After funding 210+ B2B SaaS companies, what patterns have emerged?

In this episode, Rob Walling shares the 2025 State of TinySeed, from its first fund in 2018 to a global portfolio of over 210 B2B SaaS companies. He reflects on TinySeed’s growth, what the data reveals about today’s founders, funding trends, and the rise of AI-first startups.

Topics we cover: 

(1:46) – How TinySeed began and the doubts it faced 

(3:51) – Growing to 210+ portfolio companies and $60M raised

(11:15) – The rise of AI-first startups and “vibe-coded” apps

(13:09) – Record application numbers and founder trends in 2025

(19:58) – Why vertical SaaS is outperforming horizontal SaaS

(21:59) – The importance of founder community and shared experience

(25:06) – How TinySeed and MicroConf create long-term founder connections

Links from the Show: 

Apply to TinySeed

Invest in TinySeed

TinySeed MentorsAccelerator Program Details — TinySeed

TinySeed Portfolio

The SaaS Playbook by Rob Walling

MicroConf - Community for Bootstrapped SaaS Founders

If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you!

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Rob Walling – “State of TinySeed at the End of 2025”

Host of “Startups For the Rest Of Us”

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Welcome back to another episode of Startups For the Rest Of Us. I’m your host, Rob Walling, and in this episode I talk through the state of TinySeed as of the end of 2025.

When we first proposed investing in bootstrappers back in 2018, there was a lot of doubt in my mind—whether bootstrappers would want to raise money, whether investors would want to invest in bootstrappers, and whether we knew enough accredited investors with money to put into a fund.

We announced TinySeed in October 2018, raised our first fund in 2019, and have just closed Fund 3 (our fourth fund, technically). To date we’ve invested in more than 210 B2B SaaS companies and 329 founders.

TinyFest 2025

I just returned from TinyFest in Cancun (early December 2025). The three purposes of the event are:

1. Kick‑off for our fall batch of founders.

2. Alumni gathering so founders from different batches can mingle.

3. Team meetup for the TinySeed staff.

The event was intimate—about 74 people (≈ 40 founders) over two‑and‑a‑half days—allowing us to talk with almost everyone.

Reflections on Seven Years

• Fundraising: Our first fund aimed for $750 k to back five companies. It closed at $0.8 M, allowing two batches and 25 companies.

• Capital raised: Across all funds we’ve raised just under $60 million—a “micro‑VC” size, mostly from founders and other accredited investors.

• Returns: Fund 1 has already returned capital to its investors, a strong signal for subsequent funds.

Trends We’re Seeing

1. AI‑first startups – Roughly 30 % of the current batch (3‑4 of 10) are AI‑first, meaning they couldn’t have existed three years ago.

2. Vibe/No‑code coding – About 10 % of interviewees use AI‑assisted or no‑code tools; we’re cautious about backing such companies because of potential technical debt.

3. Applicant volume – Fall 2025 saw a record number of applicants, 40 % higher than spring 2025.

4. Seasonality – Fall batches consistently attract more applicants than spring batches; overall growth is just under 10 % year‑over‑year.

5. Selectivity – We accept a lower percentage of applicants than Harvard (≈ 3.5 %); roughly 75‑80 % of applicants come from referrals (alumni, MicroConf, YouTube, etc.).

Geographic Distribution (Current Batch)

• 6 founders in the US

• 1 in Dubai

• 1 in Mexico

• 1 in Chile

• 1 in the UK

You can view the full portfolio at tinyseed.com/portfolio.

Vertical vs. Horizontal SaaS

Across the latest ten companies, all are vertical or orthogonal SaaS (e.g., retail stores, first responders, jewelers, IT service teams, cannabis growers, AI‑powered security access). This reflects a broader trend we’ve observed: vertical SaaS tends to have stronger exits, lower churn, and clearer moats than horizontal SaaS.

Community & Mentorship

TinySeed’s core belief is that founders should not feel alone. Our batch‑based accelerator provides:

• Mandatory in‑person kickoff (with travel stipend)

• Ongoing mastermind groups and mentorship from seasoned SaaS founders (e.g., Basecamp, Heaton Shaw, Dev Basu, April Dunford, Chris Savage, Rand Fishkin)

• A remote‑first structure that still values face‑to‑face connection

The community has been essential for my own sanity and for the success of the founders we back.

Closing Thoughts

Running an accelerator is labor‑intensive and expensive, but the relationships and community we’ve built make it worthwhile. The shared experience of events like TinyFest energizes us and reinforces why we continue to invest in bootstrapped SaaS founders.

If you’re a founder or aspiring founder with a B2B SaaS company, you can apply at tinyseed.com/apply. Although we’re not currently fundraising, you can still express interest in investing at tinyseed.com/invest.

Thanks for joining me this week. I’ll be back next week with 2025 predictions and a look ahead to 2026.

This is Rob Walling signing off from episode 812.