Show notes
Before today's conversation, Sam, AJ and Asad share a few words in memory of Adam Robinson.
Rajeev Dham, Managing Director at Sapphire Ventures (a $10 billion venture firm), joins Sam Jacobs, AJ Bruno, and Asad Zaman to make sense of the recent tech selloff and what it means for AI investing. Topics include why Rajeev sees a "duration mismatch" as a core challenge, how the funding bar has changed after months of $50 to $100 million decisions made in days, and why AI application companies are growing from $15 to $100 million in revenue even as steady-state gross margins may settle closer to 30%. Plus, advice for pre-AI SaaS companies, why private equity is still frozen, a data company that went from zero to a $900 million run rate, whether the models will eat the harness, what the Anthropic IPO means for everyone else, and whether go-to-market AI can ever be more than a spam cannon.
Key Takeaways:
- The selloff is about timing, not the technology. The AI buildout is expensive, and Wall Street now wants to see it in S&P 500 earnings, not just in Anthropic's run rate. "I'm a believer. I think there's just a duration mismatch," said Rajeev, who compares it to Amazon's AWS buildout rather than the dot-com crash: "I think it could be a 6-month, 9-month period… when this mismatch needs to be reconciled." - AI margins may never look like SaaS, and that can be fine. "I don't know if we're going to have the 78% margin businesses. It could very well be you have a 30% gross margin business," said Rajeev. What matters is gross profit dollars: "if you could charge 30 to 40% of $10,000 per person per year versus $1,000 versus 80% of $1,000, your gross profit dollars are a lot bigger." His bet: "I think ASPs will grow by 10x." - When everything grows fast, growth stops being the signal. "I don't even look at growth rates," said Rajeev. The founder used to be maybe a 30 to 50% weight in a growth-stage decision; "Now it's an 80, 90% weight, even at sometimes a billion of run rate." He looks for founders who rebuilt their product "after the Opus 4.5 moment in December" to keep winning share. - For pre-AI SaaS companies, the advice is to burn the boats. Rajeev told one founder running a cash flow breakeven $300 million business that "whether you grow 24% or 18%, it doesn't matter," and to "hire a COO, a private equity-like COO just to run that business" while the founder builds the AI products and eventually merges the two.
Connect with the Hosts & Guests:
Host: Sam Jacobs, CEO at Pavilion - https://www.linkedin.com/in/samfjacobs/ Host: AJ Bruno, CEO at QuotaPath - https://www.linkedin.com/in/ajbruno3/ Host: Asad Zaman, CEO at STA - https://www.linkedin.com/in/azaman1/ Guest: Rajeev Dham, Managing Director at Sapphire Ventures - https://www.linkedin.com/in/rajeev-dham-79332812/
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Chapters: 00:00 Introducing Rajeev Dham 01:04 In memory of Adam Robinson 05:51 The Great Tech Selloff 10:35 How the Funding Bar Has Changed 12:46 Why AI Apps Grow So Fast 15:47 The 30% Gross Margin Future 21:28 When Does the AI Land Grab End? 24:38 Advice for Pre-AI SaaS Companies 26:53 Why Private Equity Is Still Frozen 35:11 What Gets a VC Excited Now 39:12 The Unfundable $9M to $38M Company 45:17 Founders Who Pivot at Warp Speed 49:43 Will the Models Eat the Harness? 57:50 Anthropic and the New IPO Bar 59:44 Is Go-to-Market AI a Spam Cannon?
Sources & Attribution:
Clip: https://youtu.be/TNq79c8QNlg Clip: https://youtu.be/lgMTA5GU7TE Article: https://www.axios.com/2026/10/26/anthropic-ipo
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