YouSaid · the spoken record

Mitchell Green

lines on the record: 99
first: 2025-03-28
most recent: 2025-03-28
sittings or episodes: 1
sources: podcast

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“It's gay. And also, a lot of people are just like, 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 ten years. And they want to help like a huge amount of LPs are not from Silicon Valley. And so we find them 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 transfer-wise over here, we very early on before we invested said, listen, do you want to talk to the former CFO of PayPal? Would you want to talk to the former president of ESA? 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?”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“The CEOs lie So, like, look, we are. We believe, so 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 is some of the biggest venture funds on the planet, our 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“The former CEO of Kimberly Clark, the former CEO of Colgate Pomolov. 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 biospace. You sell R&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 by the way, we introduced them during our diligence process. They act as our own version of McKinsey. That's how we get into deals. And that's why people like us.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's like, what do we do? Why is that? When we started Lead Edge, my partner Nima and I, because Brian hadn't even joined yet, Fat around were like, why is it we could take our two knuckleheads money? Like, 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 Nime, 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 pretty believable, right? We don't have that. We had never, you know, been the global head of HR of anything. Or we had never done anything except like cold conalists. So we thought like, well, how are we going to get in the 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 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Founders want so our pitch is very simple it's the reason that you know a huge number of our founders have invested in our funds post-exit”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“We looked at it in the past. So, like, it's fine. Again, we're going to miss stuff. It's fine, but again, we have a framework, a hundred 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“We missed Snowflake. Massive. I mean, when we looked at Snowflake, it had like horrible gross margins. But again, we looked at it at $500 million and we were completely wrong. Like just like 100% wrong.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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. It had burned very little capital. And why? Because it had amazing gross dollar retention rates. And the CEO was just like he thought a lot.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“But we're looking for like a one to one ratio or better. We just think it speaks to so many disquality qualities of the business. Like we were lucky to be investors in bench lane. We're still investors. When we invested, benchmark like did the early rounds, Thrive was an early investor. When we was like 13 of ARR growing well north of 100% a year.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so Alibaba was very cash efficient, actually. It only invested was a billion dollars of profit. Actually, there may be less shares of Alibaba. I credit Josiah and the team at Alibaba has actually 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's was totally insane. We tend to over the last few years, we've dramatically increased the amount of like dilute. We assume 20, 30 percent dilution. And if you're investing earlier, it could be a lot more than that. We have this like 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 dollar revenue business, like that's a great business.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Better than ChatGPT. But again, 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, if you've got a business that ends that ended 2024 at 10 million of revenue, and I've got 200% gross dollar retention. So like, okay, my 10 became 20 all through existing customers, but you only have 50% gross dollar attention. You actually lost half your customers. And you had, yes, you had a few that really liked it, but that means a huge amount of like experimental. When you're a really small company, a difference between 90% gross tower 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 the sales and marketing efficiency. It's 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Saying 100 times whatever it is for companies, we don't 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 kind of in the money? Or do I need to grow for four or five years until I even get in the money? I think in toast, for instance, it was like when we invested in 15, 16 times, 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, like for that growth rate, that's like saying it's pretty reasonable. Like 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 price is being paid are totally insane. I also think investors. I've had numerous entrepreneurs tell me, oh, I don't look at gross dollar attention nets that only think that matters.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“To four extra money is two extra revenue and two extra multiple. By the way, the reverse happens too. So that's what's happening to all this stuff in 2021 vintage funds. Like multiples got cut in half for people. And so if you two extra revenues and half your multiple, that's called a 1x.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you need to use some reasonable revenue multiple software companies are just shorthand for EBITDA. Like it's not at the end of the day, I think you should assume if you build a software company and you're in it and it's growing, you should assume an exit of it's growing 15 to 25 to 30 percent 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 ten 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 it like 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 a 40. And the most important thing getting the rule authority 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 with 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. 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 priority 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 30 million of revenue, 20 million of revenue, growing 40% a year. Let's grow it. Let's, you know, two to two and a half, three x 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“But all venture. 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 two billion dollars of revenue, or sorry, a billion or two billion evaluation.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Our stupidest mistakes were just like overpaying for a couple companies, assuming the exit multiple was going to be like higher than it actually is. 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 business away from Silicon Valley-based companies and needing to say every company needed IPO. It was go find these gravities, go find the safe send.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“That's true. Yeah, yeah. So, like, 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 need to stay in business and, you know, need to raise funds two, three, four, and, you know, are not people like Best Friend that have been in business 80 years. And by the way, for every Shopify, go ask them about 1999 and 2000. Or like how many billions of dollars were lost in 2021 by not distributing positions.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“I really like it. So Fabriz 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 BRC. 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 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 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. You're not selling the whole position. Just like start to return money back to people.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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, do you know Fabrize Grande?”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, three acts. It's hard to do. By the way, we oh, totally agree with you, by the way. We met some endowments like a couple years ago that said, oh, you're lead edge, 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 that, we left the meeting and we said to ourselves, should we go hair 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 the space, get to know the private equity funds that could eventually buy you. Like, you know, by the way, if you think you're going to do 50 million of 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“I like 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, 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“We look at the portfolio. By the way, what's an investment committee? An investment committee is you sit and talk about companies that you want to invest in. You like 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 stake? 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 holistic 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, like some VCs as pigs at the trough. It's like, I ate the food.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 an 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 two to five X in three to seven years.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Take it 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 want, 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 else that just don't care as much about it. And their stocks are going to be more volatile. And we have no problem with companies that go public and want to have dual class listed stock. I've got one in transfer-wise over here.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“There's two sides of it. Look, nobody says you, by the way, have to be a public company. Chanel, Tetrapak, Amway, there are big private companies, 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, we don't want to be a public company. So if you invest in us, just know that we bear in mind when 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. Obviously, the quarterly guide, the quarterly cadence of public companies is a little bit nonsenseical. However, I think if you go ask a lot of like Mark Bennyoff or like, you know, the Google guys did be in a public company, make them more disciplined, did it make them prioritize one thing over another thing? They probably would say, but it was a necessary evil. They had investors that wanted liquidity that they needed to.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. That is like very. Do you think guys like Don Valentin or Mike Moritz or John Doore, 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 Harvard Business School analyst. You'll be fine. We actually think it makes companies better. I get how both sides of the trade.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“You can try to pivot and pivot all you want. There are so many VCs that just like to waste their time on company boards. We do not understand it. We're just like, listen, yes, we have a pref that 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 IPL 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 Reddits, look at some of these other things. The issue is the good companies, the Grafana Labs, the Databricks. Like they have so much money. They have so much cash. The stripes, they don't need to go public. And you have this whole other sector comes that can't go public.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, like, we've just drilled in a couple of our companies that 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's not going to just come and buy you. This company's never going to go public. You need to get it to rule authority to sell it to a private equity fund. And by the way, I'm sorry the last round was $3 billion. You're $120 million in revenue growing 18% a year. If we can get it to rule of 40, you might be worth five times revenues.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“That's like really fast for him. And now it's not 100%, but 50, 60% of these mid-market private equity firms also buy software companies. They have a sleeve to do software. So now if you 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 seminar portfolio. Don't worry. We did some real stupid stuff in 2022, 2020, and 21, as everybody else did as well. 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 Facebooks and stuff like that. But most companies raise $100 to $300 million. In 2021, they would go raise $100 to $300 million. These companies completed IPOs. You have to get them.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Living dead. So the fundamental problem that happened, we saw this when we were at Bass Merculine 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, it's 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 Nordic 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, Tomas, and Francisco's were like just starting to start. Fast forward today now have these big software private 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 two, right? So if I bring up a company growing 15% a year,”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct me. But a very different scenario. That's totally fine. We have these eight criteria. Some of them are like generational companies. Late last year, we were buying Bite Dance. 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 was 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 $165, $170 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 our stake at a $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 my money. No, it is not generational game defining, but it is tech investing, making really good.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 with 10 to $20 million revenue software businesses and exit them when they're 60 to 80 million dollar software businesses.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Business to about $47 million of revenue and very nicely profitable. And we sold it to Thompson writers 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 million, 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 know, 130, 140 for it, middle of 21 insanity, right? Had that deal, been backed by benchmark, like Vishria or Peter Fenton, no one of those guys, back to benchmark, doing a minority deal based in Silicon Valley, it would have been $500 million.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“It turns out before COVID, a bunch of people used to literally go to their accountant's office and sign their tax returns. Sounds totally insane. But after COVID, like you couldn't do it 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 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 docu sign 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 control 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...”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“The price. I think we bought the business for like $50 million or something like that. We own the company, 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 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. It'd been around for six or seven years. And it was COVID-enabled. And what do I mean by that?”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Before, and that changes it. And it's going to be guys like you, our benchmark, our Sequoia that find that thing at the very early stage. And my guess is it is not just some infrastructure software company that the world knows about right now”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“It's go to market. It's difficult. It's that kind of stuff. If I had a dollar for every time somebody had said to me, like, oh, Microsoft's just 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, 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. 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. It's going to be some type of company that AI is enabling, that nobody else could do something.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Book, we speak to 10,000 companies a year. We have a team of 20, 22 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 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 looked 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 we took that framework, we expanded it to six. Now it's the lead edge eight and that defines everything we do.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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 gonna come and present your best companies. We got there. We're like, oh, we found this great company. It's two million revenue. It's going to be the next Google. They're like, no, it's not. This company sucks. Find this company 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% of the year. And you're like, no, no, find us companies that grow for them because like 50% a year. And then you find a company, but it has 20 million of revenue, grows 40% a year, but 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 or 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.”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Edge. 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 in 2005, Bessemer is this legendary early stage venture fund that is very shark tank-esque. And what I mean by that is every year, you know, 1,000 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 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 was 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”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“Is also the hardest working man. And I joke 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. But by the way, never go on a bicycle ride with him”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source
“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”
2025-03-28 · The Twenty Minute VC · 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 · IDENTIFIED FROM THE TRANSCRIPT · source