← The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: Why Traditional VC is Broken: How VCs Learned Nothing from 2021 | Why LPs are More Important than Founders & Advice to Emerging Managers | Bull Case for Bytedance & Why TikTok's Ban Doesn't Matter with Mitchell Green, Lead Edge Capital
01:17:32
Mitchell Green is the Founder and Managing Partner of Lead Edge Capital. Mitchell has led or co-led investments in companies including Alibaba, Asana, Benchling, ByteDance, Duo Security, Grafana, Mindbody, and Xamarin, among several others. In...
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- [00:00]
Mitchell Green
I think investing in AI infrastructure today is like investing in websites in 1997. The incumbents usually win. It's customer distribution. The idea of a single person AI company I think is like comical at best. I think the venture industry was about to be in for a rude awakening and then AI showed up. People didn't learn a damn thing from 20 and 21. It's like shocking.
- [00:24]
Harry Stebbings
This is 20 VC with me, Harry Stebbings. Now, honestly, I think there are very few truly great investors in venturestay. Honestly, I think much of is a Ponzi scheme. One big firm upholds the numbers of another big firm and they both hope that the music does not stop. And then there are real players who make money reliably for their partners. They do the work. They're most often in silence, which is why it's such a great joy when I can tell their story on the show. One of those individuals is Mitchell Green, co founder of Lead Edge, one of the most direct, no BS and brilliant investors.
- [00:58]
Unknown
And guess what?
- [00:59]
Harry Stebbings
He makes a shit ton of money for his investors. This was such a joy to do.
- [01:03]
Unknown
And I think you will love it.
- [01:04]
Harry Stebbings
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- [03:16]
Unknown
You have now arrived at your destination. Mitchell. I'm so excited for this. When Nigel Morris messages me and says, hey, you've got to spend time with my friend Mitchell, I'm like, you know what, this is going to be a fun one. So thank you so much for joining me.
- [03:28]
Mitchell Green
Absolutely. Thanks for having me. Nigel's a legend, so.
- [03:31]
Unknown
He is a legend. Always makes me feel very lazy though. So athletic.
- [03:35]
Mitchell Green
He's also the hardest working man. And I joked to him the first time I met him, I'm like, well, how's retirement? And then he showed me his Outlook calendar and I'm like, I think you work more now than you did when you ran Capital One. And by the way, never go on a bicycle ride with him.
- [03:47]
Unknown
I would never. Before we dive into Lead Edge, there was Tiger and there was Bessemer before.
- [03:52]
Mitchell Green
Yeah.
- [03:53]
Unknown
When you think about your takeaways from those experiences that shaped how you operate and run Lead Edge today, what are the one or two that really shape how you think about Lead Edge?
- [04:02]
Mitchell Green
What I would tell you is my time at Bessemer was very formative for why everything we do here at Lead Edge. When I joined Bessemer 2005, Bessemer is this legendary early stage venture fund that is very Shark Tank esque. And what I mean by that is every year a thousand entrepreneurs would walk in the door and at the time they had five partners and it was very like Shark Tank esque. They were wondering why, why Insight was finding these $15 million revenue companies growing fast that had never raised money. And they were like personal friends with the guys that ran, you know, Jeff and Devin and the guys at Insight and all that Insight was doing was replicating what Summit and TA did, which is hire 22 to 24 year old knuckleheads which my now partner Brian and I were and pound the phones calling companies all day long. You realize if the company calls you back, the company sucks. It's the CEO you talk to every two days for a month. And you know how you know what a good company is over two years talk to 10,000 bad companies. When we got there a week into the job they're like, okay, next Monday you're going to come and present your best companies. We got there, we're like oh, we found this great company. It's 2 million revenue, it's going to be the next Google. They're like no it's not. This company sucks. Find us companies that meet like 10 million of revenue and then the next week you'd find a company that meets 12 million of revenue that grows 10% a year and they're like no, no. Find us companies that grow for them like 50% a year. And then you find a company but it has 20 million in revenue, grows 40% a year but you know, has 30% gross margins and they're like no, no. Find this business with like 70% gross margins and they over like a period of a six week time, eight week time built these like five criteria. And they basically said on Mondays when we do our pipeline meetings, we want you to never bring a company that meets less than three criteria. If it meets five, you better already have the meeting, set up the next meeting and start the pipeline meeting with I spoke to company abc. It meets X number of criteria. Here's what it does. And so it just like it was a very rigid framework in a world where like you can call companies all day long and it's like an unlimited universe like stay like very rigid. And so when we took that framework, we expanded it to six. Now it's the lead edge eight and it defines everything we do.
- [06:13]
Unknown
I love that in terms of how it defines everything you do and I love the framework structure. I had an Abeel on from Spark recently and he said that bluntly, this form of spreadsheet investing respectfully and I hope you, you don't mind me calling it spreadsheet investor.
- [06:24]
Mitchell Green
Totally fine.
- [06:25]
Unknown
Okay. Is outdated in a world of AI and in the next generation. And that a kind of banker led approach will not work in the next generation. Is that fair and how do you think about that?
- [06:36]
Mitchell Green
Look, we speak to 10,000 companies a year. We have a team of 2022 to 24 year olds that are speaking to 10,000 companies a year. If I say I need to meet all eight of these criteria, it's about a 1% yield, which is, you know, 10,000 companies, 100 meet all eight criteria. And to do five to seven deals a year, that's like too small of a pond deficient. You wouldn't end up doing anything. So what we find is if you say I need to meet five or more of these criteria, it's just objective. Like you're 23 years old. Was the company 4 million of revenue or 18 million of revenue, you find about 10%. And this is after seeking to probably 70,000 companies over the last decade, it's about a 10% yield. You get five or more criteria. We due diligence. That gets you 10,000 to 1,000. You do diligence on one hundred and fifty to one hundred and seventy five of them. How do you go from 1,000 to 150 to 175? Most aren't looking to do anything. You're calling them, they're not calling you. And by the way, the good ones don't call you back. The good ones you call every two days for a month. That 150 to 175 leads you to do five to seven deals a year. In terms of the AI response, we find the companies 70% of the stuff we invest in, the guys at Spark have never looked at, they've never heard of, because they're investing mainly in the coasts. Less than 10% of our companies are in the Bay Area. Not because we don't like Bay Area entrepreneurs. We love Bay Area entrepreneurs. They can build some of the biggest companies in the planet Earth. I just think it's very hard to make money at 100 times revenues invest in. And also if you look at our companies, less than 10% are in the Bay Area 70% of the time. We're the first institutional investor now AI and disrupted all this stuff. So when Deep Seek was announced, which I find quite funny, that a lot of people that invest in the infrastructure of AI didn't even know about it. I think investing in AI infrastructure today is like investing in websites. In 1997, you and I could have taken $50 million, but some microsystem servers and built a website. Today, for £10amonth, we can build a website that's 50 times better than that. Same thing is going to happen. Prices are going to plummet. But the stock market actually acted pretty rationally that day. What happened? Nvidia stock fell. The software stocks went up. So why do I mention that we're investors in a company in Toronto that we own the business called Gravity. World's most boring company. It makes budget planning software for small local governments. If you are the water district of Atherton, if you are the Palo Alto police department, you need to post a budget online. It helps you plan the budget. Post it online. Roughly around a $10 million business grows very nicely. Had never raised capital before we came in, had never had a salesperson. We came in, brought our new CEO, brought a new CRO, partnered with a guy who had built a $200 million govtech business. My point is here on the AI stuff, they have 10 software engineers. They can use companies like Cursor Copilot to help their 10 engineers become like 30 or 40 engineers. And you're going to see this at Salesforce. You're going to see this at workday. The incumbents usually win. Since the iPhone came out in 2007, 2000, whatever, six, whatever it was, there's only been three companies built that did not exist before that were $100 billion companies. ByteDance, Pindodo and Uber. Who won? Facebook, Google, Microsoft, like incumbency wins. It's customer distribution. The idea of a single person AI company I think is like comical at best.
- [09:54]
Unknown
Which is why unpack that because everyone is saying, hey, we're going to have billion dollar companies with one person.
- [09:59]
Mitchell Green
It's like these software companies are not like, as you know, you run an awesome venture fund. Like a lot of the software stuff isn't that. It's not like that complicated. This is not like rocket science tech that people are solving. It's sales, it's distribution, it's gtm, it's.
- [10:12]
Unknown
Regulation, it's go to market, it's difficult.
- [10:14]
Mitchell Green
It's that kind of stuff. If I had a dollar for every time somebody had said to me, like, oh, Microsoft's is going to do this. Like, I would have never invested in any software companies and nor would anybody else have. But the great thing is, it's like people ask us, they're like, well, you must run out of companies to call. Every Monday morning. New companies come in that we've never heard of. This is like software. You know, when Josh Kushner said it 10 years ago that software was hitting the world, I was like, I just kind of like, this sounds crazy, but he's right. Like it's changing every sector and every industry. And I believe when you look at like technological trends over the last 50 years, people always overestimate it. Over the near term, and they always underestimate it in the long term. AI is going to completely revolutionize the world over the next 10 to 20 years. But it's not going to be because we create a new call center software company. There's going to be some type of company that AI is enabling that nobody else could do something before, and that changes it. And it's going to be guys like you or Benchmark or Sequoia that find that thing at the very early stage. And my guess is it is not just some infrastructure software company that like, the world knows about right now.
- [11:20]
Unknown
I completely agree with you. I just want to take it in turn because you mentioned Gravity, this company, you said like 10 million ARR.
- [11:24]
Harry Stebbings
I'm just intrigued because it's a very.
- [11:26]
Unknown
Different world to the one I actually inhabit. Honestly, Mitchell, what does that deal look like in terms of price?
- [11:32]
Mitchell Green
I think we bought the business for like $50 million or something like that. We own the company. Look, we bought the business for $50 million. And by the way, it grows like 50, 60% a year now. By the way, it will never be an IPO in a million years. It will never be an ipo. We want to build a business. So I'll give you an example. We just sold a company. There was a company called SafeSend that makes. It's like a verticalized version of DocuSign for tax returns. There's a bunch of reasons. DocuSign is not very good at it. It also is like the tax organizer that people get that like, you know, did you get married this year? Did you have kids? Did you move and all this sort of things. When we invested, when we bought, we bought about 60% of the company in 2021. My partner Nime did the deal and my partner Brian, that business we met through Cold calling. It was based in Ann Arbor, Michigan. It was a bootstrap business that had never raised capital, had been around for six or seven years, and it was Covid enabled. And what do I mean by that? It turns out before COVID a bunch of people, like, used to literally go to their accountant's office and like, sign their tax returns. Sounds totally insane. But after Covid, like you couldn't do. During COVID you couldn't do that. So it was all electronic. But then it turns out it stayed Covid enabled, unlike a virtual events company, like a hoppin, where, like, people during COVID couldn't go to. Couldn't go to events, they went to virtual events. It turns out that people like to go to Vegas and drink beer and get away from their husbands and wives and children. And so like everything went back to Vegas in these events. You'd never have gotten a docusign and said, oh, I'm sorry, please send me a paper copy. It's like the reverse. So this thing was cool. So we invested in that business. It was about 13 of ARR. It was growing about 50, 60% a year. It was a controlled deal. So we were buying 60% of the company and we bought 60% for about 90 of equity and 20 of debt. So what is that? I don't know. 130, $140 million valuation in three and a half years. We built the business to about 47 million of revenue and very nicely profitable. And we sold it to Thomson Reuters, you know, for a great return. That was a business that if you had read our investment memo, the word IPO would not have come up in the thing. We were like, listen, we'll grow it from 13, 14 million to 60, 70, 80 and we'll sell it to a mid market private equity fund because it's got 90 plus percent gross dollar retention. Or we'll sell it to a strategic if that deal. So we pay, you know, I don't 130, 140 for it. Middle of 21 insanity, right? Had that deal been backed by Benchmark like Vishra or Peter Fenton or one of those guys back to benchmark doing a minority deal based in Silicon Valley, it would have been $500 million. Yeah. And so like, let's go find stuff. We don't have to play the same game. Let's go find the boring stuff that's not going to be the next. There's zero percent chance it's the next Snowflake, it's the next data dog. Let's go find stuff that we can just build, like, you know, Invest when they're 10 to 20 million dollars revenue software businesses and exit them when they're 60 to 80 million dollars software businesses.
- [14:18]
Unknown
The immediate response would be that yours aren't generational defining founders 100%. Correct me, Phantom Vish would be like, no, we have to back founders who reshape categories like true, true visionary innovators. And here you're talking about a control deal where you're bringing in a team, which is amazing, but a very different scenario.
- [14:34]
Mitchell Green
That's totally fine. We have these eight criteria. Some of them are like generational companies. Late last year we were buying ByteDance. We were paying five times earnings for it. It grows like 25, 30% a year. It's just. Do you meet the framework of what we do? We own a business called Exagrid that we started in 2002. We own about a third of the company. It last raised money 15 years ago. We bought out Lehman Brothers. It's a $160 $570 million revenue business that competes with HP and Dell and like storage devices, it's a 70% gross margin business. It did 26 million of EBITDA last year. We bought it for. We bought our stake at $130 million valuation. Great. I'm going to build it into a $250 million revenue business doing 70 of EBITDA and I'm going to sell it for 10 times EBITDA and make four times that money. No, it is not generational game defining but it is tech investing, making really good return, making like, you know, good returns.
- [15:30]
Unknown
So I am really worried because we're seeing the shakeout now. I'm getting old. You said, I think you said. I was, I'm 28, Mitchell. Just to clarify that.
- [15:38]
Mitchell Green
No, I met the guy who sparked.
- [15:39]
Unknown
Oh thank God.
- [15:40]
Mitchell Green
I was like, Jesus.
- [15:41]
Unknown
I'm not that.
- [15:42]
Harry Stebbings
But I'm really worried because we're seeing.
- [15:43]
Unknown
This generation of SaaS companies now that's raised a lot of money, but actually they're not profitable. Growth is in the mid teens. Now yearly like this is, you know, 10 to 20% growth and revenues of 50 to 200 million. They are not big enough for PE.
- [15:57]
Mitchell Green
Living dead. So fundamental problem that happened, we saw this when we were at Bessemer Cold coin companies. Back then you would basically exit a company through an IPO or a strategic. Those were like the two options on how you could get out of a company. And if the strategic didn't show up and if you got it to like 50, 60, 70 million revenue and stopped growing, you'd be like, well then what the heck do I do? And in 2010, 2008 timeframe, mid market private equity firms like Nautic Partners, GTCR, Charles bank, they would buy industrial companies, manufacturing companies, services companies. Some bought consumer, some bought healthcare, none bought software. And that was just as like the vistas, Thomas and Francisco's were like just starting to start. Fast forward today now have these big software private equity firms that have gotten very big. And you also have mid market private equity funds where by the way these portfolios, they still buy industrial companies, manufacturing companies. Their portfolios grow at like GDP plus 2, right? So if I bring up a company growing 15% a year, that's like, that's like really fast for them. And now it's not 100% but 50, 60% of these mid market private equity firms also buy software companies. Like they have a sleeve to do software. So now if you like look at all of our exits. A third of our exits have actually come to private equity in those companies. By the way, I've got some in our portfolio. Don't worry, we did some real stupid stuff in 20, 22, 2020 and 21 as everybody else did as well. No, no, no, exactly none. You'll have companies that have 130 million of revenue, that have 18% growth. They don't burn that much money, but they have $130 million of cash. These companies effectively went public in 2015. 17. When companies went public, they'd raise 100 to 300 million. Okay, forget the Ubers and Facebook, stuff like that. But Most companies raise 100 to 3 million bucks in 20 and 21. They would go raise 100 to $300 million. These companies completed IPOs, you have to get them to. I mean like we've just like drilled in a couple of our companies that have, we have this. It's like you have to get to rule of 40 because that's the only way you're getting out. A strategic is not going to just come and buy you. This company's never going to go public. You need to get it to rule of 40 to sell it to a private equity fund. Like and by the way, I'm sorry, the last round was $3 billion. You're 120 million of revenue growing 18% a year. If we can get it to rule of 40, you might be worth five times revenues. You can try to pivot and pivot all you want. There are so many VCs that just like to like waste their time on company boards. We do not understand it. We're just like, listen, yes, we have a prep so we would get our 1X. But if you told me today I could take a 0.7x just to get out of it, I would happily cut you. I would happily do it. There are hundreds of these companies out there. The problem with the IPO market, the IPO market is actually totally fine. If you look at IPO performance of companies, they've actually done pretty well versus opening day prices. Look at Reddit's, look at some of these other things. The issue is like the good companies, the Grafana Labs, the databricks, like they have so much money, they have so much cash, they don't. The stripes, they don't need to go public. And then you have this whole other sector company that can't go public.
- [18:53]
Unknown
I'm going to make a contrarian statement. I do not think in five years the majority of companies that could go public will go public. Being public will be a unfortunate consequence.
- [19:03]
Mitchell Green
Of scale and that's really bad for the venture capital industry and LPs if.
- [19:08]
Unknown
We don't have a very developed or mature secondaries market.
- [19:11]
Mitchell Green
Correct. That is like very. Do you think guys like Don Valentin or Mike Moritz or John Doar, they would be like putting guns to these founders heads today and being like, you need to go public, don't be afraid of the 27 year old HBA Harvard Business School analyst, you'll be fine. And we actually think it makes companies better. I get both sides of the trade.
- [19:32]
Unknown
How does it make them better? You know, John Carlson said the other day, listen, if you are a public company or if you are a CEO and you think that having an analyst, analyst at Goldman saying oh you need to improve your margins, it's going to increase the discipline within your company, then you clearly do not have a great company.
- [19:47]
Mitchell Green
Look, there's two sides of it. Look, nobody says you by the way have to be a public company. Chanel, Tetrapac, Amway, there are big private company, Coke Industries. You do not have to be a public company. But I do think if you take venture capital money from people, you should be very clear on. Look, I think the stripe guy, I don't know him, but the stripe guys, I think very early on were saying like we don't want to be a public company. So like if you invest in us, just know that we very well that be public. I think if you're very open and honest with the investors, I think that's totally fine. There are two different ways. I've obviously the quarterly guide, the quarterly cadence of public companies is a little bit nonsense, nonsensical. However, I think if you go ask a lot of like Marc Benioff or like you know, the Google guys, did being a public company make them more disciplined? Did it like make them like prioritize one thing over another thing? They probably would say like, but it was a necessary evil. They had investors that wanted liquidity that they needed to get out. I do think like a company like Zoom went public because public companies they compete with were constantly like well Zoom, it's a tiny business. Like why do you, you know, like they use it as a negative where you can be like okay, go look at our balance sheet. But like I Do think the quarterly cadence is a little bit ridiculous, but there are some companies also just don't care as much about it and their stocks are going to be more volatile. And like we have no problem with companies that go public and want to have dual class listed stock. I've got one in transferwise over here.
- [21:09]
Unknown
Do you think that private market investors, venture investors are advantageously positioned because of asymmetric information and historical information to manage the book once it goes public? In other words, is Roloff and the Evergreen Fund the right structure or do you think it should be handed over to LPs and they are as well positioned?
- [21:29]
Mitchell Green
I believe it depends what you tell your LPs your mandate is. I believe most private market investors are very good company pickers. But like good company and good investment are two very fundamentally different things. Because of valuation and when you're a public company you can know on and off if you are a early stage investor when your company goes public, you should get off the board and sell the company because I suspect that's what you've told most of your investors that you do. You spend all your time picking small companies, grow them into big companies and they go public. Just get off and call it a day. Look, we are relentless in our focus of trying to make like 2 to 5x in 3 to 7 years and when we do it just like move on to the next company. Now again our business is not try like the early stage venture business is a lot of like trying to get hundred baggers and but you'd have a bunch of zeros as a result. That's just not our business. And we just feel like if you can cut the downside scenarios of the zeros you can generate like really good returns. Like look, people have always credited us with like very high like DPIs and it's just a relentless focus on selling. When I sell I'll always either sell too early or too late. Have I regretted selling too early? Yes, I've never regret like too late. Like I just think pigs get slaughtered at the end of the day.
- [22:42]
Unknown
I'm so enjoying this. A relentless focus on selling. What have been your lessons from a relentless focus on selling? And what does that really mean?
- [22:48]
Mitchell Green
We have a disposition committee at lead edge and we meet.
- [22:51]
Unknown
What is a disposition committee?
- [22:53]
Mitchell Green
We look at the portfolio. By the way, what's an investment committee? Investment committee is you sit and talk about companies that you want to invest in. You analyze. Should I invest in this company? Well, a disposition committee is the exact same thing, just in reverse. I'M already an investor in this company. How should we think about getting out of the company? Oh, there's secondary. Can we find secondary? Is there an early investor that might want to buy more of our stakeholders? Is there a crossover hedge fund that would want to buy our stake? Why might we want to sell? Because the company. We think the market size could be too small. We've lost confidence in the management team. There could be a whole list of reasons, but it's like we think there's a lot of really good funds that are really good at investing. We think there's a lot of people that are not very good at selling. By the way, I might blame LPs for this just as much as GPS. The LPs have to hold the GPS accountable. One of my longtime LPs refers to some VCs as pigs at the trough. It's like I ate the food and I spent all the money. Now give me more money to spend again. And they couldn't give you the third or fourth time if you haven't given a lot of the money back from the first or second time. There's just a lot of like. I think a lot of people in this industry are very complacent. All of us as gps need to do a better job getting money back to LPs and figuring out how to do it.
- [24:07]
Unknown
So you said there about disposition committee. And then I want to talk about like ventures place in a money manager's book because it's going to be too interesting. You said there about disposition committee. I'm often told that companies are bought, they're not sold. Do you agree and how do you reflect on that? Bought, not sold as the sentiment?
- [24:23]
Mitchell Green
Look, I've sold. I've had lots of returns generated by selling the companies, by putting them up for an auction and selling the companies. There are a lot of things a lot of companies don't do that they probably should do. It's very hard to get bought if your strategics don't know who you are. So we encourage all of our founders to get to know the biggest strategics in this space. Get to know the private equity funds that could eventually buy you. By the way, if you think you're going to do 50 million in revenues this year, up from 30, tell them you're going to do 40 and then beat the number. And it's just building relationships and partnerships with people.
- [24:56]
Unknown
I totally agree with you. Along the journey, building that. Mark Seuss always says lines, not dots. We mentioned there about kind of duration. You said like 2 to 7x in 3 to 5 years.
- [25:05]
Mitchell Green
We're trying to make 2 to 5x's in 3 to 7 years, which basically blends to a 20% net IRR curve.
- [25:11]
Unknown
Okay, totally makes sense. The thing that I hear there is duration. So I'm a money manager at a big endowment pension fund and I'm going, huh, with that duration. If we compare that to now a 15 year, what it will be duration for an early stage venture fund. I can compound my money with you three times over almost.
- [25:28]
Mitchell Green
Yeah.
- [25:29]
Unknown
And get that say blended, say 3 3x.
- [25:32]
Mitchell Green
Yeah.
- [25:33]
Unknown
Or I can go to a early stage venture fund which is now probably outsized in terms of actual size of fund and maybe get a 3x. Mitchell, I've seen the data. There is not many 3x funds.
- [25:45]
Mitchell Green
It's hard to do. We totally agree with you, by the way. We met some, we met some endowments like a couple years ago that said, oh, your lead Ed, your fund returns aren't good enough. All your funds aren't 3x net funds. I only invest in 3x net funds. And we turned, we left the meeting and we said to ourselves, should we go hire that guy immediately? Like, should we hire him to run our money? Please tell me where all these like 3x net funds are all run. It's a complete fallacy.
- [26:08]
Unknown
And so my, but my point is, if I can compound my money with you three times over and get that say 3x blended versus a hopeful 3x in a venture fund over a 15 year period. And this is my point, the duration is so long. How does venture earn its place in a lot?
- [26:23]
Mitchell Green
I think it's very hard. I think there's too many venture funds. My advice to guys and gals that go start venture funds. Have you ever interviewed or do you know Fabrice Grenda?
- [26:32]
Unknown
I've interviewed him twice. I really like him.
- [26:34]
Mitchell Green
So Fabrice has been an LP of ours for 15 years. Those guys have figured out the game. It's like invest in the cedar A and sell a bunch in the B or C. That is a fantastic game to play. And you can make a ton of money doing it. And you generate DPI back to your investors. You still get to ride your winners. The 15 year duration thing is totally true. And it's actually shocking that the number of venture funds over the last like five or seven years has actually increased given that the exits are getting longer, not shorter. What I believe like emerging managers and people starting venture funds need to do is take advantage of the secondary wind of the secondary markets and the fact that these growth funds have gotten so big or the crossover hedge funds that want to get or the public funds that want to get into private investing and start selling off stakes, do the seed, do the A and sell some in the B or C. But you're not selling the whole position just like start to return money back to people.
- [27:27]
Unknown
I get you. But then I also think oh, because I just had a GP on from emergence. And he basically outlined the different fund returns they had had they sold or not sold positions. And bluntly they sold their salesforce position at ipo. And had they not, they would have made another. I'm butchering it. But 20 to 30 billion in gains Bessemer sold their Shopify position at IPO lost billions. My point being that with your mention of Fabrice and selling at the bc. Sure. But actually if ventures are power law game.
- [28:01]
Mitchell Green
That's true. Yeah. So I take it. But by the way, you got to stay in business. And so I think the faster a venture fund can get to a. If you could get a venture fund that could get to a 1x faster than other funds, that fund could probably grow assets quite a bit. And I'm also talking towards emerging managers as well who like need to stay in business and you know, need to raise funds. 2, 3, 4 and you know, are not people like Bessemer that have been in business 80 years. And by the way, for every Shopify go ask them about you know, 1999 and 2000 or like how many billions of dollars were lost in 202021 by not distributing positions.
- [28:36]
Unknown
You said about stupid stuff in 2122. We did. Obviously everybody did. What was your most stupid and what do you learn from it?
- [28:44]
Mitchell Green
Our stupidest mistakes were just like overpaying for a couple of companies assuming the exit multiple was going to be like higher than it actually is, you know. And I credit my partner Nime, you know, who's been with me since the beginning with really in like 2018 or 19 we really started to shift our our business away from Silicon Valley based companies and needing to say every company needed to ipo. It was go find these gravities, go find this safe send.
- [29:11]
Unknown
What caused that? Because I go through your fun ones, dude, and it's like your Alibabas, your Spotify is your Uber's fantastic companies but all venture.
- [29:18]
Mitchell Green
Yeah, yeah, yeah. It was caused by the fact that we looked around and said there's no possible way that every one of these companies can grow to be as big as they are. The law of compounding when you're investing over a billion or $2 billion of revenue, or sorry, a billion or 2 billion evaluation, it's just like harder. It's just like the law, the law of large numbers. And we also just looked and we're like, who's got money? Mid market private equity funds. And there's hundreds of them. And we were like, none of these guys used to buy software companies. They're now starting to buy software companies. So now we have like a fertile ground. And if you think about a lot of these mid market private funds, their portfolios grow 7% a year, 6% a year. Top line revenue growth, industrial companies, manufacturing companies, now they have sleeves to buy software companies. Wait a second for us. We'll go buy a company that's 40 with 30 million of revenue, 20 million of revenue, growing 40% a year. Let's grow it, let's 2 to 2 and a half, 3x the revenues and then it'll be growing like 15% a year. That's like fast. And we can run an auction, we can sell the business and we'll get 20 people that bid for it.
- [30:20]
Unknown
So this is my point. So actually those companies growing mid teens with 50 to 100 million in revenue, there is an exit for them.
- [30:27]
Mitchell Green
No risk. They just need to pivot the business and realize they're not building the next data dogs and snowflakes and they need to get them to rule of 40. And the most important thing getting the rule of 40 is high gross margins. If you have high gross margins and you have 90 plus percent gross dollar retention, you can try to sell it when you're losing money, break even. Or what some of these growth equity firms and venture funds should do is do it themselves. Like it's not that complicated. It's like, look, you have high retention rates, you know, if you have low retention, like good luck, you know, if you have 70, 75, 80% gross retention, it's much harder. But if you have a 90, 95% gross dollar retention business. Yeah, like make the hard decisions, get the thing to profitable, turn it into rule of 40.
- [31:05]
Unknown
So you said, hey, one of the mistakes was we paid up for things a little bit too much. How do you determine between a stretch on price and a mistake that we stretch too far?
- [31:14]
Mitchell Green
We build a five year model, the model is wrong, we try to put a reasonable exit multiple on it.
- [31:20]
Unknown
Is that valuable to do? And what I mean by that respectfully is like exit multiples vary so much over different durations. If we look back at 20, 21, 22, the multiple would have been so much higher versus today so much lower. I don't know where it's going to be.
- [31:32]
Mitchell Green
I think you need to use like some reasonable revenue. Multiples of software companies are just shorthand for ebitda. Like it's not. At the end of the day, I think you should assume if you, if you build a software company and you're in it, you know, and it's growing, you should assume an exit of it's growing 15 to 25, 15 to 30% a year. And that should trade somewhere between four to seven times revenues. Like we tend to like I think our bands that we tend to assume most exits at are like four to eight times revenues, maybe sometimes 10 times at the absolute highest. If it's like growing 30, 40% a year, by the way, I credit the guys at Iconic a huge amount. I mean look, they were underwriting deals in 15, 16, 17. I think they thought they'd exit stuff 10 to 12 times revenues. And so they bought the best assets and they maybe paid 20% higher to get access to the best assets. And then multiples went to like 20 to 30 times. The best way, by the way to 4 extra money is 2x your revenue and 2 extra multiple by the way, the reverse happens too. So that's what's happening to all the stuff in 2021. Vintage funds. Multiples got cut in half for people. And so if you 2x your revenues and half your multiple, that's called a 1x.
- [32:41]
Unknown
What is the stupid stuff that we are doing today that not many are.
- [32:46]
Mitchell Green
Talking about paying 100 times revenues for companies? You know what we like to ask ourselves when we look at businesses? If I invest today and I grow it for 18 months and I assume like it's still growing fast, am I like kind of in the money or do I need to grow for four or five years until I even get in the money? Like if you, I think in Toast, for instance, it was like when we invested in 15, 16 time, ish. 17 time frame, it was like 25 of revenue growing 250% a year. That would be a billion dollar plus valuation. Today we paid 20 times revenues. It was like $500 million valuation. That's pretty expensive. And we think about it, we're like, okay, in a year from now, we're in it at like 10 times okay for that growth rate. That's like seems pretty reasonable. I think I encourage people to ask like okay, I pay this price today, in 12 months, am I in it still at like 80 times revenues or 50 times revenues. The prices being paid are totally insane. I also think not enough investors. I've had numerous entrepreneurs tell me, oh, I don't look at gross dollar retention nets the only thing that matters. And it's like, oh really? I think more investors need to focus on gross dollar retention.
- [33:51]
Unknown
Why?
- [33:51]
Mitchell Green
So okay, if you've got a business that ends at the end of 2024 at $10 million of revenue and I've got 200% gross dollar retention, so like okay, my 10 became 20 all to existing customers. But you only have 50% gross dollar retention. You actually lost half your customers. And yes, you had a few that really liked it. But that means a huge amount of it are like experimental. When you have a really small company, a difference between 90% gross dollar retention and 50% isn't that much because it's not that much of the pond to fill up or the bucket to fill up. But when you get to like 100, 200, $300 million of revenue, it's a huge hole in the bottom of the bucket which just then leads to that, you know, sales and marketing efficiency is just awful. And your burn rates are much higher, not enough people. And like we look at a lot of these AI software, tons of these AI software companies and like the gross dollar retention rates are just like really, really low. It's actually like shocking.
- [34:43]
Unknown
Pretty much all of them are not.
- [34:45]
Mitchell Green
Every one of them, like not every.
- [34:47]
Unknown
One of them lovable's got 85% which is pretty good. It's better than ChatGPT.
- [34:51]
Mitchell Green
But again it's not, it's not 90 growth. By the way. We have a business in our portfolio by the way. It will not change the world. It makes cardiac monitoring software. It is a very small market. It has 99% gross dollar retention. It just means that you can run the business very capital efficiently over time because you don't have to keep spending money on more and more sales and marketing.
- [35:10]
Unknown
How do you think about that kind of capital efficiency and future dilution element when investing? As we said earlier, Uber and your Alibabas, these are incredibly cash consumptive businesses. And now you fund businesses which are incredibly cash efficient. Lean machines.
- [35:27]
Mitchell Green
Yeah. So Alibaba was very cash efficient actually when we invested it was a billion dollars of profit. Actually there may be less shares of Alibaba. I credit Josiah and the team at Alibaba has actually like done. The amount of stock based comp dilution for a lot of public companies is totally crazy. Most people, including ourselves over the last 15 years massively underestimated the amount of stock based comp dilution and dilution that we all took. You know, Uber was, Uber's was, was totally insane. We tend to over the last few years we've dramatically increased the amount of dilute. We assume 20, 30% dilution. And if you're investing earlier, it could be a lot more than that. We have this what we call capital efficiency. It's like Warren Buffett would laugh at us because it sounds kind of stupid, but it works. Are your revenues today greater than your historical cash burn cumulatively not raised. If you've raised 80, but only burned 20 and you have a $40 million revenue business, that's a great business. But we're looking for like a one to one ratio or better. We just think it speaks to so many just qualities of the business. Like we were lucky to be investors in benchlane. We're still investors. When we invested benchmark like did the early rounds, thrive as an early investor. When we, you know, it was like 13 of ARR growing, you know, well north of 100% a year.
- [36:46]
Unknown
That must have been expensive.
- [36:47]
Mitchell Green
Yeah, it was expensive. It was like, I want to say in the low threes. It was expensive. However, the company had only burned like $10 million and had earned very little capital. And why? Because it had like amazing gross dollar retention rates and the CEO was just like he thought a lot about, you know, I know when it got to 20 million it had not burned 20 to get there. They just value the value of a dollar. You now have a lot of entrepreneurs that just like, like to light my amphitheater, by the way. I'm not saying some of them will build amazing businesses, but we have definitely missed businesses that were not capital efficient. It's just like it wasn't for us.
- [37:19]
Unknown
What business most sticks out to you with that in mind?
- [37:21]
Mitchell Green
That we missed Snowflake. Massive. I mean when we looked at stuff like it had like horrible gross margins. Like again it was. We looked at it at $500 million and like we were completely wrong. Like just like 100% wrong.
- [37:32]
Unknown
How many businesses actually though have that perfect profile that fits yours? When you look at as we said, your Ubers, your doordashes. Doordashes.
- [37:42]
Mitchell Green
We looked at it in past. Yeah. So like it's fine. Again we're going to miss stuff. It's fine. But again we have a framework. 100 out of 10,000 companies will meet all eight criteria. Now a lot of those hundreds evaluations would be totally insane if you can even get in them. Or if they even want to take Money out of 10,000 companies, 10% will meet five or more criteria.
- [38:00]
Unknown
Now, with respect, we live in such an interesting asset class because it is one where the supply chooses the demand. In other words, the company chooses the source of capital in a lot of cases. My question to you then is, okay, we find one that meets all the criteria, they then have to choose you. If they meet all the criteria, they probably have a lot of options. With absolute respect, Mitchell, you're not a romantic around company creation in the way that a lot of Silicon Valley VCs are or the way other investors are. Do founders resonate with the kind of financial founders want?
- [38:33]
Mitchell Green
So our pitch is very simple. It's the reason that a huge number of our founders have invested in our funds.
- [38:41]
Unknown
Post exit, the founder of Duo responded and then DM'd me after I tweeted about having you on being like, amazing, amazing. Now I'm an lp, it's even more amazing. It was cool to see.
- [38:53]
Mitchell Green
So it's like, what do we do? Why is that? When we started Lead Edge, my partner Nimi and I, because Brian hadn't even joined yet, sat around and we're like, I said we'd take our two knuckleheads money, why are they going to take our money? And we were like, well if I had been the global head of HR at Pepsi and Nimei, you had been the global head of HR at Microsoft or Dell. Pick a company. We could probably cold call HR software companies to be like, hey, let us invest in your business and we'll introduce you to a bunch of global HR execs. And that'd be like, probably pretty believable, right? We don't have that. We had never been the global head of HR of anything or we had never done anything except like cold calling analysts. So we thought like, well, how are we going to get into companies? And we thought, let's make our competitive advantage be our LPs. So let's raise money from world class execs and entrepreneurs. And so like if you look on our website, 80, 90% of our LPs get permission to be listed on our website. And these are people who run and have built some of the world's largest companies. These are people like the former CEO of Charles Schwab, the former, the former CEO of Kimberly Clark, the former CEO Colgate Pamolov. And we go to companies and say the following. If you invest with us, we'll give you access to our LPs who have built, run and advised Some of the world's largest companies. So hey, you are a software company that sells into the pharma bio space. You sell R and D software. Well, hey, would you want to meet the former CEO of Pfizer? Would you want to meet the former CEO of Biogen? And we, by the way, we introduce them during our diligence process. They act as our own version of McKinsey. That helps out. That's how we get into deals and that's why people like us.
- [40:20]
Unknown
That is a model though now that's used by a lot. I have, I don't know, $65 billion founders in our funds. That less kind of traditional company, much more software led founders. And I use that as a weapon, so to speak to win. But I would say founders are like yeah, that's great but by the way, index have that too and definitely Sequoia do. And all the great firms have this kind of armory or weaponry of great, great entrepreneurs who are invested with them. To what extent is that differentiated?
- [40:50]
Mitchell Green
A lot of ours aren't entrepreneurs. They're executives at plain boring vanilla non software companies. We just constantly leverage them. We can track introductions, we track every intro. Everybody says they help. Very few people do. I think there's a reason that like you know, 80 plus portfolio company, former, former and current portfolio company execs who we've backed are investors in our funds. So like I don't know, everybody says they help. We just do what we say we were going to do. It's just not that hard.
- [41:17]
Unknown
Dude, I love it. You said about tracking interest that you had a very viral tweet and I can't remember who did it. I think it was Pit Dassey Shill Monas who kind of tweeted your criteria around how companies do reporting, you know, hierarchy of bullshit.
- [41:30]
Mitchell Green
Yeah, CEOs lie to us.
- [41:32]
Unknown
Yeah, but we'll go into how CEOs lie to us. But one of the ones where when funds like you know, fudging numbers, they track intros.
- [41:38]
Mitchell Green
I thought what so like we are, we believe so like we can give. There's a reason that Doug Song, who sold his company for two and a half billion dollars put money with his fund because we drove tons of intros. There's a reason that VCs are some of the biggest venture funds on the planet are longtime investors with us. They've seen us in action do it. I don't know why more funds like say they have these incredible networks don't help people. More like I have no idea why. I have a feeling A lot of funds.
- [42:07]
Unknown
Scale.
- [42:08]
Mitchell Green
It's scale. And also a lot of people are just like, a lot. So a lot of our LPs are execs who are plus or minus five years away from retirement. They've been retired for the last five years or they're about to retire in the next five to 10 years and they want to help. Like, a huge amount of LPs are not from Silicon Valley. And so we find him a company and we get them involved early on in the process. It's how we do diligence. And so if like you are a payments company, like we invested in transferwise over here, we very early on, before we invested said like, listen, would you want to talk to the former CFO of PayPal? Would you want to talk to the former president of Visa? And any good entrepreneur is going to be like, that sounds like interesting people. And then we called them and asked them, hey, what'd you think?
- [42:50]
Unknown
How do you manage that from an infrastructure perspective? Because that sounds amazing, but it's difficult.
- [42:54]
Mitchell Green
It's a lot of work.
- [42:55]
Unknown
Yeah, it's difficult.
- [42:56]
Mitchell Green
So look, every intro we make, I wish I could tell you that it's automatically locked. No, we bcc an assistant and it gets logged in Salesforce, it's a highly customized version of Salesforce that, you know, we've built, spent millions of dollars on customizing over the last 15.
- [43:12]
Unknown
Do you have heads of network and network managers and community managers?
- [43:16]
Mitchell Green
What we have is every person, if you've worked at Lead Edge, if you work at Lead Edge, like every person on the investment team has access to all the LPs. And by the way, to be clear, if you're an associate who's worked here for two years and you're going to Seattle for a wedding and you say, hey, I want to stay on Monday, we'll be like, wonderful. You should meet like these four LPs. We'll pay for your plane ticket. We encourage everybody that works at the firm to get to know our LPs, spend time with them, educate him on what's going on in the portfolio, versus if I was like a vice president, I'll pick on Index, but I can pick any firm on the planet. If I was a vice president at Index and I was flying to Seattle to meet a company, I would go meet the company, I'd go meet maybe another prospect company, and then I'd fly home. I wouldn't be spending six hours meeting four other individuals who are LPs in index. It's not their model. It's like these funds are primarily backed by Natural, the largest endowments and pension funds in the world. And our model is like we're going to be 95% backed by individuals and we're going to treat those individuals like gold.
- [44:17]
Unknown
Quite A lot of VCs today say that founders are our customers, LPs are not our customers.
- [44:23]
Mitchell Green
I would tell you that we have two customers, founders, but more importantly LPs because if you do not have LPs you do not have a business.
- [44:32]
Unknown
I 100% agree. I think, I think, I think it's really arrogant to suggest that they are not your customer. I think there's two customers, as you said, founders and LPs. But I'm astonished by this unwillingness to recognize them as customers that we have to provide a great product for.
- [44:47]
Mitchell Green
So like we run our business trying to figure out how do we have 97%, how do we keep up 97% gross dollar retention, not net gross. With LPs if you think that, what do you do? So we communicate with them. We do lots of events with them, we do quarterly calls, we walk people through the portfolio, we tell people how things are doing. Look, some companies are going to be doing well 1/4, some companies are going to be doing bad one quarter. But again, when you grow 30% a quarter on average, like some are going to be doing well, some are going to do them bad. But just like the lack of transparency in this industry to LPs is shocking.
- [45:21]
Unknown
To what extent do you think your reup rate is determined by your engagement? Community communication versus performance.
- [45:28]
Mitchell Green
It's both by the way. Without good performance you can have none of it. But I can tell you that people. Here's the thing though. People want the nice guy, the good guy, the person who communicates to win. So like if you have a bad vintage or two bad vintage funds, they're.
- [45:46]
Unknown
More likely I think to stay with you 100%. And that line's not dots. Again you said there they like, you know they won't come back without the performance. Wrong.
- [45:54]
Mitchell Green
They do. They do it. We've seen there are. I'm not going to like talk about. There is a very well known, very large private equity fund that historically would raise their. It's not in software would raise their funds and literally be like the LPs. You have three weeks to get your docs in. Take it or leave it. These are the terms. We're not changing anything. They then had a bad fund vintage. They've been in the market for three and a half years. The fund they just closed is like a fraction the size of their fund before. And I asked him LPs, what's the problem? He's like, you know exactly. The problem is they're jerks, your LPs, like, they give you the money, like without you, they're paying you like it's.
- [46:26]
Unknown
I don't know, I get you. But we've seen a lot of funds like returns or performance numbers leaked in recent months. I'm not going to name the funds because I don't want to bloody pick them out. And their numbers have been poor mid teens, IRRs, at best, at best for early stage funds. And they have scaled AUM and had a excess supply of LP cash. Is performance even relevant?
- [46:51]
Mitchell Green
That's why LPs are to blame too for a lot of this.
- [46:54]
Unknown
I have many LPs come in this office and say, hey Harry, I have 500 million a year, where do I go? And I say, well we go to these tier ones, but you can only get 20 in each and so there's 100. And then they have 400 left and they go, so see, I've got to put 75 in x multi stage firm. I just have to, it's my budget.
- [47:13]
Mitchell Green
The smartest ones I find are actually like, listen, if the opportunity is not there, let's go figure out where else to put it. It's not like I have to put a billion dollars in venture every year. Maybe billion dollars of venture is too big, I should be doing smaller. I think there's a guy, Eric Seabush at Mercer, who runs research there, who took a bet on us very early ON Before Fund 3, people would like laugh at it. Actually our first institutional Investor in Fund 2 was University of Virginia. And we literally started the meeting with, you're not going to invest with us, why would you invest with us knuckleheads? We don't have a brand, we have nothing. And a lot of the investment consultants are very brand name focused. It's like, again, you don't get fired hiring IBM, hiring McKinsey. I credit this guy Eric Sebush with like taking a flyer on us very early. And he's done it with a bunch of other young managers. This is all about the people. And he like digs into, okay, I'm in your fund 3. Why'd you exit these things in fund 1? How'd you think about it? How do you think about returns? How do you think about treating LPs? Talks to a bunch of like portfolio companies. Like, how do you actually add value? We tell LPs, everybody tells you they help companies. Wonderful. Let me go introduce you to 10 companies in our portfolio. Call as many people as you want and ask them if we add value.
- [48:23]
Unknown
But respectfully, when you look at someone like Andreessen, they have proven brand is more important than performance at scale.
- [48:30]
Mitchell Green
Well, let's see over the next 20 years, let's see over the next decade what happens. But you're right, by the way, they're far richer than I am.
- [48:35]
Unknown
So does that make you change your perspective on the importance of brand or you just go, fuck that. We stay in our lane and we do that.
- [48:41]
Mitchell Green
We stay in our lane. So I have a huge amount of respect. There's this amazing.
- [48:45]
Unknown
Sorry, I mean this so nicely. Is you ego a little bit hurt because your performance is here?
- [48:50]
Mitchell Green
Nope. No, But I respect a firm. Probably one of the best returning funds in like the tech investments. There's a couple of them. One of them is Spectrum Equity. Incredible investors. They've kept two to two and a half billion dollar funds forever. By the way. Benchmark funds are smaller now. Benchmark has had like what's incredible benchmark is it's like you had Gen 1, Gen 2, and now you have Gen 3. And they still continue to put up really good numbers. They've kept it small. Josh Koppelman at First Round has continued to stay small. Mike and Ann at Floodgate have continued to stay small. But the firm that I think has generated the best returns in the tech investing world over the last 30, 40 years. And it's become more a buyout fund. But they used to do tons of minorities, TA Associates and look, it's gotten gigantic huge funds. But the DPIs that they put up are just incredible.
- [49:37]
Unknown
But Spectrum, what do you think they do that makes them so good?
- [49:40]
Mitchell Green
They're relentless in thinking about how to get liquidity to LPs. So a lot of stuff they do in the buyout world now is like they'll do minority sales. They'll invest In a company two years later, sell 30% of the company to somebody else, get their bait back. So they sit not already a 1x. They're just like relentless. Focus on liquidity. I think some of these giant platform funds, the Andreessens of the world, there's just so many people at these firms. I have no interest in having like hundreds of employees. You know, we have 80 employees and that's plenty.
- [50:08]
Unknown
Do you think Venture Douglioni said on the show to me that we've moved from a boutique high margin community to a commoditized low margin industry 100% agree with them. Do you think that is irreversible is the platformization now venture it is matured to this asset class because the hard thing also for me is the cost of capital is so different. So I lost a deal recently to one of these large market. I did three on 15 handshake was the founder. It was pre product, pre revenue, pre everything but amazing founder. And he called me up the next day. He said I would never walk out on a handshake. But I got offered 8 on 100 and it's uncapped.
- [50:43]
Mitchell Green
Yeah, these bad returns will do it over time, but it's going to take a long time. I think the venture industry was about to be in for a rude awakening and then AI showed up.
- [50:54]
Unknown
I always say AI was the oxycontin that we needed.
- [50:56]
Mitchell Green
Yes, I think that's a for a lot of these venture funds. I think that's true. Again I love to talk to people that have been in this industry longer than I've been alive. This what's going on in AI looks very similar to the Internet bubble and it's like people didn't learn a Damn thing from 20 and 21. It's like shocking. Let's not even talk crypto because that's like a whole nother.
- [51:15]
Unknown
Specifically what should we have learned? Entry price matters a lot. Don't over capitalize companies.
- [51:21]
Mitchell Green
Bingo. Yeah. Entry price matters. Don't over capitalize companies. The amount of stock dilution really really matters. If you run a fund where you need IPOs, you better invest in founders that want to IPO their companies or have a good plan how you're going to get a lot of secondary out of it. It's entry place matters. Entry place matters a ton. These companies are not all snowflake and Facebooks. Like they're not the vast majority of companies. I put on one hand the amount of people that are capable of backing companies like Google's and Facebooks of the world and doing it more than once. It's a really, really, really small group. It sure as heck isn't me. It's like the Doug Leone's of the world and there just aren't many of them.
- [51:59]
Unknown
I love Doug.
- [52:00]
Mitchell Green
No, it's just like we need more Doug Leone's and Don Valentines and people that are just like in LPs that are like very direct and outspoken people like Peter Dolan at McKenna used to be at Harvard and like if you were to.
- [52:13]
Unknown
We have, we have hundreds of thousands of listeners and several thousand LPs.
- [52:18]
Mitchell Green
Yeah.
- [52:19]
Unknown
If you do advise them something on investing in managers today, it can be anything. What would you say?
- [52:24]
Mitchell Green
I believe a great question that people don't ask that they should ask any manager who's been around 10 plus years. Hey, in September of 21, September 30th of 21, how much unlocked stock did you have in your portfolio? And let's say September was like the high point of the insanity in the last tech run up, how much unlocked public stock did you have in your portfolio? And the next question is, why didn't you distribute it to your LPs? And by the way, a lot of funds can distribute stock too. And like you could have kept the stock. So like why didn't you hold? Some people will be like, well I was on the board. Well shouldn't you, I mean like isn't your goal just to return like returns to LPs? Isn't that like the whole job of the business?
- [53:04]
Unknown
That would be a shocking amount of people that have a lot of unlocked that did not return money.
- [53:07]
Mitchell Green
Did not return money. Look, I also think LPs should spend more time talking to companies of portfolios that failed. Like actually talk to the ones that didn't go well or like were the one X's to find out what is the person really like to work with. The ones that work really well, those are the easy ones. Tell me the stuff that didn't work and like how did you, how was the, how was the partner on the deal? How did they respond? How did they deal with adversary? How did they like deal with you? Those are the things I like to focus on.
- [53:36]
Unknown
You said, hey, if I get the chance to take a 0.7x back on an underperformer, fuck it, I'll take it all day.
- [53:41]
Mitchell Green
All day long.
- [53:41]
Unknown
All day long. How do you feel about the transactional nature of where time is spent? Your Fred Wilson's of the world, who is an incredible investor. Incredible, incredible.
- [53:50]
Mitchell Green
He'd be in that five, of course.
- [53:52]
Unknown
Completely agree. But he always says like reputations are made in the bad companies. And then you also have the realization that I have a limited amount of time and I have to manage a portfolio and invest in new companies. Is it possible to bluntly cut your losers elegantly, to concentrate on your winners?
- [54:08]
Mitchell Green
It's a lot easier for me to do it than it is for Fred because he was there when it was. It was nothing. I came in as it was a bigger company. But again, there I think are some VCs that are like world class VCs that cut their losers. There are firms that are known to. If you're a CEO and you don't perform, you probably won't be the CEO. But I think if you just the founder coming in, you should just be like, I have no problem. I tell all my employees if I'm not the right person to run lead edge, like throw me out, like that's fine or put me on the side. You come and run the business.
- [54:36]
Unknown
You mentioned ByteDance? Yeah, we had the head of privates from Baillie Gifford actually in yesterday who are big in ByteDance. There is a lot of public concern in the US or excitement. Whichever side you sit on that TikTok will be shut down or kind of divested. You said before you're not worried about that.
- [54:53]
Mitchell Green
When we underwrote ByteDance we assumed the US business is worth zero. ByteDance North America is a single digit percentage of revenue. We assumed it would be shut down and it's not profitable in the United States. Then we saw actually what happened when they shut it down for a day and both sides of the aisle came running up with their, you know, bag saying oh please, please keep it open, please keep it open, please keep it open. We just want something to happen. Either shut the thing down for good or spin it off or do something. I suspect it's not done by April 5th or whatever the date is. They'll probably push it out again. I'm not saying I don't know. I think there's four or five people in the world that know what's going to happen and well, time will tell. But again, it's like just the uncertainty. I do think this though that the Chinese government actually really likes ByteDance. It's a truly global business. Alibaba is not a truly global business. Tencent is not really a truly global business. Nike is a truly global business. Microsoft, John Deere are global businesses. What I mean by that is you can go into, I don't know, 140 countries around the world and buy Nike shoes. Probably go into 100 countries around the world and buy a John Deere tractor. China's always wanted to build a truly global business. This is that first truly global business. Like they're very proud of what they built. It's a huge business. I think they're going to be one of the foremost AI companies on the planet over the next decade.
- [56:08]
Unknown
What makes you say they'll be one of the most foremost AI companies?
- [56:10]
Mitchell Green
There's a reason when the amount of AI they have already embedded in the product in India when they were kicked out several years ago. Nobody's really building to build a competitor in India. I mean, Facebook's trying. By the way, you know who hates ByteDance, right? Mark Zuckerberg. And by the way, so would I. To be clear, I would be. If I was running Snapchat or Instagram or Facebook, I would be all over politicians in Washington being like, oh, this is horrible. This is all propaganda. This is like, you got to get these guys out of here. It's the biggest threat to these companies. Absolutely incredible what these, what these Chinese have built. The Chinese, I mean like if you look at all these stats, like number of PhDs and science spend and all these things, like is a incredible country that is like they're not worried about what happens next quarter or next year. They think in 50 year blocks.
- [56:56]
Unknown
Do you think we as the west underestimate China's ability in AI?
- [56:59]
Mitchell Green
100%. I just have seen how hard people in China work at some of these tech companies.
- [57:06]
Unknown
I agree with you. And as a result I get concerned. Do you get concerned by their ability to infiltrate our societies and provide amazing products?
- [57:17]
Mitchell Green
I think both countries should learn to get along a China and us collaborating together. More is better for the global world than less. There's lots of things like both countries can do together to make both countries a better place.
- [57:30]
Unknown
Peter at Beta Gifford taught me actually the strength of the core ByteDance business in China. I know it's a global business, as you said, but the core business in China, monster.
- [57:39]
Mitchell Green
And by the way, it's a huge E commerce business there too.
- [57:41]
Unknown
Unbelievable. But we all think like, oh, TikTok shutting down in the U.S. it's over. It's terrible. And not really at all actually.
- [57:46]
Mitchell Green
Exactly.
- [57:47]
Unknown
My question to you though is if it is more domestic focused. I just don't understand where liquidity comes from. It is not going to list in the US clearly.
- [57:55]
Mitchell Green
Hong Kong.
- [57:56]
Unknown
Hong Kong.
- [57:57]
Mitchell Green
Hong Kong for sure. Like by the way, 10 cents listed in Hong Kong. It's gigantic. Hong Kong 100%.
- [58:01]
Unknown
And that's feasible. I'm naive.
- [58:02]
Mitchell Green
Oh, 100%. Yeah, but like Tencent's a huge company. There's giant Asian businesses listed on the Hong Kong stock exchange. It's very liquid. You could have a trillion dollar. Like by the way, I don't know what Facebook stock is. Market cap is yesterday. But I think it's like a 15 to 1 $7 trillion company. This is the same size business in terms of earnings grows faster. And I mean like Alibaba and Tencent don't really grow that fast. I mean they're like 5, 7, 8% growers. What do they trade it? 13, 15 times earnings. You do the math. Like this is a very, very big company. We like to buy stuff when no one else likes to buy things. Like when the world hates something. One of my longtime LPs.
- [58:41]
Unknown
Does that not go against your statement though? Of the best founders are not the ones calling you back.
- [58:46]
Mitchell Green
That's fair. That is a fair statement. I just think that because I struggle.
- [58:50]
Unknown
With that statement too because I have so many great entrepreneurs in here from the founders of UiPath and the founder of Klaviyo and go on and on and on. Toby at Shopify, he gives me, dude, I have like 50 VCs. Were like, nope, nope, nope, nope, nope, nope, nope. And actually it is the opposite. They were cooling. They were cooling.
- [59:06]
Mitchell Green
Yeah. Look, for every Toby at Shopify, there's 100,000 founders that are like there aren't going to make it. But look, it's incredible what he built.
- [59:15]
Unknown
Can I ask, final one before we do a quick fire. What's your favorite deal? You've done many deals, what's your like, that's my favorite. What did you learn from that?
- [59:25]
Mitchell Green
Favorite deal is buying like LPs out of a 20 year old fund and buying something like at four times earning. I mean find something like at four times earnings you buy fund positions 100%. So like this, you do strip sales. Let me explain. So the company I'm going to get to is this company called Work Human. That's where we're going to go with it. There's a table in front of us, right? Let's say this table is a company. If I buy 10% of this table or 60% of this table, it's the same table, right? If you own the table but the chair you're sitting on and if you're the fund and you own the table and the chair you're sitting on owns half your fund and I buy the chair. I just bought 25% of the table. So we just view it as buying it to a wrapper. So we describe investing in companies is we have these very specific criteria. Then we take this completely flexible approach. We'll go through the front door. Let's think of a house. You're walking down the street, you see a three criteria house, walk by it, see a four criteria house, walk by it, get to a six criteria house, knock on the front door, you can go in the front door and you can lead around in A minority deal. You can go in the front door and buy the entire business. Well, let's say they don't want to raise capital. You can go in the side door and buy out an early investor or an early employee in the form of secondary. Again, it's still the same house, but let's say that doesn't work. Let's say you can't buy secondary for a whole host of reasons. It could be rovers, it could be there's no sellers whatever. Well, let's go through the basement window with a pickaxe and let's find a derivative. Let's fund somebody's co investment vehicle. Let's find some 20 year old fund where 90% of the NAV is in one company. So this example, this company, Work Human is an awesome business up in Boston. It's been around 20 plus years, it's insanely profitable. It doesn't grow 50% a year. It's a giant stable business. I'm going to totally get dates wrong, but it came out of a tooth. We met the company, there was nothing to do, there was no, the company didn't need primary capital, it was super profitable. There was no secondary to buy. So we found an old fund that was 17 years old and we went to the founders and said, look, the fund, you must have like a bunch of LPs that went out. You've been in it 16 years, right? I mean we bought it at like the position at like five times earnings and we've gotten 90% of our money back through dividends in the company. And you're like, well how'd you do that? The LPs were in the fund for like 15 years, they just like wanted out.
- [61:48]
Unknown
So there are these unique opportunities I find in business where it's this arbitrage on timing.
- [61:53]
Mitchell Green
Correct.
- [61:54]
Unknown
And that is the most special time ever when you have a manager who desperately needs liquidity to get a fundraise and they know that it is inopportune to sell, but they need to to get that next fund.
- [62:05]
Mitchell Green
Correct.
- [62:05]
Unknown
And for you your duration is different.
- [62:07]
Mitchell Green
Correct. And so we were like in a world where LPs and GPs are looking for liquidity, fishing in the pond of old funds, like 20 year old funds. People are like, well what's your discount to nav? Nav's irrelevant. What's fair market value? If like NAV is really cheap, I'll give you, I'll pay you 100% over NAV. But I can't do that because then the LP would think oh, you know More than I do. So I'll pay a discount to nav. Still.
- [62:34]
Unknown
Do you worry that everyone is doing that now?
- [62:36]
Mitchell Green
It shocks me that more people don't do this. There's not that many people doing it. The secondary funds, because they do gauge.
- [62:42]
Unknown
That gorgeous out on price.
- [62:44]
Mitchell Green
A lot of people are going after the multi asset stuff. So you'll buy an LP that's selling 30 positions in 30 old funds and there's 200 underlying companies or 500 underlying companies in it. We're looking for the stuff where there's like one underlying company and as an old fund. 90% of NAV is in one company and we just write off the other stuff. Basically I just look at it.
- [63:07]
Unknown
Got you. So you buy the basket, discard the 10%.
- [63:10]
Mitchell Green
Exact.
- [63:11]
Unknown
Have you ever been surprised on the 10%?
- [63:13]
Mitchell Green
Yes. We got back 50% of our money on a 10% in this fund and we're human. Yes. It was some like chips company that literally were like the cash balance on the balance sheet is like almost as big as their valuation for the entire company. This doesn't make much sense. I don't know. I don't know what this thing does. Whatever, maybe it'll be get something back. We got 50% of our money back.
- [63:34]
Unknown
Wow, I love that. Listen, I want to do a quick fight. I've so enjoyed this conversation. So let's start with what do you believe that most around you disbelieve?
- [63:43]
Mitchell Green
DPI is the most important thing and marks are completely for suckers.
- [63:46]
Unknown
You can buy and hold one public stock for 10 years.
- [63:49]
Mitchell Green
Microsoft. Why the pricing pressure? The pricing power they have is absolutely incredible.
- [63:54]
Unknown
You don't worry that there's no upside left given how richly priced they are?
- [63:58]
Mitchell Green
Look, it is expensive, but it's just an incredible business with amazing price power. I think they have an. So you asked me who I thought was the best CEO I saw on that list? I think Sashi, as I said, absolutely incredible CEO. It's a giant business. There are companies in like a downturn. If we could get a 30% drawdown, like I would buy Snowflake or buy Datadog and put it in, you know, put it in a drawer and let those compound for 10 plus years. I mean Amazon, you could put in that bucket too. Just a lot of them are fairly rich.
- [64:25]
Unknown
What's the hierarchy of BS that companies report?
- [64:28]
Mitchell Green
Oh, favorite place to work if like on the second page of your like presentation. If you're like, you know, we're the greatest place to work, you know, in this region. But A lot of it comes down to like, they'll be like, oh, my revenues are this. You look at the chart, you start doing all the analysis and you're like, actually that was your total contract value. That's a pretty good one. There's a lot of ways to fudge gross profit numbers.
- [64:50]
Unknown
What have you changed your mind on in the last 12 months?
- [64:52]
Mitchell Green
Oh, self driving cars, actually. Self driving cars, what have you changed your mind on? I went for rides in them. Incredible. Now it's gonna take a long time to get out there. Now. 10 years ago, like, you know, I said like people always underestimate tech over the long term, but they overestimate it always in the near term. Everybody was talking self driving cars 10 years ago, the experience that I had in LA and like San Francisco and self driving car is absolutely incredible.
- [65:13]
Unknown
Now we don't shit on people in this show, but we can praise them. And so if you were to choose one seed firm, one Series A and one growth to put your money into as an lp, which firm would you choose?
- [65:25]
Mitchell Green
If I had to be like a traditional growth, okay, Spectrum would be the growth fund. But a lot of your audience is not that type of growth. That's more like bootstrap growth, traditional growth, either Iconic or Maritech. The returns of Iconic are freaking amazing.
- [65:40]
Unknown
Iconic or Maritech, Series A.
- [65:42]
Mitchell Green
Those two groups between Seed and A, it would be like Benchmark or Bessemer.
- [65:46]
Unknown
You don't worry fund size is too large.
- [65:48]
Mitchell Green
If you need to own a large fund and write a fifty hundred million dollar plus check, Bessemer is as good as any of that are big funds. Like I think the guys at Index are amazing investors too. I problem with a lot of these funds is you got to buy the basket. Like Bessemer actually just has one fund, which I highly respect. I mean, I guess they now have a buyout fund but like and an India fund.
- [66:07]
Unknown
But you always have to buy the basket. You want to do Excel, you gotta.
- [66:10]
Mitchell Green
Do the whole basket.
- [66:12]
Unknown
Totally agree. What can. Sorry.
- [66:14]
Mitchell Green
Oh, go ahead.
- [66:14]
Unknown
No, no, please.
- [66:15]
Mitchell Green
Oh, I thought you're gonna ask me like the short microstrategy is totally insane.
- [66:19]
Unknown
Why?
- [66:20]
Mitchell Green
I'm very not bearish on crypto. But like, I think it reminds me a little bit of the tulip craze that you can't actually use crypto to go buy. Like when you could. If I could go buy a Tesla with crypto, it'd be amazing. If I could go to Amazon and use Bitcoin, it'd be incredible. But like you can't right now, now again I think it's probably just so volatile people can't like the currencies. The idea like from what I understand microstrategy is effectively issuing debt to buy to go in the market and buy more crypto and they just keep doing it but if that reverses eventually got paid on the debt, it just sounds like a house of cards to me. It just seems to me like some of these like crypto businesses are a little skeptical.
- [66:55]
Unknown
Do you have any crypto investments?
- [66:57]
Mitchell Green
I do not. No, I do not have any crypto investments. We've looked at stuff around we looked at chain analysis years and years ago. Probably should have done it like the picks and shovels type stuff. Should have done coinbase like years and years ago. By the way, I should have bought Bitcoin too. I never have. I mean clearly I could have made a fortune.
- [67:13]
Unknown
What concerns you most in the world today?
- [67:15]
Mitchell Green
Two things, income inequality and that the fact that where I grew up in Michigan I worked in a factory in high school. I think a lot of those people today are way worse off relative to what wealthy people were 25 years ago. If it's the 0.1% or the 1% it's just broken off and this printing of money has just caused it's going to cause mass. It's massive income dispersion.
- [67:37]
Unknown
I agree but what happens Mitchell, it's getting worse.
- [67:40]
Mitchell Green
That causes revolutions to be clear but the thing that I actually worry about more near term that's solvable is social media for teenagers. It's absolutely horrible. We need. But I am a ByteDance investor to be clear. ByteDance in the vast majority of their market is highly regulated like kids in China. Go on TikTok to read about like science experiments and math projects, you know in the States I assure you that's not happening. Or in England the media companies are regulated. There's a reason the BBC or the Discovery Channel or NBC can't say A lot of the things that get said on social media, they're highly regulated. They're like regulated by the governments. You get massive fines. Social media companies need to be held accountable for the content. There's a law. I'm just forgetting.
- [68:24]
Unknown
Should we. Australia banned it for under 16s. Should we ban it too?
- [68:27]
Mitchell Green
Yes, I think we should. I think it needs to be way highly regulated by the way suicide rates, depression rates, all this bullying, all these different metrics you look at are going one way up into the right that social media is the demise of society.
- [68:41]
Unknown
Penultimate one when have you questioned Yourself most as an investor.
- [68:45]
Mitchell Green
I think we questioned our existence in 20 and 21 as like, we were just getting annihilated on prices. We question ourselves now and are like, are we totally wrong on AI? And we just don't get it. It's like, are there going to be one person companies way sooner than we think? Are all of our software companies going to be completely disrupted and all of them go away and like, like taking a stand that it's. They're not. But like, I guess I could be totally wrong. I think a good. Any investor who says they know the answer to something, that's the best way to fail. And we just, you know, you got to stay intellectually curious.
- [69:15]
Unknown
And my favorite is the thesis that we say about. Every investor has a thesis and what the fuck are we professors? Like, I don't know about you, I've never had a thesis.
- [69:23]
Mitchell Green
I don't have any thesis, by the way. My thesis is meet six or eight criteria that I literally, the amount of pontification in the world, especially on Twitter, by people that are like, in the investment business, people should spend less tweeting more investing time. Here's what I believe. What you tell your LP is just make sure you stick to it and do it. That's actually the best advice I can give for any emerging fund manager. It's like, define what you're going to do and do exactly that. Don't stray from it at all.
- [69:48]
Unknown
Will the tourists get washed out of the venture cases?
- [69:50]
Mitchell Green
100% they will. When? I don't know. It might be like a slow, you know, it might be like a slow hole in the canoe, but eventually, yes, they will. Yes.
- [69:57]
Unknown
100% final one for you. I like to finish on optimism positivity. When you look forward the next 10 years, what are you most optimistic, positive, excited about?
- [70:06]
Mitchell Green
Humans are just very resilient people that adapt to change. I mean, I'm glad I became a software investor and not an energy investor. Energy, I don't know. It's been like a dying industry for the last 15 years, but energy has never been hotter. Now, not it's got her now, but, like, it goes in waves. And I just like the amount of innovation that's happening and just like, change. Like, I get to invest, I get to meet really interesting founders. Some of them are going to change the world. Some of them are going to sell budget planning software to the Atherton Police Department. That's fine. But, like, they're building cool companies. Like, look, I am an entre. When I went to Wharton Business school, I was involved in like the Entrepreneur conference and we'd always bring in people that like, built software companies, built consumer companies. I was like, why don't we go get Steve Cohen or like the guys who like, built giant money management firms? Like, Steve Cohen is an entrepreneur. Like, he started with a very small business started by himself, and now runs like one of the biggest hedge funds on the planet. Ken Griffin, same thing. I mean, like, they're like incredible entrepreneurs. The ability I get to spend my day meeting cool entrepreneurs is just like, it's not a job. It's like an amazing thing to do.
- [71:13]
Unknown
You know, I hate the term operator and the way we use it because it implies that anyone else who's not like, on operator, you don't operate.
- [71:22]
Mitchell Green
Yeah, exactly. Look, I've got 80 employees, so yeah, actually the best advice I ever got and something I try to do every year at Lead Edge was from the founder of Excel, kkr, which is a very good fund. And he said you should interview all your employees from admin to your other partners, and basically ask them for feedback. Just be like, hey, if you were running the place, what would you do differently? Tell me everything you do in your job. Green, red or yellow? And so it's like, okay, well, I actually don't care what you do green, I care what you do red. Because I want to get rid of those things. And like, I've been doing that for three or four years and the feedback you get is just like, incredible.
- [71:55]
Unknown
What have you most changed on the back of those?
- [71:58]
Mitchell Green
Yeah, so lots of things. But I would say the biggest thing we did is as we started to call more and more non Silicon Valley based companies, our 1820 associates, you know, 22, 24 year olds, were like, dude, in Chicago, nobody knows who we are. In Indianapolis, nobody knows who you are. We need to get the brand out there. So we hired this amazing head of PR comms, Mikaela, who had helped build Tusk Ventures for Bradley, who had, by the way, built a pretty good brand over like a couple years. And we're like, hey, Mikayla, how do we get entrepreneurs in Madison, Wisconsin to know who we are? We got 15 years of quarterly letters about the hierarchy of bullshit that, by the way, other venture funds take viral.
- [72:37]
Unknown
It's a book I'm reading.
- [72:38]
Mitchell Green
We literally have a 400. It makes a good doorstop, good kindling in the winter for a fire, really good. So that content we want to start to release to the public, like, we joke that it's very funny that partners at Andreessen Horowitz, who we're friends with or partners at Benchmark, or partners at first round, have made the hierarchy of BS Letter kind of famous. We didn't actually make it famous. We just gave it to other people who distributed it. We should distribute our own content. And so she's like, we have 10 years of amazing letters like this. 15 years. Let's start to, like, put those out there. Go on cnbc, like, go on Bloomberg and look, you know, entrepreneurs, if you're on tv, that you're. You're now smart, we tend to, like, be a pretty, like, direct firm. And like, actually another thing that we pride ourselves on is fast no's. And I don't think enough people do tell an entrepreneur. If it's not a fit, tell them very quickly. Don't waste people's time. People valet. I'd say it's LPs. If we're not a fit for an LP, please tell me there's no reason for me to meet you two or three times and give you a bunch of data. I highly respect. You have a call with somebody and they're like, you know what? Like what you do, Mitchell? You guys just aren't a fit for us. No problem. Like, we at lead edge to all our analysts and associates and principals and VPs, like, drive down the fact that, hey, you talk to a company, like, they've prepped for the meeting, they've done a bunch of work. Tell them it's just not a fit. Like, don't drag it out a month. Don't drag it out two weeks.
- [73:53]
Unknown
You give them the reasoning why 100%.
- [73:55]
Mitchell Green
We do, yes.
- [73:56]
Unknown
And you don't worry that they'll argue back?
- [73:58]
Mitchell Green
Don't care. Some people argue back. And by the way, we passed on an analyst candidate. He emailed me and said, hi, I'm on, like, the Harvard varsity team of this and this. My rejection box is full. I reject your rejection. He got another interview. I was like, this letter is just, like, incredible. He actually, like, most people get rejected. Like, 99.9% of people get rejected, and you never hear from him again. This guy was like, no, I reject your rejection. Here's the reason why I think I'd be really good. Here are some really interesting companies, companies that I think are interested in this guy. Sounds pretty damn good. Like, why do we pass on him? Like, oh, well, we're kind of full for the year, and, oh, get him back in. Like, let's meet this guy.
- [74:37]
Unknown
The thing I find astounding with people who want to get into venture is actually, it's quite easy if you just give the freemium version of yourself. If I send you three companies every quarter that aligned to Lead Edge's model and the companies that you like, and I can see that on your website and I do that for three quarters, say nine months, come in here, come.
- [74:52]
Mitchell Green
And talk to us. 100%. 100%?
- [74:54]
Unknown
Yeah.
- [74:54]
Harry Stebbings
That's impressive.
- [74:55]
Mitchell Green
Yes, 100%.
- [74:56]
Unknown
Listen, Mitchell, I've loved doing this. Thank you so much for joining me and you've been a fantastic guest.
- [75:01]
Mitchell Green
Thank you.
- [75:03]
Unknown
Oh my God, I so enjoyed doing that show. If you want to watch the episode.
- [75:06]
Harry Stebbings
You can find it on YouTube by searching for 20VC. That's 20VC. As I said, you can find that on YouTube. Mitchell was live in the studio in London. But before we leave you today, here are two fun facts about our newest brand sponsor, Kajabi. First, their customers just crossed a collective $8 billion in total revenue. Wow. Second, Kajabi's users keep 100% of their earnings with the average Kajabi creator bringing in over $30,000 per year. In case you didn't know, Kajabi is the leading creator commerce platform with an all in one suite of tools including websites, email marketing, digital products, payment processing, and analytics for as low as $69 per month. Whether you are looking to build a private community, write a paid newsletter, or launch a course, Kajabi is the only platform that will enable you to build and grow your online business without taking a cut of your revenue. 20VC listeners can try Kajabi for free for 30 days by going to kajabi.com 20VC that's kajabi.com K-A-A-A-B-I.com 20VC once you've built your creator empire with Kajabi, take your insights and decision making to the next level with AlphaSense, the ultimate platform for uncovering trusted research and expert perspectives. As an investor, I'm always on the lookout for tools that really transform how I work. Tools that don't just save time, but fundamentally change how I uncover insights. That's exactly what AlphaSense does. With the acquisition of Tagus, AlphaSense is now the ultimate research platform built for professionals who need insights they can trust fast. I've used Teagus before for company deep dives right here on the podcast. It's been an incredible resource for expert insights, but now with Alex AlphaSense leading the way, it combines those insights with premium content, top broker research and cutting edge generative AI. The result? A platform that works like a supercharged junior analyst, delivering trusted insights and analysis on demand. AlphaSense has completely reimagined fundamental research, helping you uncover opportunities from perspectives you didn't even know how they existed. It's faster, it's smarter, and it's built to give you the edge in every decision you you make to any VC listeners. Don't miss your chance to try AlphaSense for free. Visit AlphaSense.com 20 to unlock your trial. That's AlphaSance.com 20. As always, I so appreciate all your support and stay tuned for an incredible.
- [77:29]
Unknown
Episode coming on Friday.