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The official CEO.com podcast featuring unfiltered conversations with the leaders shaping our world.
Clint Betts: Sheldon, welcome to the show. You’re the Managing Partner of Blueprint Equity. Tell us what Blueprint Equity is.
Sheldon Lewis: Blueprint Equity is a growth equity fund.
We’re similar to a venture capital or private equity fund, but we sit somewhere in the middle. We currently have about $600 million under management and are fortunate enough to invest in great entrepreneurs and help them grow their businesses.
Most of our investments are in B2B vertical operating systems and vertical SaaS companies. We help those businesses move from one stage of growth to the next and work closely with founders throughout that journey.
Clint Betts: That’s why I’m excited to talk with you. The investing landscape right now is fascinating and seems both volatile and a little bit crazy.
When you say growth equity, what stage are we talking about? Series A? Series C?
Sheldon Lewis: Almost all Series A.
Typically, we invest in companies doing between $1 million and $7 million in ARR that are growing more than 75% year over year. Most are bootstrapped or very lightly funded.
We’re usually leading that first institutional round, and our check sizes range from about $5 million to $35 million.
Clint Betts: That’s a really interesting position in the market.
There’s a phrase that’s gotten a lot of attention recently: “SaaSpocalypse.”
Give me your sense of the state of SaaS right now.
Sheldon Lewis: I’ve definitely heard that term more than once over the last few months.
I’ve been investing for more than 20 years now, and I’d say this is simultaneously the most exciting and the scariest time I’ve ever seen to be a software investor.
It’s exciting because we’re watching an entirely new world emerge right in front of us. There’s tremendous opportunity.
It’s scary because everything is changing so quickly.
If I had to summarize the current market, I’d say a lot of firms are frozen.
There are still trillions of dollars available to invest, so capital will find a home eventually. But many firms are trying to decide whether they should dramatically change their investment strategies or simply wait for more clarity.
Since around February, I’ve seen a lot of investors slow down materially while they try to determine exactly how AI changes the landscape.
Clint Betts: Does the term SaaSpocalypse make sense to you?
Some public SaaS companies are trading at valuations that seem almost unbelievable. There’s this perception that anyone can spin up a HubSpot competitor in a day because of AI.
But that’s not really true.
Sheldon Lewis: I think it’s massively overblown.
I don’t invest in public markets, so nobody should rely on me for stock picks, but if you asked me personally, I think this is actually a pretty interesting time to buy public SaaS companies because many of them seem significantly undervalued.
The market had a bit of a collective panic.
Yes, software is easier to build than ever before.
Yes, AI allows people to launch products faster and more cheaply.
But nobody is going home tonight and vibe-coding a complete operating system for a construction company.
Those businesses still need software vendors that stay on top of technology, compliance, customer support, implementation, and all the other complexities involved.
You still need sales teams.
You still need customer success teams.
You still need product teams.
Software businesses may become leaner, but it’s very difficult to build a substantial company as a one-person operation.
The strongest software companies should actually become more profitable if they adopt AI effectively.
My guess is that six to nine months from now, there will be much greater clarity around what AI can and cannot do, and many people will realize it’s more complementary than destructive.
Clint Betts: Are the founders coming to you today asking for less money than they would have three or five years ago?
Sheldon Lewis: Absolutely.
Many investors are asking whether companies will even need traditional Series B, C, or D rounds anymore.
Large firms are wondering whether they should move earlier because AI is making startups more capital efficient.
Historically, a company might raise a Series A and then need additional rounds to reach profitability.
Now there’s a real question of whether some companies can raise a Series A, leverage AI to grow more efficiently, and then become self-sustaining without needing much additional capital.
I don’t think we’re fully there yet, but there’s no question companies can accomplish more with less money today.
Clint Betts: It’s interesting because while people talk about a SaaSpocalypse, there might also be a venture capital apocalypse.
It’s simply becoming easier to build companies.
What’s your view of the broader venture ecosystem?
Sheldon Lewis: Growth equity and venture capital operate very differently.
Traditional venture capital often follows a model where you make 30 investments, expect most of them to fail, and hope a handful become massive winners.
Growth equity is much more focused on fundamentals.
We invest in companies that already have real customers, real revenue, and proven business models.
We’re not just betting on a market opportunity or a charismatic founder. We’re investing in businesses that have already demonstrated traction.
From a fundraising standpoint, it’s definitely harder right now.
We’ve been fortunate because we’ve generated strong returns, which makes fundraising easier.
But for new funds, especially first-time funds, it’s incredibly difficult.
Investors are moving toward safety. They’re allocating capital to established firms with long track records.
That doesn’t mean innovation disappears.
I actually think there will be a new generation of investment firms built around this AI wave.
But right now, many investors are prioritizing experience and stability.
Clint Betts: It’s amazing how quickly things changed.
Back in 2021 and 2022, it felt like everyone was launching a fund.
Now it seems almost impossible.
What verticals are you most excited about?
Sheldon Lewis: We’ve always been focused on vertical operating systems and systems of record.
Out of our 26 investments, the vast majority fall into that category.
The reason is simple.
You want to be embedded directly into the workflow.
The closer your software is to a customer’s day-to-day operations, the more valuable it becomes.
You also want access to proprietary data.
The more unique data you have, the stronger your long-term competitive advantage.
For example, we recently invested in a company called Develo, which is an AI-native operating system for pediatricians.
It handles notes, prescriptions, insurance interactions, and other core workflows.
Pediatricians aren’t going to build their own HIPAA-compliant software stack.
But if we can continue introducing AI into that workflow to make them more effective, that’s incredibly compelling.
We’ve made investments in construction technology, property technology, golf course management software, and software for pickleball and padel facilities.
Construction and proptech remain particularly attractive because they’re enormous markets that are still relatively under-digitized.
Clint Betts: When a founder comes to you, what are you looking for?
Sheldon Lewis: Historically, we loved founders who were solving problems they had personally experienced.
Someone who worked in an industry, saw a problem firsthand, and decided to build a solution.
That’s still valuable.
But what I care about most is the founder’s capacity to grow.
We’re betting as much on the jockey as we are on the horse.
Can this person take a company from $1 million to $5 million in ARR?
Can they take it from $5 million to $25 million?
Or, equally important, do they recognize when they need help?
Some founders openly tell us, “I’m great at getting to $5 million, but I’ll need someone else to help scale beyond that.”
That’s a perfectly good answer.
I’m looking for intelligence, focus, work ethic, and self-awareness.
I’m also looking for leaders who can attract and retain great talent.
At a certain point, leadership becomes less about building the product and more about building the team.
Clint Betts: What makes a great board relationship?
Sheldon Lewis: The biggest thing is communication.
Most of the companies we invest in don’t even have formal boards yet. We’re often helping them build their first board structure and board deck.
The thing that derails board meetings more than anything else is surprises.
Bad news isn’t the problem.
Surprises are the problem.
If something is going wrong, tell your board before the board meeting.
I often encourage founders to call board members a week before the meeting and give them a preview of any difficult topics.
That gives everyone time to process the information and come prepared with solutions instead of reacting emotionally in the meeting itself.
Good communication solves most board issues.
Clint Betts: What’s your take on AI and the growing public backlash against it?
People are protesting data centers. Commencement speakers get booed for talking about AI. Why do you think that’s happening?
Sheldon Lewis: Honestly, I understand it.
If I were graduating college today and struggling to find an entry-level job because AI was automating some of those roles, I’d probably be frustrated too.
A lot of the disruption is happening at the entry level and around repetitive tasks.
That affects a lot of people.
At the same time, those same people are often using AI every day.
So there’s a tension there.
The reality is that the genie is out of the bottle.
We can and should have thoughtful regulation.
We should absolutely think carefully about how this technology develops.
But we’re not putting it back.
The challenge now is figuring out how to work with it and adapt.
I understand why people are nervous because AI is disrupting real lives today.
And honestly, there’s a scenario where all of us are affected in some way.
That’s reason enough to take it seriously.
Clint Betts: What does a typical day look like for you?
Sheldon Lewis: I’m a huge believer in time blocking.
One of my favorite books is The One Thing. The premise is simple: identify the single most important thing and organize everything around it.
Every evening, I plan the next day.
That helps me sleep better because I know exactly what I need to accomplish.
The days themselves are pretty hectic.
Blueprint is still a growing company. We have 21 employees.
We also have hundreds of investors who expect communication and reporting.
And then we have portfolio companies that need support.
Most of my time is actually spent working with companies we’ve already invested in.
We now have an operations team of six people whose sole job is helping portfolio companies hire talent, improve go-to-market strategies, and implement AI initiatives.
We succeed when those companies succeed.
So we spend a lot of time rolling up our sleeves and helping.
Clint Betts: Finally, we end every interview the same way.
At CEO.com, we believe the chances one gives are just as important as the chances one takes.
Who gave you a chance that helped get you where you are today?
Sheldon Lewis: The obvious answer is my parents.
My mom was a school nurse. My dad worked several jobs, including being a ski instructor.
They worked incredibly hard to give me opportunities.
Professionally, I’d point to Gavin Turner and Jason Payne from Mainsail Partners.
They took a chance on me early in my investing career and brought me in from investment banking.
And then there’s Dave Dutch, who became a mentor and close friend. He actually officiated my wedding a year ago.
Those people believed in me, invested in me, and gave me opportunities I wouldn’t have had otherwise.
I owe them a tremendous amount.
Clint Betts: Sheldon, thank you so much.
Sheldon Lewis: Thanks for having me. I appreciate it.