#180: AI Is Not Killing Vertical SaaS - It's Practical Leverage - Deepak Sindwani

Summary of #180: AI Is Not Killing Vertical SaaS - It's Practical Leverage - Deepak Sindwani

by Greg Head

49m•January 23, 2026
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Overview of Practical Founders — #180: "AI Is Not Killing Vertical SaaS — It's Practical Leverage" (Deepak Sindwani)

Greg Head interviews Deepak Sindwani, founder and managing partner of WaveCrest Growth Partners. The conversation covers WaveCrest’s 10-year growth-equity approach for capital-efficient, vertical B2B SaaS companies ($5–20M ARR), how the firm partners with founders, what’s changed in the market (especially AI and go‑to‑market), and practical advice for founders considering growth equity or scaling beyond founder-led operations.

Key takeaways

  • WaveCrest’s focus: growth equity for capital-efficient, vertical SaaS founders at roughly $5–20M ARR, helping them scale toward $20–50M ARR without forcing a VC-style blitz.
  • Investment style: collaborative, bespoke support (both minority and majority stakes; no buyouts). Typical checks/allocations range from $10–50M per company; primary capital often 5–15% and secondary 5–15%. WaveCrest has ~18 investments and manages multiple funds (recent fund ≈ $450M; firm ~ $1B AUM).
  • Founder alignment: WaveCrest requires founders to retain substantial equity (generally ≥50% post-deal alignment expectation) to preserve incentives and founder-driven culture.
  • Operating support: a dedicated Operating Platform with specialists in go-to-market, finance/back office, talent; product/tech and AI capabilities being expanded.
  • AI is additive, not existential: software + AI + data = defensibility. WaveCrest’s portfolio pursues two AI tracks — internal efficiency (10–30% cost savings potential) and AI-enabled product features that can create new revenue streams.
  • Vertical defensibility: deep domain knowledge, customer relationships, and proprietary data protect vertical SaaS from horizontal LLM entrants.
  • Go‑to‑market evolution: founder-led evangelism must be replicated via systems, comp plans, and scalable teams as firms scale from ~$7M to ~$35M ARR.
  • Exit environment: 2022–24 was a liquidity drought; 2026 shows improvement (private equity and strategics active). Multiple exit paths: private equity recaps, PE-backed strategics, public acquirers; WaveCrest helps optimize timing and structure to match founder goals.

What WaveCrest Growth Partners does (concise profile)

  • Target companies: vertical, subject-matter expert-led SaaS businesses, capital-efficient, typically growing 50–60% p.a. at investment.
  • Typical goals: help founders de-risk personally (partial liquidity) and operationally (scale sales, marketing, CS, product).
  • Investment mix: primary growth capital + secondary liquidity to founders/early investors. Both minority and majority positions (no full buyouts).
  • Value-add: hands-on Growth Ops/Operating Platform — GTM playbooks/best-practices, talent hiring, finance/back-office buildouts, pricing optimization (deep focus on pricing at ~$10M ARR), and soon product/AI playbook support.
  • Community & peer learning: functional meetups (CEOs, CFOs, CROs, heads of product/people) and Slack channels for portfolio knowledge-sharing.

AI: opportunities and practical implications

  • Thesis: AI amplifies SaaS — it doesn’t replace vertical software. The best path is software + AI + proprietary data.
  • Two-pronged adoption:
    • Internal efficiency: marketing, sales, finance, CS automation (expect 10–30% cost savings in some cases).
    • Product features: AI-enabled capabilities layered on existing workflows; new monetizable functionality requires pricing experiments.
  • Vertical AI advantage: deep domain data + workflows create moats that horizontal LLMs cannot easily replicate.
  • Pricing & go‑to‑market: new AI capabilities can justify new pricing tiers; founders should test value-based pricing for AI features.
  • Caution: customer readiness varies — some vertical customers prefer human interaction or local accents and may resist full automation.

Go-to-market (GTM) changes founders should prioritize

  • From founder‑led to repeatable sales: document and systematize founder selling motion so it can be replicated across a growing team.
  • Use AI to improve prospecting, qualification, and follow-up (automated outreach, enriched prospect data).
  • Marketing is evolving (Gen‑AI-driven discovery and content). Think beyond traditional SEO to generative-AI discovery channels.
  • Customer success is a prime AI adoption area — automated triage, faster support, proactive retention signals.
  • Invest in attribution and analytics to focus spend on high-efficiency channels.

Exit & liquidity realities (practical guidance)

  • Markets normalized after the 2019–2024 valuation cycle; 2026 shows renewed buyer activity (PE, strategics, public acquirers).
  • WaveCrest supports flexible outcomes: partial liquidity + continuation, full sale, or recap with new partners — tailored to founder objectives.
  • Timing should consider macro, competitive dynamics, and personal founder goals.

Notable quotes & concise highlights

  • “Software plus AI plus data” — the practical formula for defensibility.
  • “We don’t think B2B SaaS is dead.” — AI augments rather than replaces vertical SaaS.
  • “The scars on our backs shouldn’t be the scars on your backs.” — WaveCrest offers practical lessons from experience.
  • “90% of software companies at $10M are mispriced.” — strong emphasis on pricing optimization as a growth lever.
  • “Founder evangelism scales differently — you can’t sell the company with the same tactics as you got it to $7M.” — key GTM inflection.

Actionable recommendations for founders listening

  • If you’re at ~$5–20M ARR and profitable/break-even, evaluate growth equity as a way to (a) take controlled liquidity, (b) invest in scalable GTM, and (c) gain operating support — without losing founder control.
  • Prioritize building a data moat: collect, structure, and control the vertical data that powers AI features.
  • Start with practical AI experiments across functions (CS, sales, marketing, finance) to identify 10–30% efficiency gains before large-scale rollouts.
  • Revisit pricing now — new AI value likely justifies new monetization paths; test value-based pricing for AI-enabled features.
  • Build repeatable sales processes and compensation plans to replicate founder-led success across hires.
  • Leverage peer networks and portfolio communities — practical lessons from peers often beat theoretical playbooks.

How to connect

  • Deepak Sindwani / WaveCrest Growth Partners — visit wavecrestgrowth.com.
  • Contact: dpac@wavecrestgrowth.com (as provided on the episode).

Short list of topics covered in the episode

  • WaveCrest origin, thesis, and 10-year milestone
  • Growth equity vs. VC vs. buyout PE
  • Typical deal structure, check sizes, and founder liquidity
  • Operating platform: GTM, finance, talent, product/AI
  • AI’s impact on product and internal operations
  • Vertical AI defensibility and competitive dynamics
  • GTM changes and scaling sales beyond the founder
  • Exit markets and liquidity timing
  • Portfolio community and knowledge sharing
  • Predictive analytics and data-coop opportunities

If you want a one-line summary: WaveCrest backs practical, capital-efficient vertical SaaS founders with collaborative growth capital and operating support — betting that software + AI + data creates defensible, scalable businesses while preserving founder alignment and culture.