Jason Lemkin on Wiz, CrowdStrike and the SaaS Liquidity Crunch

SaaStr founder and investor Jason Lemkin tells Harry Stebbings that venture investors are acting as though liquidity will return despite a difficult exit market. This conversation was recorded in July 2024; figures and predictions reflect that moment, not current market conditions.

The speakers start with reports that Wiz rejected a proposed $23 billion Google acquisition. Stebbings cites $500 million in annual recurring revenue and 120% annual growth, implying a 46-times multiple of that stated ARR. Lemkin argues that forward growth could make the price less extraordinary; the transaction terms and metrics are treated as reported, not independently verified.

Lemkin speculates that Wiz could reach $1 billion ARR within roughly nine to fourteen months and compares the offer with CrowdStrike’s then-current multiple. That is a projection, not achieved revenue. His suggestion that avoiding dilution could make an offer more attractive to investors depends on future financing and deal terms.

He thinks Google Cloud may have wanted a large security acquisition to extend its growth and differentiate its cloud offering. He describes how large-company executives consider major acquisitions, but acknowledges that discussion of other possible targets and Google’s internal motives is conjecture.

Lemkin expects a large acquisition to draw antitrust scrutiny, comparing it with the failed Adobe–Figma deal, while expressing his own disagreement with some regulatory decisions. He does not claim to know whether a Wiz transaction would have been approved; legal outcomes depend on facts and regulators across jurisdictions.

The speakers reconstruct possible negotiations from press reports. Lemkin explicitly says they can only guess, then imagines how a price related to Wiz’s last financing might have emerged. His invented sequence, termination-fee example and suggested conversations are speculation, not confirmed terms.

He thinks prolonged regulatory uncertainty and the management distraction of an acquisition process could outweigh an attractive price. He recounts a founder’s experience of a difficult earlier sale process as an illustration. He guesses that Wiz’s team may have preferred avoiding a lengthy review; the interview does not establish its actual reasons.

Stebbings contrasts acquisition review with the demands of an IPO and public markets. Lemkin says he now tends to advise founders to take a decent exit because public-company pressures and slowing growth can be exhausting, while helping them decide if they disagree. He thinks Wiz could go public but does not know its timing or valuation.

Asked how he would vote as a Wiz director, Lemkin distinguishes early and late investors: a given exit can meet one fund’s needs while a later investor seeks more upside. He predicts a secondary transaction might offer liquidity, but this is a hypothetical future transaction, not an announcement or guaranteed price.

The two discuss the scarcity of venture liquidity. Lemkin worries that investors continue deploying funds while relying on a future recovery in exits. Stebbings counters that funds do not have to deploy simply because time has passed; Lemkin points to fundraising cycles, fees and maintaining market momentum as pressures. These are their assessments, not evidence of every fund’s incentives.

Lemkin argues that exceptional founders start companies in both good and bad markets, so investors must still find them. Stebbings adds that identifying a strong founder is not enough when many firms compete to invest. Both emphasize the difficulty of winning access as well as selecting a company.

They speculate about a Wiz secondary and IPO. Lemkin says a company at $200 million in revenue can go public, but may need faster growth than one at $500 million; he uses around 50–60% growth and 30% growth respectively as rough examples. These are market heuristics, not exchange requirements or a guaranteed timetable.

Turning to CrowdStrike’s July 2024 outage, Lemkin criticizes the company’s initial communication and wants a clearer root-cause explanation, including the human process behind the failed update. He argues a widely deployed security vendor has a special responsibility to explain what happened. His grade is his opinion, based on information available at the time.

He expects replacing core security infrastructure to take substantial time and thinks near-term customer churn may therefore be limited. But he anticipates a harder period for cross-selling and expansion after customers experienced disruption. These are forward-looking judgments, not measured retention or sales results.

For the bullish case, Lemkin distinguishes the faulty update from a security breach and thinks some customers may give a vendor one chance to recover. Impact varied by customer, he says, and rebuilding trust requires a convincing explanation and prevention plan. His view does not minimize the disruption or establish the absence of later security consequences.

For the bearish case, Stebbings raises litigation, fines and possible follow-on attacks. Lemkin acknowledges the risks but thinks recovery is more likely than collapse, while warning the company could become too conservative. These outcomes and legal costs were uncertain when they spoke.

The speakers note a reported market capitalization near $66 billion, down from around $100 billion before the incident. Lemkin guesses roughly $83 billion by year-end; Stebbings guesses $75 billion and discloses buying shares at a $74 billion valuation. Their estimates are dated predictions, not financial advice or realized outcomes.

Lemkin says CrowdStrike’s earlier growth guidance might provide a buffer, though he does not know the effect of the incident. He later recalls the anxiety of managing outages as a founder: a few minutes offline can become a major customer-support crisis. His account is personal experience, not a root-cause finding.

They discuss Clio’s announced $900 million round at a $3 billion valuation. Lemkin suggests much of the transaction may be secondary and cites about $200 million ARR, but gives no breakdown confirming the proportion. He estimates an approximately ten-times multiple using an inferred pre-money value; primary and secondary amounts and exact valuation math remain uncertain.

He says Clio took many years to reach $100 million in revenue before accelerating as payments became a larger part of its business. He praises founder Jack Newton’s persistence and compares the pattern with Bill.com. The timeline and growth figures are his account and should not be read as independently audited results.

Lemkin observes that a long company-building journey can extend beyond a nominal ten-year venture fund, even though secondary sales may provide some liquidity. He sees late acceleration as encouraging for founders who do not follow a rapid-growth path.

He argues that combining software with payments can be powerful when margins and customer value support it, but criticizes treating low-margin payment volume as equivalent to software revenue. He cites Shopify’s mix as an example; the percentage he gives is a time-specific estimate with no source in the interview.

On Harvey, Stebbings cites a $100 million round, a $1.5 billion valuation and a reported revenue-growth implication. Lemkin praises the speed of AI adoption but questions whether similar legal-document features will become widely available. The implied $30 million ARR is Stebbings’s inference, not a confirmed company disclosure in the interview.

Lemkin predicts substantial parity among AI features in legal technology and contact centers during 2025, while acknowledging implementation can differ and a company such as Harvey could still stand out. His examples include a company whose board he sits on. The parity claim is a forecast, not proof that products or outcomes are identical.

He questions whether experimental AI budgets will persist and whether quickly copied features will be defensible. He thinks niche products with distinctive workflows may still differentiate. He notes his investment in restaurant software company Owner; that interest is relevant to his assessment of the market.

In quick fire, Lemkin predicts many recent venture funds may ultimately return only one times capital. He compares that concern with the aftermath of the 2000 vintage but does not claim the situations are identical. It is a forecast about fund outcomes, not a measured result for those funds.

He calls Klaviyo underappreciated, citing its e-commerce specialization, growth and revenue, and offers his own valuation opinion. He then says Snowflake appears more vulnerable than its earlier reputation suggested, comparing it with Databricks. His figures and investment views are time-specific and not verified recommendations.

Asked which private companies he wishes he owned, Lemkin names Wiz and ServiceTitan and regrets not pursuing their founders more proactively. Stebbings mentions his own preferred company. The comments are personal investment preferences, not evidence of future performance.

Lemkin says his biggest professional regret is not being a better recruiter and not building a stronger investment team. He advises founders to prioritize finding people who can solve problems rather than trying to handle everything personally. He sees hiring leadership as a core responsibility after product-market fit.

He recalls discussing a growing company whose management team had been slow to hire. For both founders and investors, he thinks failing to expand the team narrows the opportunities one can pursue. The conversation ends with thanks.