’t it?” (11:25, Jason Lemkin)

Burn Multiple vs. Cash-in-Bank

• Good burn multiple is theoretically fundable, but at street level, cash on hand trumps ratios. Many founders focus on the number, “but you still could be out of cash on Friday” (12:33, Harry Stebbings).
• “You could have a great burn multiple and you still could be out of cash on Friday. I need to know more.” (13:06, Harry Stebbings)

2. Founder Reality: The Binary "Haves and Have Nots"

Timestamps: 13:44–19:57

• Both Lemkin and O’Driscoll observe that even with “good” numbers, many founders are finding the VC window cold. The market is less interested in anything non-breakout, non-AI, regardless of growth rates. Lemkin warns founders to take a reasonable round while they can—even if price isn’t perfect:

  • “Take that deal now...Too many folks are saying ‘you’re triple, triple, double, double or better, you’re golden. Don’t worry, kids.’ And I think that’s terrible advice in 2025.” (17:14, Jason Lemkin)

• Stebbings adds: “If you’re right about your business, you’ll be right in the end. But you should operate for the next couple years as if cash is pretty damn tight and scarce.” (19:10, Harry Stebbings)

3. The AI “Label”: Everyone Is AI Now

Timestamps: 19:57–21:21

• Lemkin points out the arms race to brand as “AI-native”: “94% of public software companies call themselves AI companies and the majority mention their AI agents...We're leaving the day where there are two types of companies.”
• “Even if you’re not an AI company, you are.” (20:06, Jason Lemkin)

4. Kingmaker Risk and Mimetic Herding

Timestamps: 21:21–26:40

• O’Driscoll notes the extreme avoidance among investors to fund "number two and number three" players versus the "kingmaker," more so than in previous cycles.
• “Investors are not willing to fund anything if it touches a kingmaker or is in close proximity.” (20:33, Rory O'Driscoll)
• Lemkin: “If you’re not number one, don’t spend like you’re number one.” (24:51, Jason Lemkin)

5. Market Madness & AI-Driven Valuation Surges

Timestamps: 26:40–34:47

Are We at “Peak Madness”?

• Fears of valuation bubbles: $25m ARR companies at $5B valuations, $10B for companies with “nothing.”
  • “Are we just so fucking peak that we’ve got 25 million ARR companies being valued at 5 billion, 10 billion being valued at 30 billion...Are we going to look back and go what morons?” (27:03, Rory O’Driscoll)

Possible Futures

• Either a true productivity boom and revenue transfer justifies this, “or you’re going to have a readjustment period that’s going to make your head hurt...” (27:24, Harry Stebbings)
• Lemkin, somewhat optimistically: “It feels almost risk free again, like it did in 2021.” (29:34, Jason Lemkin)

6. Public Markets Reality Check

Timestamps: 34:47–36:51

• Klarna, Figma, StubHub: Public market performance is sobering, with many high-fliers down significantly from IPO highs.
• “No surprises here. It turns out stocks that open 250% above their IPO pricing probably will go down from there.” (32:09, Harry Stebbings)
• Lemkin: “The bigger issue is...the markets are fairly generous today in ascribing relatively generous multiples to growth that seems fairly modest based on historical standards.” (32:16, Jason Lemkin)

7. Mega-Takeovers & Private Equity (EA’s $55B LBO)

Timestamps: 36:51–37:36

• Conversation on EA’s record buyout: record leverage, unusual for tech, but “smart money at the helm.”
• “It’s the largest LBO in history...But I gotta say, Silver Lake...they’ve been astonishingly smart.” (36:51, Harry Stebbings)

8. The Insatiable Energy Appetite of AI

Timestamps: 37:36–46:40

• OpenAI’s “need” for $1 trillion in energy Capex stuns the hosts.
• Lemkin’s metaphor: “Half our cities in the United States may all be just these massive stargates [data centers] with no humans.” (41:29, Jason Lemkin)
• Stebbings highlights a key uncertainty: “The technology says it’s going to be exponential. I think the economics will grab hold of it...The rate of adoption forecast...will, in retrospect, prove to be too optimistic.” (41:29, Harry Stebbings)
• Lemkin: “I think Sam will figure out fusion and the trivial things on the way to get there. But Jesus Christ, half our cities...may all be just these massive stargates with no humans.” (41:29, Jason Lemkin)

9. Meta, OpenAI & The Right to Re-Roll

Timestamps: 46:40–49:54

• Contrasting CEO approaches—faith in Zuck wavers as Meta’s AI strategy appears “desperate” versus the focused, visionary clarity from Sam Altman.
• “He’d rather burn the 20 billion in operating income and fail than become irrelevant...That was Altman level clarity, but maybe not in the way I wanted to hear it.” (48:28, Jason Lemkin)
• Stebbings emphasizes: “When you’re successful, you earn the right to roll again...but it doesn’t mean you were right.” (48:48, Harry Stebbings)

10. Commerce & AI Platform Experiments

Timestamps: 50:49–53:44

• New “buy in ChatGPT” commerce features: Seen as an experiment, not a proven revenue model at scale.
• “If you’re not actually stemming the tide at the billion dollar level, you may not even matter here.” (52:18, Harry Stebbings)

11. B2B SaaS Consolidation: FiveTran & DBT

Timestamps: 53:44–59:55

• Discussion of the FiveTran–DBT talks: Consolidation is inevitable with 700+ unicorns and a slow IPO window.
• Ownership dilution is emotionally hard for VCs but practically necessary: “There’s no point hanging onto a dream that’s not going to happen when you can get a reality that is.” (57:39, Harry Stebbings)

12. Private Equity, Software, & AI Displacement Risks

Timestamps: 59:59–66:26

• Traditional PE SaaS rollup strategies look increasingly risky as core software products are rapidly disrupted by AI, and seat-based models face fundamental shrinkage.
• “Products didn’t change from about 2008 until 2023. They’re the same products...Could you imagine today waiting four years to launch your AI co-pilot? You’re dead in the water.” (63:04, Jason Lemkin)
• “This change of not needing as many seats...makes the PE model worse and our jobs harder.” (65:03, Jason Lemkin)

13. Founder Advice: Culture, Politics, and Duty

Timestamps: 67:28–73:55

• Should founders be apolitical for the good of the company? Hosts agree companies should mostly stay out of culture wars, though personal expression can’t (or maybe shouldn’t) be fully squashed.
• Lemkin offers practical social media advice: occasionally, a trusted peer will urge a founder/CEO to tone it down, with mixed results.
• “Nine out of ten of the executives are fine with [letting employees go]...they just don’t care.” (73:23, Jason Lemkin)
• “The attention economy is also more fickle than ever...the rear view mirror, it vanishes so quickly.” (73:31, Rory O’Driscoll)

Notable Quotes

• “All ratios are wrong, but some ratios are useful. Burn multiple is a very useful ratio, but...if you forget [the assumptions]...you’re going to blow up.” (06:36, Harry Stebbings)
• "Take that deal now...I hear too many folks saying ‘you’re triple, triple, double, double or better, you’re golden. Don’t worry, kids.’...Terrible advice in 2025.” (17:14, Jason Lemkin)
• “94% of public software companies call themselves AI companies.” (20:06, Jason Lemkin)
• "Are we just so fucking peak that we’ve got 25 million ARR companies being valued at 5 billion, 10 billion being valued at 30 billion...Are we going to look back and go what morons?” (27:03, Rory O’Driscoll)
• “Half our cities in the United States may all be just these massive Stargates with no humans.” (41:29, Jason Lemkin)
• “Products didn’t change from about 2008 until 2023...Now, if you wait four years to launch your AI co-pilot, you’re dead in the water.” (63:04, Jason Lemkin)
• "The attention economy is...more fickle than ever...the rear view mirror, it vanishes so quickly.” (73:31, Rory O’Driscoll)

Timestamps for Major Segments

| Topic | Start | End | |-----------------------------------------------|--------|--------| | Burn Multiples Reconsidered | 03:39 | 13:44 | | Fundraising Realities: Haves and Have Nots | 13:44 | 19:57 | | AI Label & Kingmakers | 19:57 | 26:40 | | Market Madness & AI Bubble | 26:40 | 34:47 | | Public Markets, IPOs, Klarna, Figma, StubHub | 34:47 | 36:51 | | EA LBO & PE’s New World | 36:51 | 37:36 | | OpenAI’s Energy Needs & Scale | 37:36 | 46:40 | | Meta/CEO Dynamic: Bet the Farm? | 46:40 | 49:54 | | AI Commerce Experimentation | 50:49 | 53:44 | | FiveTran–DBT: Unicorn Consolidation | 53:44 | 59:55 | | Private Equity: PE Model Disrupted by AI | 59:59 | 66:26 | | Founders: Politics, Culture Wars, Duty | 67:28 | 73:55 |

Conclusion

This episode paints a vivid, sometimes troubling picture of the state of venture capital, software, and AI in 2025. The calculus for investment and growth has changed but remains uncertain—burn multiples are less trustworthy guides, risk from disruption (especially via AI) is higher, and capital is increasingly concentrated in perceived AI winners. Founders are urged to focus on cash, accept the new fundraising reality, and not over-optimize for valuation in a riskier, more mimetic market. The path forward is blurry, but the conversation arms listeners with a sharper sense of the risks and realities at play.