Episode 812 | The 2025 State of TinySeed - Startups For the Rest of Us Recap

Podcast: Startups For the Rest of Us

Published: 2025-12-23

Duration: 29 minutes

Summary

Rob Walling provides an overview of TinySeed's journey since its inception, highlighting its growth to over 210 B2B SaaS companies and discussing trends such as the rise of AI-first startups and the importance of founder community.

What Happened

Rob Walling reflects on the inception of TinySeed in 2018, noting initial doubts about whether bootstrappers would want to raise money and if investors would be interested in funding them. Despite these uncertainties, TinySeed has grown into a micro VC with over 210 B2B SaaS companies in its portfolio, having raised nearly $60 million across several funds.

Walling describes the significant role that community has played in TinySeed's success, emphasizing the importance of founder connections and shared experiences. Events like Tiny Fest serve as a platform for founders to gather, share insights, and build relationships, which Walling considers crucial for long-term success and mental well-being.

He observes a major trend in the rise of AI-first companies, noting that about 30% of the latest TinySeed batch could not have existed three years ago due to technological limitations. Walling highlights the potential pitfalls of AI-focused startups, such as high churn rates and issues with vibe coding, which can lead to long-term maintenance challenges.

TinySeed has seen record application numbers in 2025, with a notable increase in applicants compared to the previous years. The average monthly recurring revenue (MRR) of applicants tends to be between $4,000 and $5,000, indicating a diverse range of startup maturity levels.

The episode also discusses the advantages of vertical and orthogonal SaaS over horizontal models, with Walling noting that vertical SaaS tends to perform better due to lower churn and less competition.

Walling emphasizes the value of TinySeed's mentorship program, which includes a roster of top-tier SaaS experts willing to give back to the community. This mentorship, combined with a strong founder network, provides a supportive ecosystem for startups to thrive.

Finally, Walling reflects on the importance of community and connection in the entrepreneurial journey, stating that shared experiences and relationships are what sustain founders through the challenges of building a company.

Key Insights