Why Now is the Best Time to Buy Public Software Companies

My guest today is Mitchell Green, the My guest today is Mitchell Green, the founder of Lead Edge Capital. When I founder of Lead Edge Capital. When I founder of Lead Edge Capital. When I think about Lead Edge, I sort of think think about Lead Edge, I sort of think think about Lead Edge, I sort of think about this giant money machine that about this giant money machine that about this giant money machine that Mitchell and his two partners have Mitchell and his two partners have Mitchell and his two partners have designed over the last 15 plus years to designed over the last 15 plus years to designed over the last 15 plus years to make remarkably consistent investment make remarkably consistent investment make remarkably consistent investment returns for their clients. They have all returns for their clients. They have all returns for their clients. They have all sorts of unique aspects to the machine sorts of unique aspects to the machine sorts of unique aspects to the machine that they built, whether that's their that they built, whether that's their that they built, whether that's their collection of LPS, their eight-point collection of LPS, their eight-point collection of LPS, their eight-point criteria for how they select companies, criteria for how they select companies, criteria for how they select companies, the way they do cold calls, the way they the way they do cold calls, the way they the way they do cold calls, the way they construct their portfolio. This is just construct their portfolio. This is just construct their portfolio. This is just a totally different way of approaching a totally different way of approaching a totally different way of approaching markets. They're trying to hit singles markets. They're trying to hit singles markets. They're trying to hit singles and doubles and deliver very consistent and doubles and deliver very consistent and doubles and deliver very consistent returns. Mitchell says it's really returns. Mitchell says it's really returns. Mitchell says it's really important in life to be memorable. important in life to be memorable. important in life to be memorable. That's just a great simple thing that That's just a great simple thing that That's just a great simple thing that you can do. I think you'll find you can do. I think you'll find you can do. I think you'll find listening to Mitchell today and him talk listening to Mitchell today and him talk listening to Mitchell today and him talk about his entire machine and the firm about his entire machine and the firm about his entire machine and the firm that he's built that he himself is that he's built that he himself is that he's built that he himself is extremely memorable. I hope you enjoy extremely memorable. I hope you enjoy extremely memorable. I hope you enjoy learning about his business. So the first time that I heard about So the first time that I heard about lead edge capital was was the very lead edge capital was was the very lead edge capital was was the very famous list of what companies report famous list of what companies report famous list of what companies report starting with cash profits and then if starting with cash profits and then if starting with cash profits and then if they don't have cash profits and you go they don't have cash profits and you go they don't have cash profits and you go down this very funny list down this very funny list down this very funny list >> hierarchy of [ __ ] >> hierarchy of [ __ ] >> hierarchy of [ __ ] >> Yeah. And the the bottom one is the >> Yeah. And the the bottom one is the >> Yeah. And the the bottom one is the place that's voted the best place to place that's voted the best place to place that's voted the best place to work in New York City or something. work in New York City or something. work in New York City or something. >> Absolutely. >> Absolutely. >> Absolutely. >> Where did that list come from? Why did >> Where did that list come from? Why did >> Where did that list come from? Why did you put that together? We've always you put that together? We've always you put that together? We've always found that the best way to communicate found that the best way to communicate found that the best way to communicate with, you know, our audiences, which is with, you know, our audiences, which is with, you know, our audiences, which is entrepreneurs entrepreneurs entrepreneurs and also our investor letter about a different topic. And I letter about a different topic. And I started my career cold calling companies started my career cold calling companies started my career cold calling companies and that's the way we source deals. But and that's the way we source deals. But and that's the way we source deals. But when you start your career talking to I when you start your career talking to I when you start your career talking to I think Brian and I probably spoke to like think Brian and I probably spoke to like think Brian and I probably spoke to like 10,000 companies 10,000 companies 10,000 companies and if you want to know it's a good and if you want to know it's a good and if you want to know it's a good company just, you know, company just, you know, company just, you know, call 10,000 of them. You'll figure out call 10,000 of them. You'll figure out call 10,000 of them. You'll figure out really quick. It's pretty good pattern really quick. It's pretty good pattern really quick. It's pretty good pattern recognition. Until like our head of PR recognition. Until like our head of PR recognition. Until like our head of PR coms came in a few years ago. We had coms came in a few years ago. We had coms came in a few years ago. We had actually never posted any of these actually never posted any of these actually never posted any of these things online. We joked that we sent things online. We joked that we sent things online. We joked that we sent this letter to some people in the VC this letter to some people in the VC this letter to some people in the VC community. one of which is like our community. one of which is like our community. one of which is like our buddy Andre Horowitz and they posted it buddy Andre Horowitz and they posted it buddy Andre Horowitz and they posted it online for us. Um we just thought like online for us. Um we just thought like online for us. Um we just thought like think like it's like a very simple way think like it's like a very simple way think like it's like a very simple way like in a world where people spout off like in a world where people spout off like in a world where people spout off total [ __ ] all the time and like you total [ __ ] all the time and like you total [ __ ] all the time and like you see everything in DAX this is just like see everything in DAX this is just like see everything in DAX this is just like a good way to distill it. a good way to distill it. a good way to distill it. >> Talk to me about the 10,000 calls. What >> Talk to me about the 10,000 calls. What >> Talk to me about the 10,000 calls. What did you learn calling that many did you learn calling that many did you learn calling that many companies? You learn to be very companies? You learn to be very companies? You learn to be very disciplined actually and you learn that disciplined actually and you learn that disciplined actually and you learn that most things are actually just noise and most things are actually just noise and most things are actually just noise and to figure out like what makes a lead to figure out like what makes a lead to figure out like what makes a lead edge company and then try to ignore edge company and then try to ignore edge company and then try to ignore everything else. You learn a lot about everything else. You learn a lot about everything else. You learn a lot about like responsiveness of people and like like responsiveness of people and like like responsiveness of people and like more I think more responsive CEOs tend more I think more responsive CEOs tend more I think more responsive CEOs tend to be better CEOs. I think another thing to be better CEOs. I think another thing to be better CEOs. I think another thing you learn that's really important for you learn that's really important for you learn that's really important for young people, if you tell an young people, if you tell an young people, if you tell an entrepreneur that you're going to entrepreneur that you're going to entrepreneur that you're going to actually do something, then actually do actually do something, then actually do actually do something, then actually do it. And in a I think that's actually it. And in a I think that's actually it. And in a I think that's actually true of like life. Um there are so many true of like life. Um there are so many true of like life. Um there are so many people that say they'll do they do people that say they'll do they do people that say they'll do they do things that just like never do them. And things that just like never do them. And things that just like never do them. And so if you're known as a as a firm and a so if you're known as a as a firm and a so if you're known as a as a firm and a or a person that actually does what you or a person that actually does what you or a person that actually does what you say you're going to do, it goes a long say you're going to do, it goes a long say you're going to do, it goes a long way. So if you tell an entrepreneur, way. So if you tell an entrepreneur, way. So if you tell an entrepreneur, hey, I know somebody at hey, I know somebody at hey, I know somebody at Adobe. do you want an intro because it Adobe. do you want an intro because it Adobe. do you want an intro because it looks like it would be helpful for your looks like it would be helpful for your looks like it would be helpful for your business? And he says, and here she business? And he says, and here she business? And he says, and here she says, I'd love to. Well, then guess says, I'd love to. Well, then guess says, I'd love to. Well, then guess what? Follow up with that. Like, do what what? Follow up with that. Like, do what what? Follow up with that. Like, do what you say you're going to do. you say you're going to do. you say you're going to do. >> Can you describe what seems to me like I >> Can you describe what seems to me like I >> Can you describe what seems to me like I would call it a machine that is Lead would call it a machine that is Lead would call it a machine that is Lead Edge Edge Edge >> much more than most investment firms >> much more than most investment firms >> much more than most investment firms where a lot of great investors will tell where a lot of great investors will tell where a lot of great investors will tell you there's a lot of art, there's a lot you there's a lot of art, there's a lot you there's a lot of art, there's a lot of um, you know, everything's different. of um, you know, everything's different. of um, you know, everything's different. Lead Edge feels to me like unbelievably Lead Edge feels to me like unbelievably Lead Edge feels to me like unbelievably well constructed as a machine to produce well constructed as a machine to produce well constructed as a machine to produce returns. Um I'd love you to just before returns. Um I'd love you to just before returns. Um I'd love you to just before we go into all the details of the as we go into all the details of the as we go into all the details of the as component aspects of the machine component aspects of the machine component aspects of the machine describe the machine itself at a high describe the machine itself at a high describe the machine itself at a high level before I you know I was level before I you know I was level before I you know I was >> um >> um >> um >> we run this place like it's a software >> we run this place like it's a software >> we run this place like it's a software company um my background was at Bessemer company um my background was at Bessemer company um my background was at Bessemer uh where I worked for somebody that was uh where I worked for somebody that was uh where I worked for somebody that was extremely disciplined that was building extremely disciplined that was building extremely disciplined that was building the code program my other partner Brian the code program my other partner Brian the code program my other partner Brian worked at Bessemer we were the first two worked at Bessemer we were the first two worked at Bessemer we were the first two cold cars and my other partner Nema cold cars and my other partner Nema cold cars and my other partner Nema worked at Insight and I think insight worked at Insight and I think insight worked at Insight and I think insight and I know you know Jeff was on recently and I know you know Jeff was on recently and I know you know Jeff was on recently is is one of the best like software is is one of the best like software is is one of the best like software investment or invest technology investment or invest technology investment or invest technology investment machines on the planet. So investment machines on the planet. So investment machines on the planet. So we've like modeled ourselves on that, we've like modeled ourselves on that, we've like modeled ourselves on that, you know, to build a good investment you know, to build a good investment you know, to build a good investment firm that stands the test of time. If firm that stands the test of time. If firm that stands the test of time. If you want to go build the next TA you want to go build the next TA you want to go build the next TA Associates or General Atlantic or, you Associates or General Atlantic or, you Associates or General Atlantic or, you know, Bessemer or Sequoia, you just have know, Bessemer or Sequoia, you just have know, Bessemer or Sequoia, you just have to be like extremely rigorous. And so to be like extremely rigorous. And so to be like extremely rigorous. And so our number one KPI that we run this our number one KPI that we run this our number one KPI that we run this place by is what is our gross dollar place by is what is our gross dollar place by is what is our gross dollar retention for LPS? We want like 95% retention for LPS? We want like 95% retention for LPS? We want like 95% gross dollar retention because the only gross dollar retention because the only gross dollar retention because the only way you can get that is one have good way you can get that is one have good way you can get that is one have good investment returns and great client investment returns and great client investment returns and great client services. So how do you through long services. So how do you through long services. So how do you through long periods of time across people that will periods of time across people that will periods of time across people that will come and go generate like world-class come and go generate like world-class come and go generate like world-class returns is you need to have like a returns is you need to have like a returns is you need to have like a process and the process for us starts process and the process for us starts process and the process for us starts with you know 18 22 to 24 year olds that with you know 18 22 to 24 year olds that with you know 18 22 to 24 year olds that you know talk to about 9,000 companies a you know talk to about 9,000 companies a you know talk to about 9,000 companies a year. You get those 9,000 companies like year. You get those 9,000 companies like year. You get those 9,000 companies like how do you figure out which ones to work how do you figure out which ones to work how do you figure out which ones to work on? So then you need this like framework on? So then you need this like framework on? So then you need this like framework to guide these 18 people to like well to guide these 18 people to like well to guide these 18 people to like well it's gonna be an interesting company it's gonna be an interesting company it's gonna be an interesting company because in the investment business like because in the investment business like because in the investment business like we have one asset it's time and it's we have one asset it's time and it's we have one asset it's time and it's like precious and so like how do you like precious and so like how do you like precious and so like how do you guide people to say no quick and so we guide people to say no quick and so we guide people to say no quick and so we built this framework that we really took built this framework that we really took built this framework that we really took from coming out of Bessemer and so like from coming out of Bessemer and so like from coming out of Bessemer and so like they helped build the Bessemer 5 we took they helped build the Bessemer 5 we took they helped build the Bessemer 5 we took the Bessemer 5 turned it into lead eight the Bessemer 5 turned it into lead eight the Bessemer 5 turned it into lead eight and it's like drives everything we do and it's like drives everything we do and it's like drives everything we do now when we find the company We're then now when we find the company We're then now when we find the company We're then super creative. We'll buy 10% 80% LPS super creative. We'll buy 10% 80% LPS super creative. We'll buy 10% 80% LPS out of a 20-y old fund, buy employee out of a 20-y old fund, buy employee out of a 20-y old fund, buy employee secondary, you know, fund somebody's CV, secondary, you know, fund somebody's CV, secondary, you know, fund somebody's CV, we don't care. We'll do anything. we don't care. We'll do anything. we don't care. We'll do anything. >> If I think about the two sides being the >> If I think about the two sides being the >> If I think about the two sides being the LPS and the companies that you invest LPS and the companies that you invest LPS and the companies that you invest in, I'll come back to the eight in, I'll come back to the eight in, I'll come back to the eight criteria. The LP story that you have is criteria. The LP story that you have is criteria. The LP story that you have is also quite distinct and different. Can also quite distinct and different. Can also quite distinct and different. Can you describe that in a lot of detail? you describe that in a lot of detail? you describe that in a lot of detail? >> Sure. Our LP base is all like >> Sure. Our LP base is all like >> Sure. Our LP base is all like world-class exeacts and entrepreneurs. world-class exeacts and entrepreneurs. world-class exeacts and entrepreneurs. Um, I know we do have some big Um, I know we do have some big Um, I know we do have some big institutions, but 95% of our capital is institutions, but 95% of our capital is institutions, but 95% of our capital is like all these world-class execs and like all these world-class execs and like all these world-class execs and entrepreneurs and entrepreneurs and entrepreneurs and we use these LPs we use these LPs we use these LPs throughout the entire investment life throughout the entire investment life throughout the entire investment life cycle. It literally starts with cycle. It literally starts with cycle. It literally starts with sourcing. If a company won't call us sourcing. If a company won't call us sourcing. If a company won't call us back, we'll email our LPs. Two, let's back, we'll email our LPs. Two, let's back, we'll email our LPs. Two, let's say it's like an automotive software say it's like an automotive software say it's like an automotive software company. We'll have Rick Wagner, the company. We'll have Rick Wagner, the company. We'll have Rick Wagner, the former CEO of GM, who's a longtime former CEO of GM, who's a longtime former CEO of GM, who's a longtime investor. We will be like, will you send investor. We will be like, will you send investor. We will be like, will you send them like the CEO a note? And if you're them like the CEO a note? And if you're them like the CEO a note? And if you're like an automotive software CEO and the like an automotive software CEO and the like an automotive software CEO and the former CEO of General Motors calls you former CEO of General Motors calls you former CEO of General Motors calls you like they're way more likely to take an like they're way more likely to take an like they're way more likely to take an email than like my any knucklehead email email than like my any knucklehead email email than like my any knucklehead email on them or a 22-y old email in them then on them or a 22-y old email in them then on them or a 22-y old email in them then for diligence we'll say hey it's like for diligence we'll say hey it's like for diligence we'll say hey it's like you're a healthcare software company 25 you're a healthcare software company 25 you're a healthcare software company 25 million of revenue maybe you say like million of revenue maybe you say like million of revenue maybe you say like biotech or pharmaceutical software it's biotech or pharmaceutical software it's biotech or pharmaceutical software it's like oh I see fizer is a customer how like oh I see fizer is a customer how like oh I see fizer is a customer how big is it 2 million bucks could be big is it 2 million bucks could be big is it 2 million bucks could be bigger oh it could be 10 million I'll bigger oh it could be 10 million I'll bigger oh it could be 10 million I'll meet the former CEO and then I'll call meet the former CEO and then I'll call meet the former CEO and then I'll call up Ian Reed and be like hey Ian can you up Ian Reed and be like hey Ian can you up Ian Reed and be like hey Ian can you talk to this company they'd love to talk talk to this company they'd love to talk talk to this company they'd love to talk to you. By the way, can you like tell us to you. By the way, can you like tell us to you. By the way, can you like tell us what you think? And then if it's super what you think? And then if it's super what you think? And then if it's super interesting, could you like call could interesting, could you like call could interesting, could you like call could you [ __ ] call Fizer and like back you [ __ ] call Fizer and like back you [ __ ] call Fizer and like back channel it? And then you you might say channel it? And then you you might say channel it? And then you you might say the entrepreneur, hey, I don't see the entrepreneur, hey, I don't see the entrepreneur, hey, I don't see Biogen as a customer. Would you want to Biogen as a customer. Would you want to Biogen as a customer. Would you want to meet the former CEO? So you call up meet the former CEO? So you call up meet the former CEO? So you call up George, you're like, "Hey, George, I George, you're like, "Hey, George, I George, you're like, "Hey, George, I found this company. It meets seven of found this company. It meets seven of found this company. It meets seven of our eight criteria." Then like post our eight criteria." Then like post our eight criteria." Then like post investment, we literally send emails to investment, we literally send emails to investment, we literally send emails to our LPs. Be like, hey, you know, Toast our LPs. Be like, hey, you know, Toast our LPs. Be like, hey, you know, Toast is looking for intros to these is looking for intros to these is looking for intros to these restaurants. Do you know anybody? And it restaurants. Do you know anybody? And it restaurants. Do you know anybody? And it turns out all these people invest in turns out all these people invest in turns out all these people invest in funds and never get asked for help. funds and never get asked for help. funds and never get asked for help. That's how we do it and how we leverage That's how we do it and how we leverage That's how we do it and how we leverage them. But it's not actually why we did them. But it's not actually why we did them. But it's not actually why we did it. It would be a lot easier to go have it. It would be a lot easier to go have it. It would be a lot easier to go have 20 giant institutions write you 50 to 20 giant institutions write you 50 to 20 giant institutions write you 50 to $300 million checks versus me spending a $300 million checks versus me spending a $300 million checks versus me spending a huge amount of my time running around huge amount of my time running around huge amount of my time running around the world all the time spending time the world all the time spending time the world all the time spending time with these people. Because if you want with these people. Because if you want with these people. Because if you want 95% retention, that's what you need to 95% retention, that's what you need to 95% retention, that's what you need to do because they're your clients. The do because they're your clients. The do because they're your clients. The reason we did it is because I knew that reason we did it is because I knew that reason we did it is because I knew that the returns in this sector in the tech the returns in this sector in the tech the returns in this sector in the tech investing sector flow to the top 10% of investing sector flow to the top 10% of investing sector flow to the top 10% of funds. Like they they just do it is and funds. Like they they just do it is and funds. Like they they just do it is and by it probably is the same in real by it probably is the same in real by it probably is the same in real estate. It probably the same as estate. It probably the same as estate. It probably the same as industrial buyouts. But like I knew in industrial buyouts. But like I knew in industrial buyouts. But like I knew in the venture world that it definitely the venture world that it definitely the venture world that it definitely flowed to that. And I had the pleasure flowed to that. And I had the pleasure flowed to that. And I had the pleasure of working for one of these firms best of working for one of these firms best of working for one of these firms best venture partners. So when I was starting venture partners. So when I was starting venture partners. So when I was starting lead edge I was like why in God's name lead edge I was like why in God's name lead edge I was like why in God's name is anybody gonna take my money? I could is anybody gonna take my money? I could is anybody gonna take my money? I could teach him how to ski, but that isn't teach him how to ski, but that isn't teach him how to ski, but that isn't going to be very helpful. But I said, going to be very helpful. But I said, going to be very helpful. But I said, you know what? Had I been the global you know what? Had I been the global you know what? Had I been the global head of HR at Proctor and Gamble and my head of HR at Proctor and Gamble and my head of HR at Proctor and Gamble and my partner been the global head of HR at partner been the global head of HR at partner been the global head of HR at Microsoft and the other one been the Microsoft and the other one been the Microsoft and the other one been the head of HR at Nike. When I called head of HR at Nike. When I called head of HR at Nike. When I called workday 80 times at Bessemer and Dave workday 80 times at Bessemer and Dave workday 80 times at Bessemer and Dave Duffield by the end was like, I'll hire Duffield by the end was like, I'll hire Duffield by the end was like, I'll hire you as a salesperson. I'm not taking you as a salesperson. I'm not taking you as a salesperson. I'm not taking your guy's money. Um, if I had been like your guy's money. Um, if I had been like your guy's money. Um, if I had been like a world-class HR exact, he would have a world-class HR exact, he would have a world-class HR exact, he would have engaged with me because he would have engaged with me because he would have engaged with me because he would have known that I could have introduced to known that I could have introduced to known that I could have introduced to those companies. Like I have tons of those companies. Like I have tons of those companies. Like I have tons of other HR exacts. I know these people in other HR exacts. I know these people in other HR exacts. I know these people in a world that's super crowded and a world that's super crowded and a world that's super crowded and undifferentiated and I think it's undifferentiated and I think it's undifferentiated and I think it's exponentially the case more today even exponentially the case more today even exponentially the case more today even than what it was 15 years ago. Um, it than what it was 15 years ago. Um, it than what it was 15 years ago. Um, it just like differentiates us and we do just like differentiates us and we do just like differentiates us and we do what we say we're going to do. what we say we're going to do. what we say we're going to do. >> How many LPs do you have? >> How many LPs do you have? >> How many LPs do you have? >> Probably like 800. 95% by number are >> Probably like 800. 95% by number are >> Probably like 800. 95% by number are these executives. Yeah. If you think these executives. Yeah. If you think these executives. Yeah. If you think about the level of returns versus the about the level of returns versus the about the level of returns versus the consistency of returns, how much does consistency of returns, how much does consistency of returns, how much does one matter versus the other for the ex one matter versus the other for the ex one matter versus the other for the ex for this 95% gross retention? for this 95% gross retention? for this 95% gross retention? >> I think consistency is more important on >> I think consistency is more important on >> I think consistency is more important on a per deal basis. a per deal basis. a per deal basis. We're trying to make a 2 to 5x in 3 to We're trying to make a 2 to 5x in 3 to We're trying to make a 2 to 5x in 3 to seven years. That's like a 25 net IR if seven years. That's like a 25 net IR if seven years. That's like a 25 net IR if you just actually map it on a curve. Put you just actually map it on a curve. Put you just actually map it on a curve. Put it into a fund. it into a fund. it into a fund. We want to generate you two to 2 and We want to generate you two to 2 and We want to generate you two to 2 and a/4x nets with 20 net IRS. Some of those a/4x nets with 20 net IRS. Some of those a/4x nets with 20 net IRS. Some of those deals aren't going to be 5xes. Some of deals aren't going to be 5xes. Some of deals aren't going to be 5xes. Some of them might be 7xs. We try to our them might be 7xs. We try to our them might be 7xs. We try to our downsides have been very low. We've I downsides have been very low. We've I downsides have been very low. We've I think we've only lost all of our money think we've only lost all of our money think we've only lost all of our money like in one deal ever. And that's like in one deal ever. And that's like in one deal ever. And that's because of the like the the kind of because of the like the the kind of because of the like the the kind of criteria we look for in a company, what criteria we look for in a company, what criteria we look for in a company, what our average company looks like and the our average company looks like and the our average company looks like and the fact that very few of our companies have fact that very few of our companies have fact that very few of our companies have any debt on them now. So I try I'm any debt on them now. So I try I'm any debt on them now. So I try I'm trying to make a two to two and a/4x net trying to make a two to two and a/4x net trying to make a two to two and a/4x net which is more like a two and a halfx which is more like a two and a halfx which is more like a two and a halfx gross. gross. gross. However, if something is a really big However, if something is a really big However, if something is a really big investment in the fund and we do not run investment in the fund and we do not run investment in the fund and we do not run funds with like a 100 15 companies in funds with like a 100 15 companies in funds with like a 100 15 companies in them. We have we run funds with like 20 them. We have we run funds with like 20 them. We have we run funds with like 20 investments in them. So if we've made investments in them. So if we've made investments in them. So if we've made something a 7 10 12 15% position and something a 7 10 12 15% position and something a 7 10 12 15% position and that goes like 8 10 12x that's how you that goes like 8 10 12x that's how you that goes like 8 10 12x that's how you can 3x net a fund. can 3x net a fund. can 3x net a fund. >> Yeah. And so because you rarely lose >> Yeah. And so because you rarely lose >> Yeah. And so because you rarely lose money, does that mean you also almost money, does that mean you also almost money, does that mean you also almost never hit some like giant grand slam? never hit some like giant grand slam? never hit some like giant grand slam? >> Correct. We're like Cal Ripken doubles >> Correct. We're like Cal Ripken doubles >> Correct. We're like Cal Ripken doubles doubles and triples. Uh yeah, we're not doubles and triples. Uh yeah, we're not doubles and triples. Uh yeah, we're not uh we were not Sammy Sosa or like Mark uh we were not Sammy Sosa or like Mark uh we were not Sammy Sosa or like Mark Magguire. It's all about um hitting Magguire. It's all about um hitting Magguire. It's all about um hitting doubles and triples and and if you do doubles and triples and and if you do doubles and triples and and if you do that with very little leverage in the that with very little leverage in the that with very little leverage in the portfolio, 90% of our companies or 85% portfolio, 90% of our companies or 85% portfolio, 90% of our companies or 85% of our companies are like recurring of our companies are like recurring of our companies are like recurring revenue. So if you invest today and know revenue. So if you invest today and know revenue. So if you invest today and know what revenues are in July, that's like a what revenues are in July, that's like a what revenues are in July, that's like a pretty good way to invest. 50 60% of our pretty good way to invest. 50 60% of our pretty good way to invest. 50 60% of our companies are like profitable companies are like profitable companies are like profitable businesses. Now you you may get it wrong businesses. Now you you may get it wrong businesses. Now you you may get it wrong like you may back the wrong team. You like you may back the wrong team. You like you may back the wrong team. You may overestimate the size of the market, may overestimate the size of the market, may overestimate the size of the market, but I think like 70% of the time we own but I think like 70% of the time we own but I think like 70% of the time we own the prep. So you may get your downside the prep. So you may get your downside the prep. So you may get your downside 1x. Now sometimes you need to like go 1x. Now sometimes you need to like go 1x. Now sometimes you need to like go cut the recut the deal with the cut the recut the deal with the cut the recut the deal with the entrepreneur or the management team. So entrepreneur or the management team. So entrepreneur or the management team. So you're making slightly less than that. you're making slightly less than that. you're making slightly less than that. But if you can avoid zeros like you in But if you can avoid zeros like you in But if you can avoid zeros like you in and turn those zeros into like 08 X's and turn those zeros into like 08 X's and turn those zeros into like 08 X's or.1 X's, it massively helps return. or.1 X's, it massively helps return. or.1 X's, it massively helps return. We'll sell like we we will out of We'll sell like we we will out of We'll sell like we we will out of probably a third of our exits have been probably a third of our exits have been probably a third of our exits have been secondaries. We will buy secondaries. We secondaries. We will buy secondaries. We secondaries. We will buy secondaries. We will also sell. We constantly will also sell. We constantly will also sell. We constantly underwrite. We've been referred to as underwrite. We've been referred to as underwrite. We've been referred to as traders or like for like hedge fun guys traders or like for like hedge fun guys traders or like for like hedge fun guys and we're like no no we're just trying and we're like no no we're just trying and we're like no no we're just trying to actually make money because this to actually make money because this to actually make money because this company is about to be a living dead and company is about to be a living dead and company is about to be a living dead and you're going to be in this thing for the you're going to be in this thing for the you're going to be in this thing for the next decade. next decade. next decade. >> Maybe spend a minute before you go >> Maybe spend a minute before you go >> Maybe spend a minute before you go through the buy criteria talking about through the buy criteria talking about through the buy criteria talking about selling more. So what is the process? selling more. So what is the process? selling more. So what is the process? >> We have an investment committee. There's >> We have an investment committee. There's >> We have an investment committee. There's three of us. Myself, Brian, and Eman three of us. Myself, Brian, and Eman three of us. Myself, Brian, and Eman been here all since fun one. We have a been here all since fun one. We have a been here all since fun one. We have a disposition committee. Same thing. We disposition committee. Same thing. We disposition committee. Same thing. We meet. We think a lot of firms do a meet. We think a lot of firms do a meet. We think a lot of firms do a really really good job on the buy. Very really really good job on the buy. Very really really good job on the buy. Very very few firms do a very good job on the very few firms do a very good job on the very few firms do a very good job on the sell, like knowing when to sell, sell, like knowing when to sell, sell, like knowing when to sell, pressuring to sell, and we would we pressuring to sell, and we would we pressuring to sell, and we would we would tell you that the private equity would tell you that the private equity would tell you that the private equity funds tend to do a much better job on funds tend to do a much better job on funds tend to do a much better job on the sell than most like venture growth the sell than most like venture growth the sell than most like venture growth guys. Um and like hedge funds if you do guys. Um and like hedge funds if you do guys. Um and like hedge funds if you do invest public equities or long only invest public equities or long only invest public equities or long only funds like you constantly can buy and funds like you constantly can buy and funds like you constantly can buy and sell. The three of us meet you know one sell. The three of us meet you know one sell. The three of us meet you know one to twice a month and just like walk to twice a month and just like walk to twice a month and just like walk through the portfolio and just talk through the portfolio and just talk through the portfolio and just talk about it like hey there's a round going about it like hey there's a round going about it like hey there's a round going down in this company should we sell like down in this company should we sell like down in this company should we sell like how can we try to position this company how can we try to position this company how can we try to position this company for a sale over the next 12 months? The for a sale over the next 12 months? The for a sale over the next 12 months? The fastest way to get fired at Lead Edge is fastest way to get fired at Lead Edge is fastest way to get fired at Lead Edge is have a company and not tell us when have a company and not tell us when have a company and not tell us when there's a liquidity opportunity or just there's a liquidity opportunity or just there's a liquidity opportunity or just like something's about to happen before like something's about to happen before like something's about to happen before it happens. What does the holding period it happens. What does the holding period it happens. What does the holding period end up being on average then? end up being on average then? end up being on average then? >> I bet our average holds are three and a >> I bet our average holds are three and a >> I bet our average holds are three and a half to four years probably. half to four years probably. half to four years probably. >> Yeah, >> Yeah, >> Yeah, >> we took advantage. Everybody gets all >> we took advantage. Everybody gets all >> we took advantage. Everybody gets all excited by these by our 2015, 2016, excited by these by our 2015, 2016, excited by these by our 2015, 2016, 2017, 2018 returns. Like our 15 and 18 2017, 2018 returns. Like our 15 and 18 2017, 2018 returns. Like our 15 and 18 returns look very good, but it's just returns look very good, but it's just returns look very good, but it's just multiple expansion and we sold. That's multiple expansion and we sold. That's multiple expansion and we sold. That's it. Like if you think you're going to it. Like if you think you're going to it. Like if you think you're going to make a 2x in four years and you make a make a 2x in four years and you make a make a 2x in four years and you make a 4x in two years, it's amazing what it 4x in two years, it's amazing what it 4x in two years, it's amazing what it does to to net IR, right? People forget does to to net IR, right? People forget does to to net IR, right? People forget the reverse happened in 2021. Nobody's the reverse happened in 2021. Nobody's the reverse happened in 2021. Nobody's 20 and 21 funds. I think the venture 20 and 21 funds. I think the venture 20 and 21 funds. I think the venture growth uh ecosystem gets like a bad rap, growth uh ecosystem gets like a bad rap, growth uh ecosystem gets like a bad rap, but it's going to be every alternative but it's going to be every alternative but it's going to be every alternative asset. Their 20 and 21 funds are going asset. Their 20 and 21 funds are going asset. Their 20 and 21 funds are going to be awful relative to earlier funds to be awful relative to earlier funds to be awful relative to earlier funds because you had, you know, people because you had, you know, people because you had, you know, people thought they were going to make, you thought they were going to make, you thought they were going to make, you know, a 4x in, you know, in in two years know, a 4x in, you know, in in two years know, a 4x in, you know, in in two years and are instead making a 1.6x in eight and are instead making a 1.6x in eight and are instead making a 1.6x in eight years. And so like that's going to drive years. And so like that's going to drive years. And so like that's going to drive that's going to have huge impacts on the that's going to have huge impacts on the that's going to have huge impacts on the industry. industry. industry. >> Most software companies try to maximize >> Most software companies try to maximize >> Most software companies try to maximize your time on their app to juice your time on their app to juice your time on their app to juice engagement. Ramp does the exact engagement. Ramp does the exact engagement. Ramp does the exact opposite. Ramp understands that no one opposite. Ramp understands that no one opposite. Ramp understands that no one wants to spend hours chasing receipts, wants to spend hours chasing receipts, wants to spend hours chasing receipts, reviewing expense reports, and checking reviewing expense reports, and checking reviewing expense reports, and checking for policy violations. So they built for policy violations. So they built for policy violations. 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Every investor should know about Rogo Every investor should know about Rogo because ROAI's platform is not just because ROAI's platform is not just because ROAI's platform is not just another generic chatbot. Instead, it was another generic chatbot. Instead, it was another generic chatbot. Instead, it was designed to support how Wall Street designed to support how Wall Street designed to support how Wall Street bankers and investors actually work from bankers and investors actually work from bankers and investors actually work from sourcing, diligence, and modeling to sourcing, diligence, and modeling to sourcing, diligence, and modeling to turning analysis into deliverables. For turning analysis into deliverables. For turning analysis into deliverables. For me, three key things differentiate Rogo. me, three key things differentiate Rogo. me, three key things differentiate Rogo. 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Auditable spreadsheets, investment Auditable spreadsheets, investment Auditable spreadsheets, investment memos, diligence materials, and slide memos, diligence materials, and slide memos, diligence materials, and slide decks that match your standards. This decks that match your standards. This decks that match your standards. This all comes from the fact that ROGO is all comes from the fact that ROGO is all comes from the fact that ROGO is built by finance professionals for built by finance professionals for built by finance professionals for finance professionals. And it's already finance professionals. And it's already finance professionals. And it's already being adopted by some of the most being adopted by some of the most being adopted by some of the most demanding institutions in the world. To demanding institutions in the world. To demanding institutions in the world. To learn more, visit rogo.ai/invest. OpenAI, Cursor, Enthropic, Perplexity, OpenAI, Cursor, Enthropic, Perplexity, and Verscell all have something in and Verscell all have something in and Verscell all have something in common. They all use Work OS. And here's common. They all use Work OS. And here's common. They all use Work OS. And here's why. To achieve enterprise adoption at why. To achieve enterprise adoption at why. To achieve enterprise adoption at scale, you have to deliver on core scale, you have to deliver on core scale, you have to deliver on core capabilities like SSO, SKIM, Arbback, capabilities like SSO, SKIM, Arbback, capabilities like SSO, SKIM, Arbback, and audit logs. That's where work OS and audit logs. That's where work OS and audit logs. That's where work OS comes in. Instead of spending months comes in. Instead of spending months comes in. Instead of spending months building these missionritical building these missionritical building these missionritical capabilities yourself, you can just use capabilities yourself, you can just use capabilities yourself, you can just use work OS APIs to gain all of them on day work OS APIs to gain all of them on day work OS APIs to gain all of them on day zero. That's why so many of the top AI zero. That's why so many of the top AI zero. That's why so many of the top AI teams you hear about already run on work teams you hear about already run on work teams you hear about already run on work OS. Work OS is the fastest way to become OS. Work OS is the fastest way to become OS. Work OS is the fastest way to become enterprise ready and stay focused on enterprise ready and stay focused on enterprise ready and stay focused on what matters most, your product. Visit what matters most, your product. Visit what matters most, your product. Visit works.com to get started. What is the uh works.com to get started. What is the uh works.com to get started. What is the uh most interesting thing about the skill most interesting thing about the skill most interesting thing about the skill of selling and making the transaction of selling and making the transaction of selling and making the transaction happen? Like presumably it's easiest to happen? Like presumably it's easiest to happen? Like presumably it's easiest to sell in private markets when a lot of sell in private markets when a lot of sell in private markets when a lot of other people are really excited about other people are really excited about other people are really excited about buying. Uh you can't just hit sell like buying. Uh you can't just hit sell like buying. Uh you can't just hit sell like in public markets. in public markets. in public markets. >> Correct. >> Correct. >> Correct. >> Um yeah, maybe in like a a bad medium >> Um yeah, maybe in like a a bad medium >> Um yeah, maybe in like a a bad medium good. Like there's different kinds of good. Like there's different kinds of good. Like there's different kinds of outcomes that you'd be selling into. Are outcomes that you'd be selling into. Are outcomes that you'd be selling into. Are most of your sales into everyone else is most of your sales into everyone else is most of your sales into everyone else is excited and you're less excited? excited and you're less excited? excited and you're less excited? >> It can be like everything in between. >> It can be like everything in between. >> It can be like everything in between. Like if a company goes public, it's just Like if a company goes public, it's just Like if a company goes public, it's just hit a 2 to 5x in 3 to seven years hit a 2 to 5x in 3 to seven years hit a 2 to 5x in 3 to seven years >> and then sell >> and then sell >> and then sell >> and then and then like so you're like >> and then and then like so you're like >> and then and then like so you're like the company goes public, you're at like the company goes public, you're at like the company goes public, you're at like a 3.3x a 3.3x a 3.3x in 18 months or 24 months. You're like in 18 months or 24 months. You're like in 18 months or 24 months. You're like that annihilates a 12% or 20% net IR. that annihilates a 12% or 20% net IR. that annihilates a 12% or 20% net IR. It's a great company, but we constantly It's a great company, but we constantly It's a great company, but we constantly are underwriting like what's a forward are underwriting like what's a forward are underwriting like what's a forward net return from here. And we're like, net return from here. And we're like, net return from here. And we're like, well, okay, we made a we made like a 3x well, okay, we made a we made like a 3x well, okay, we made a we made like a 3x and 18 months. That's like an IPO. Um, and 18 months. That's like an IPO. Um, and 18 months. That's like an IPO. Um, in a secondary sale, it's about in a secondary sale, it's about in a secondary sale, it's about underwriting the forward IR in toast, underwriting the forward IR in toast, underwriting the forward IR in toast, which is one of our biggest investments, which is one of our biggest investments, which is one of our biggest investments, which we put like 12% of our fund three which we put like 12% of our fund three which we put like 12% of our fund three into. And we'd always get crap. Our fund into. And we'd always get crap. Our fund into. And we'd always get crap. Our fund three was like a $290 million fund. And three was like a $290 million fund. And three was like a $290 million fund. And we put like 36 million bucks into it. we put like 36 million bucks into it. we put like 36 million bucks into it. And before the IPO, we had sold 180 And before the IPO, we had sold 180 And before the IPO, we had sold 180 million bucks. We think we'd make like million bucks. We think we'd make like million bucks. We think we'd make like 350 to 400 in it total. People like, 350 to 400 in it total. People like, 350 to 400 in it total. People like, "Why are you selling? You don't believe "Why are you selling? You don't believe "Why are you selling? You don't believe in us." We're like, "No, no, all these in us." We're like, "No, no, all these in us." We're like, "No, no, all these other knuckleheads like that invested other knuckleheads like that invested other knuckleheads like that invested alongside us." None of them put 12% of alongside us." None of them put 12% of alongside us." None of them put 12% of their fund in it. And by the way, their fund in it. And by the way, their fund in it. And by the way, somebody is paying us a price in the somebody is paying us a price in the somebody is paying us a price in the secondary markets that we think, you secondary markets that we think, you secondary markets that we think, you know, is just like lunacy. We sold like know, is just like lunacy. We sold like know, is just like lunacy. We sold like in the secondary markets like 40 or 50 in the secondary markets like 40 or 50 in the secondary markets like 40 or 50 bucks in toast. The stock today is like bucks in toast. The stock today is like bucks in toast. The stock today is like 30 bucks. We think it's cheap, but it's 30 bucks. We think it's cheap, but it's 30 bucks. We think it's cheap, but it's just like, by the way, we sold like six just like, by the way, we sold like six just like, by the way, we sold like six years ago. Um, and so it's a constantly years ago. Um, and so it's a constantly years ago. Um, and so it's a constantly underwriting forward IRRa. underwriting forward IRRa. underwriting forward IRRa. >> Okay, now I get to talk about the eight >> Okay, now I get to talk about the eight >> Okay, now I get to talk about the eight buying criteria. Uh, I don't know if you buying criteria. Uh, I don't know if you buying criteria. Uh, I don't know if you want to like tick them off or give us want to like tick them off or give us want to like tick them off or give us some highlights or some highlights or some highlights or >> Okay, some highlights. Uh, so there's >> Okay, some highlights. Uh, so there's >> Okay, some highlights. Uh, so there's eight criteria. I get 10 million plus in eight criteria. I get 10 million plus in eight criteria. I get 10 million plus in revenue. revenue. revenue. Why do you have like product market fit? Why do you have like product market fit? Why do you have like product market fit? Are you growing? Because we don't invest Are you growing? Because we don't invest Are you growing? Because we don't invest in startups. Are you growing like 25% a in startups. Are you growing like 25% a in startups. Are you growing like 25% a year? We generate returns through year? We generate returns through year? We generate returns through growth. Um, we don't use leverage. you growth. Um, we don't use leverage. you growth. Um, we don't use leverage. you have 70% plus gross margins. Why? have 70% plus gross margins. Why? have 70% plus gross margins. Why? Because at the end of the day, you trade Because at the end of the day, you trade Because at the end of the day, you trade on multiples of earnings. Revenue on multiples of earnings. Revenue on multiples of earnings. Revenue multiples are just like shorthand math multiples are just like shorthand math multiples are just like shorthand math for like what what it will be even more for like what what it will be even more for like what what it will be even more multiples or earnings multiples when you multiples or earnings multiples when you multiples or earnings multiples when you uh you know don't grow that fast. uh you know don't grow that fast. uh you know don't grow that fast. There's a reason that Facebook you know There's a reason that Facebook you know There's a reason that Facebook you know gives away like you know electronics in gives away like you know electronics in gives away like you know electronics in the in the vending machines and Dell the in the vending machines and Dell the in the vending machines and Dell charges for Cokes. just like one has 80% charges for Cokes. just like one has 80% charges for Cokes. just like one has 80% gross margins and one has like 15% gross gross margins and one has like 15% gross gross margins and one has like 15% gross margins and we think that just drives at margins and we think that just drives at margins and we think that just drives at the end of the day earnings. Um are you the end of the day earnings. Um are you the end of the day earnings. Um are you recurring? It's like a heck of a lot recurring? It's like a heck of a lot recurring? It's like a heck of a lot easier to invest knowing what revenues easier to invest knowing what revenues easier to invest knowing what revenues will be today. So I know what they'll be will be today. So I know what they'll be will be today. So I know what they'll be in July than they are today. Um are you in July than they are today. Um are you in July than they are today. Um are you capital efficient? This metric is capital efficient? This metric is capital efficient? This metric is probably kept us out of the most probably kept us out of the most probably kept us out of the most trouble. It's like our version of return trouble. It's like our version of return trouble. It's like our version of return on equity. I mean I think it's like on equity. I mean I think it's like on equity. I mean I think it's like Warren Buffett would think we're idiots. Warren Buffett would think we're idiots. Warren Buffett would think we're idiots. Um, are your revenues today greater than Um, are your revenues today greater than Um, are your revenues today greater than your historical cash burn? So, what do I your historical cash burn? So, what do I your historical cash burn? So, what do I mean by that? Are you your 20 revenue? mean by that? Are you your 20 revenue? mean by that? Are you your 20 revenue? Have you burned 80? Like, you know, Have you burned 80? Like, you know, Have you burned 80? Like, you know, every other tech company. every other tech company. every other tech company. >> Cumulatively. Yeah. Have you burned 80 >> Cumulatively. Yeah. Have you burned 80 >> Cumulatively. Yeah. Have you burned 80 since inception or have you burned 10 since inception or have you burned 10 since inception or have you burned 10 since inception? We're looking for like since inception? We're looking for like since inception? We're looking for like this one:1 ratio. In a world where this one:1 ratio. In a world where this one:1 ratio. In a world where capital is a commodity, if you can build capital is a commodity, if you can build capital is a commodity, if you can build a business that's growing nicely while a business that's growing nicely while a business that's growing nicely while burning less than your while burning burning less than your while burning burning less than your while burning less than your revenues, you've got a less than your revenues, you've got a less than your revenues, you've got a pretty good business. Look, we don't pretty good business. Look, we don't pretty good business. Look, we don't invest in startups. If you invest in invest in startups. If you invest in invest in startups. If you invest in startups or $2 million revenue startups or $2 million revenue startups or $2 million revenue companies, then obviously it's harder. companies, then obviously it's harder. companies, then obviously it's harder. Are you profitable at the bottom line? Are you profitable at the bottom line? Are you profitable at the bottom line? Do you have any customer concentration? Do you have any customer concentration? Do you have any customer concentration? Like I just don't want to wake up and Like I just don't want to wake up and Like I just don't want to wake up and find out 40% of my revenues like find out 40% of my revenues like find out 40% of my revenues like disappeared because some customer didn't disappeared because some customer didn't disappeared because some customer didn't decide they didn't want to work with decide they didn't want to work with decide they didn't want to work with you. I want to talk about the price you. I want to talk about the price you. I want to talk about the price you're willing to pay for companies and you're willing to pay for companies and you're willing to pay for companies and where this like how you would plot where this like how you would plot where this like how you would plot yourself on the so much so much of this yourself on the so much so much of this yourself on the so much so much of this sounds like a private equity strategy sounds like a private equity strategy sounds like a private equity strategy but you mentioned toast and it's not but you mentioned toast and it's not but you mentioned toast and it's not like it grow toast was 25 million of like it grow toast was 25 million of like it grow toast was 25 million of revenue growing 150% a year and it was revenue growing 150% a year and it was revenue growing 150% a year and it was like we paid like 500 million bucks it like we paid like 500 million bucks it like we paid like 500 million bucks it was like 20 times revenue people like was like 20 times revenue people like was like 20 times revenue people like that's crazy it's like not when it went that's crazy it's like not when it went that's crazy it's like not when it went from like 10 to 25 so we just try to from like 10 to 25 so we just try to from like 10 to 25 so we just try to build like a forward model and you're build like a forward model and you're build like a forward model and you're like look you could You can pay as high like look you could You can pay as high like look you could You can pay as high as price as you want. You just got to be as price as you want. You just got to be as price as you want. You just got to be right on your exit. You got to be right right on your exit. You got to be right right on your exit. You got to be right on your multip. You know, how people got on your multip. You know, how people got on your multip. You know, how people got in a bunch of trouble in 20 in 2020 and in a bunch of trouble in 20 in 2020 and in a bunch of trouble in 20 in 2020 and 2021. I think how they're going to get 2021. I think how they're going to get 2021. I think how they're going to get in trouble today and all this AI stuff in trouble today and all this AI stuff in trouble today and all this AI stuff is they just assume the exit multiple is is they just assume the exit multiple is is they just assume the exit multiple is 20 to 25 times. That's insanity because 20 to 25 times. That's insanity because 20 to 25 times. That's insanity because when your exit multiple collapses now, when your exit multiple collapses now, when your exit multiple collapses now, so you can pay 20 or 25 times revenues so you can pay 20 or 25 times revenues so you can pay 20 or 25 times revenues and if you're right like some of our and if you're right like some of our and if you're right like some of our companies have been, then it's companies have been, then it's companies have been, then it's fantastic. But you can also be wrong fantastic. But you can also be wrong fantastic. But you can also be wrong like some of our companies have been and like some of our companies have been and like some of our companies have been and you look like an idiot and I think you look like an idiot and I think you look like an idiot and I think investing in Open AI 800 billion is a investing in Open AI 800 billion is a investing in Open AI 800 billion is a little insane personally but like I little insane personally but like I little insane personally but like I don't know if it goes on to do like a tr don't know if it goes on to do like a tr don't know if it goes on to do like a tr a trillion dollars of earnings. Yeah, I a trillion dollars of earnings. Yeah, I a trillion dollars of earnings. Yeah, I I was going to be very wrong. I I should I was going to be very wrong. I I should I was going to be very wrong. I I should have invested. It's almost like have invested. It's almost like have invested. It's almost like shorthander. If you're like if this shorthander. If you're like if this shorthander. If you're like if this company grows and doesn't del like 18 company grows and doesn't del like 18 company grows and doesn't del like 18 months, am I in the money and like can I months, am I in the money and like can I months, am I in the money and like can I make like a decent return for what I'm make like a decent return for what I'm make like a decent return for what I'm paying? And if the answer is like oh am paying? And if the answer is like oh am paying? And if the answer is like oh am I even in the money in 18 months or 20 I even in the money in 18 months or 20 I even in the money in 18 months or 20 month 24 months? Yeah, you're paying way month 24 months? Yeah, you're paying way month 24 months? Yeah, you're paying way too high price. too high price. too high price. >> So, so right now there's this seismic >> So, so right now there's this seismic >> So, so right now there's this seismic thing. You can look at like the thing. You can look at like the thing. You can look at like the constellation and the constellation constellation and the constellation constellation and the constellation software stock price or something as software stock price or something as software stock price or something as like the perfect visual indicator of like the perfect visual indicator of like the perfect visual indicator of what's been going on, which is what's been going on, which is what's been going on, which is >> like a ski slope. >> like a ski slope. >> like a ski slope. >> This intense skepticism of the market >> This intense skepticism of the market >> This intense skepticism of the market that like boring traditional high gross that like boring traditional high gross that like boring traditional high gross margin software businesses are worth margin software businesses are worth margin software businesses are worth like much at all. But I'm curious how like much at all. But I'm curious how like much at all. But I'm curious how you process this moment where I'm sure a you process this moment where I'm sure a you process this moment where I'm sure a lot of the companies you're looking at lot of the companies you're looking at lot of the companies you're looking at are software companies that uh have a are software companies that uh have a are software companies that uh have a lot of the components that make people lot of the components that make people lot of the components that make people fearful of those similar kinds of fearful of those similar kinds of fearful of those similar kinds of companies in public markets. companies in public markets. companies in public markets. >> Our belief for right or wrong is that >> Our belief for right or wrong is that >> Our belief for right or wrong is that the competitive advantage of software the competitive advantage of software the competitive advantage of software company has never been about R&D. We're company has never been about R&D. We're company has never been about R&D. We're not building semiconductor chips. Like not building semiconductor chips. Like not building semiconductor chips. Like we're not it's we're not building we're not it's we're not building we're not it's we're not building biotech and pharma companies. This isn't biotech and pharma companies. This isn't biotech and pharma companies. This isn't that to build like chamber of commerce that to build like chamber of commerce that to build like chamber of commerce software. You too could build this. Like software. You too could build this. Like software. You too could build this. Like you know my mother couldn't. But like my you know my mother couldn't. But like my you know my mother couldn't. But like my brother could no problem. At least an brother could no problem. At least an brother could no problem. At least an engineer. Um so could Microsoft. Any of engineer. Um so could Microsoft. Any of engineer. Um so could Microsoft. Any of our companies in our portfolio. If our companies in our portfolio. If our companies in our portfolio. If Microsoft took 500 people and gave them Microsoft took 500 people and gave them Microsoft took 500 people and gave them a month, each one of our companies could a month, each one of our companies could a month, each one of our companies could be out of business. But they just don't be out of business. But they just don't be out of business. But they just don't care about the chamber of commerce care about the chamber of commerce care about the chamber of commerce market. They don't care about the price market. They don't care about the price market. They don't care about the price optimization market for manufacturing optimization market for manufacturing optimization market for manufacturing companies. um they don't care about like companies. um they don't care about like companies. um they don't care about like the tax the tax software market for a the tax the tax software market for a the tax the tax software market for a very specific niche product. So like the very specific niche product. So like the very specific niche product. So like the software companies like are really about software companies like are really about software companies like are really about like distribution sales and marketing like distribution sales and marketing like distribution sales and marketing customer success client services. So customer success client services. So customer success client services. So we believe that it is the incumbent's we believe that it is the incumbent's we believe that it is the incumbent's game to lose in in software today. Um game to lose in in software today. Um game to lose in in software today. Um there's a reason I'll give you a couple there's a reason I'll give you a couple there's a reason I'll give you a couple examples. Workday examples. Workday examples. Workday has like 98 or 99% gross dollar has like 98 or 99% gross dollar has like 98 or 99% gross dollar retention. It grows like 10 10 15% a retention. It grows like 10 10 15% a retention. It grows like 10 10 15% a year. Oh, it only goes 10% a year. I'm year. Oh, it only goes 10% a year. I'm year. Oh, it only goes 10% a year. I'm sorry. It's like 10 billion of revenue. sorry. It's like 10 billion of revenue. sorry. It's like 10 billion of revenue. Um, it only took like 20 years to get Um, it only took like 20 years to get Um, it only took like 20 years to get there and it does like three billion of there and it does like three billion of there and it does like three billion of free cash flow. Exxon or the hospital free cash flow. Exxon or the hospital free cash flow. Exxon or the hospital system or um, Waro Pinkis or KKR or system or um, Waro Pinkis or KKR or system or um, Waro Pinkis or KKR or Proctor and Gamble probably spent three Proctor and Gamble probably spent three Proctor and Gamble probably spent three to five years like implementing the to five years like implementing the to five years like implementing the software. If you think they're going to software. If you think they're going to software. If you think they're going to like start building their own HR like start building their own HR like start building their own HR software, you're on your mind. Now the software, you're on your mind. Now the software, you're on your mind. Now the guey in how you access it is going to be guey in how you access it is going to be guey in how you access it is going to be far different but actually they already far different but actually they already far different but actually they already have the customer relationships and the have the customer relationships and the have the customer relationships and the only reason they built it is because only reason they built it is because only reason they built it is because Dave Delfield and Neil realized 20 years Dave Delfield and Neil realized 20 years Dave Delfield and Neil realized 20 years ago that Oracle and SAP had really ago that Oracle and SAP had really ago that Oracle and SAP had really crappy products but they have like crappy products but they have like crappy products but they have like thousands of engineers that are like thousands of engineers that are like thousands of engineers that are like trying to build the product much better trying to build the product much better trying to build the product much better and are going to use workday versus like and are going to use workday versus like and are going to use workday versus like Mitchell Green's cousin like vibe coding Mitchell Green's cousin like vibe coding Mitchell Green's cousin like vibe coding his way uh to build workday. his way uh to build workday. his way uh to build workday. At the flip side, why did Koopa get At the flip side, why did Koopa get At the flip side, why did Koopa get built? And the reason that it was able built? And the reason that it was able built? And the reason that it was able to be built is SAP bought Aribba like to be built is SAP bought Aribba like to be built is SAP bought Aribba like and they just like left it for debt. So and they just like left it for debt. So and they just like left it for debt. So they built this like big business. they built this like big business. they built this like big business. They took it public and now it's been They took it public and now it's been They took it public and now it's been sold to to Bravo. So what I actually sold to to Bravo. So what I actually sold to to Bravo. So what I actually worry about to Bravo or any of these big worry about to Bravo or any of these big worry about to Bravo or any of these big private equity funds if they're putting private equity funds if they're putting private equity funds if they're putting a bunch of debt on it's not growing that a bunch of debt on it's not growing that a bunch of debt on it's not growing that fast anymore. If they're putting a bunch fast anymore. If they're putting a bunch fast anymore. If they're putting a bunch of debt on it of debt on it of debt on it and then what they do is they like they and then what they do is they like they and then what they do is they like they like they brag. They like oh yeah we like they brag. They like oh yeah we like they brag. They like oh yeah we drive all our companies to like rule of drive all our companies to like rule of drive all our companies to like rule of 50 businesses. Now, do they end up 50 businesses. Now, do they end up 50 businesses. Now, do they end up cutting a bunch of people in R&D and cutting a bunch of people in R&D and cutting a bunch of people in R&D and sales and marketing and product that sales and marketing and product that sales and marketing and product that they should have that if you were being they should have that if you were being they should have that if you were being run by an entrepreneur with no leverage, run by an entrepreneur with no leverage, run by an entrepreneur with no leverage, you would have kept and and is now I I you would have kept and and is now I I you would have kept and and is now I I worry that a bunch of these private worry that a bunch of these private worry that a bunch of these private equity owned assets that are overlevered equity owned assets that are overlevered equity owned assets that are overlevered are ripe for disruption versus like are ripe for disruption versus like are ripe for disruption versus like independent software companies that are independent software companies that are independent software companies that are that are focused on growth that are that are focused on growth that are that are focused on growth that are trying to innovate. And I like to remind trying to innovate. And I like to remind trying to innovate. And I like to remind people that the um if you look at people that the um if you look at people that the um if you look at e-commerce, everybody in 99 and 2000, e-commerce, everybody in 99 and 2000, e-commerce, everybody in 99 and 2000, everybody thought every big box retailer everybody thought every big box retailer everybody thought every big box retailer was going out of business. But if you was going out of business. But if you was going out of business. But if you look at the top 50 largest e-commerce look at the top 50 largest e-commerce look at the top 50 largest e-commerce companies in the United States, you companies in the United States, you companies in the United States, you know, yes, Amazon is number one. You know, yes, Amazon is number one. You know, yes, Amazon is number one. You know who like two through 10 are? know who like two through 10 are? know who like two through 10 are? Walmart, Home Depot, Lowe's, Macy's, Walmart, Home Depot, Lowe's, Macy's, Walmart, Home Depot, Lowe's, Macy's, Target. I mean, Sax is a crappy company. Target. I mean, Sax is a crappy company. Target. I mean, Sax is a crappy company. Their online business is actually pretty Their online business is actually pretty Their online business is actually pretty good. Nean Marcus, same thing. a lot of good. Nean Marcus, same thing. a lot of good. Nean Marcus, same thing. a lot of the incumbents will win. Now again, you the incumbents will win. Now again, you the incumbents will win. Now again, you know, Montgomery Ward, know, Montgomery Ward, know, Montgomery Ward, Kmart, Sears, busted bust for either Kmart, Sears, busted bust for either Kmart, Sears, busted bust for either like overlevered, didn't innovate. So like overlevered, didn't innovate. So like overlevered, didn't innovate. So like for us, that's what we're like for us, that's what we're like for us, that's what we're constantly thinking about. constantly thinking about. constantly thinking about. >> Does that mean that right now feels like >> Does that mean that right now feels like >> Does that mean that right now feels like an especially opportune time for your an especially opportune time for your an especially opportune time for your style because entry multiples are lower? style because entry multiples are lower? style because entry multiples are lower? >> I think the best riskadjusted returns >> I think the best riskadjusted returns >> I think the best riskadjusted returns right now are in right now are in right now are in public software names. By the way, when public software names. By the way, when public software names. By the way, when you b, you know, Warren Buffet says, you b, you know, Warren Buffet says, you b, you know, Warren Buffet says, "Buy when everybody, you know, is "Buy when everybody, you know, is "Buy when everybody, you know, is fearful and sell when like everybody's fearful and sell when like everybody's fearful and sell when like everybody's super excited, people hate software." super excited, people hate software." super excited, people hate software." You know, when we bought a bunch of our You know, when we bought a bunch of our You know, when we bought a bunch of our bite dance stock two years ago when bite dance stock two years ago when bite dance stock two years ago when everybody hated China, Alibaba has everybody hated China, Alibaba has everybody hated China, Alibaba has doubled off its lows and doesn't grow doubled off its lows and doesn't grow doubled off its lows and doesn't grow and trades at 15 times earnings. and trades at 15 times earnings. and trades at 15 times earnings. >> If you think about the uh the CV like >> If you think about the uh the CV like >> If you think about the uh the CV like the very specialist type buys that the very specialist type buys that the very specialist type buys that you'll do. Can you explain an example of you'll do. Can you explain an example of you'll do. Can you explain an example of one of those? one of those? one of those? >> So, we like to use like the house >> So, we like to use like the house >> So, we like to use like the house analogy. You walk down the street, you analogy. You walk down the street, you analogy. You walk down the street, you go into apartment building, you're like, go into apartment building, you're like, go into apartment building, you're like, "My apartment needs to have like these "My apartment needs to have like these "My apartment needs to have like these six things. You can go in the front door six things. You can go in the front door six things. You can go in the front door and you can lead the primary round um and you can lead the primary round um and you can lead the primary round um and put money on the balance sheet or and put money on the balance sheet or and put money on the balance sheet or you can buy the whole business. You can you can buy the whole business. You can you can buy the whole business. You can go in the side door and buy like an go in the side door and buy like an go in the side door and buy like an early uh investor or early employee out, early uh investor or early employee out, early uh investor or early employee out, but like maybe that's not available. So, but like maybe that's not available. So, but like maybe that's not available. So, we'll go through the basement window we'll go through the basement window we'll go through the basement window with a pickaxe and buy like a with a pickaxe and buy like a with a pickaxe and buy like a derivative." Because if you run a derivative." Because if you run a derivative." Because if you run a business and this can of Pepsi owns 30% business and this can of Pepsi owns 30% business and this can of Pepsi owns 30% of your business and I go to the glass of your business and I go to the glass of your business and I go to the glass that is an investor in the can of that is an investor in the can of that is an investor in the can of Pepsi's fund and that like is there half Pepsi's fund and that like is there half Pepsi's fund and that like is there half the LPS and I like literally buy that the LPS and I like literally buy that the LPS and I like literally buy that out and you own 30% and I buy half the out and you own 30% and I buy half the out and you own 30% and I buy half the fund. I just bought 15% of your company. fund. I just bought 15% of your company. fund. I just bought 15% of your company. It's the same damn thing. It's just a It's the same damn thing. It's just a It's the same damn thing. It's just a derivative. Um now do you have as much derivative. Um now do you have as much derivative. Um now do you have as much control? No. Do you have as much control? No. Do you have as much control? No. Do you have as much insight? No. But like you trade off insight? No. But like you trade off insight? No. But like you trade off price for access. We made a big price for access. We made a big price for access. We made a big investment in uh in Zoom. Um, so we investment in uh in Zoom. Um, so we investment in uh in Zoom. Um, so we couldn't go into the front door. The couldn't go into the front door. The couldn't go into the front door. The company didn't need money. We sure as company didn't need money. We sure as company didn't need money. We sure as heck weren't buying the entire business. heck weren't buying the entire business. heck weren't buying the entire business. Um, there was you couldn't buy Um, there was you couldn't buy Um, there was you couldn't buy secondary. There was secondary to buy. secondary. There was secondary to buy. secondary. There was secondary to buy. You couldn't buy it because Sequoia You couldn't buy it because Sequoia You couldn't buy it because Sequoia would roll for you. They're smart. would roll for you. They're smart. would roll for you. They're smart. They're not dumb. They're like, "Why They're not dumb. They're like, "Why They're not dumb. They're like, "Why would we let these knuckleheads in?" would we let these knuckleheads in?" would we let these knuckleheads in?" Like, we'll take the stock and make two Like, we'll take the stock and make two Like, we'll take the stock and make two to three times our money. And the to three times our money. And the to three times our money. And the company was one that took a long time to company was one that took a long time to company was one that took a long time to get funded and like wasn't backed by get funded and like wasn't backed by get funded and like wasn't backed by Sequoia. They wanted it. It was back for Sequoia. They wanted it. It was back for Sequoia. They wanted it. It was back for random Chinese people and Chinese funds. random Chinese people and Chinese funds. random Chinese people and Chinese funds. So, there was it was actually second So, there was it was actually second So, there was it was actually second year by, but you couldn't because year by, but you couldn't because year by, but you couldn't because they're over. So, we're like, "Huh, why they're over. So, we're like, "Huh, why they're over. So, we're like, "Huh, why don't we go to this fund that like has don't we go to this fund that like has don't we go to this fund that like has stock and their LPs have been in this stock and their LPs have been in this stock and their LPs have been in this thing for 10 years." Like, maybe their thing for 10 years." Like, maybe their thing for 10 years." Like, maybe their LPs want to sell and we can do it one of LPs want to sell and we can do it one of LPs want to sell and we can do it one of two ways. Like, we'll just buy your two ways. Like, we'll just buy your two ways. Like, we'll just buy your position in the fund and we'll know position in the fund and we'll know position in the fund and we'll know exactly how much we'll know exactly how exactly how much we'll know exactly how exactly how much we'll know exactly how much Zoom we have to it. Or why don't much Zoom we have to it. Or why don't much Zoom we have to it. Or why don't you just create like a new vehicle? Any you just create like a new vehicle? Any you just create like a new vehicle? Any LP that wants to sell, we'll step into LP that wants to sell, we'll step into LP that wants to sell, we'll step into their shoes. Well, if you own 2% of Zoom their shoes. Well, if you own 2% of Zoom their shoes. Well, if you own 2% of Zoom and half the LPs want to sell and I then and half the LPs want to sell and I then and half the LPs want to sell and I then step in those shoes, I now own 1% of step in those shoes, I now own 1% of step in those shoes, I now own 1% of Zoom. And if I say to you, listen, we Zoom. And if I say to you, listen, we Zoom. And if I say to you, listen, we get to vote them like we own them, but get to vote them like we own them, but get to vote them like we own them, but you still hold it. So if you if you you still hold it. So if you if you you still hold it. So if you if you sell, you know, if the company gets an sell, you know, if the company gets an sell, you know, if the company gets an M&A offer and you get to vote, you have M&A offer and you get to vote, you have M&A offer and you get to vote, you have to call us day 181 of the IPO after the to call us day 181 of the IPO after the to call us day 181 of the IPO after the lockup, you got to give us the stock. We lockup, you got to give us the stock. We lockup, you got to give us the stock. We just we just bought um the position in a just we just bought um the position in a just we just bought um the position in a world where LPS and GPS are desperate world where LPS and GPS are desperate world where LPS and GPS are desperate for liquidity. That part of our business for liquidity. That part of our business for liquidity. That part of our business is absolutely booming. And that part of is absolutely booming. And that part of is absolutely booming. And that part of our business uh is headed by Tim Beamer, our business uh is headed by Tim Beamer, our business uh is headed by Tim Beamer, who's one of my oper one of my partners who's one of my oper one of my partners who's one of my oper one of my partners who was actually a Notre Dame alum as who was actually a Notre Dame alum as who was actually a Notre Dame alum as well. If I think about the dollars well. If I think about the dollars well. If I think about the dollars deployed I don't know last year over the deployed I don't know last year over the deployed I don't know last year over the next year how much of it is direct next year how much of it is direct next year how much of it is direct capital on a balance sheet secondaries capital on a balance sheet secondaries capital on a balance sheet secondaries something creative like what you something creative like what you something creative like what you >> 70% creative balance sheet >> 70% creative balance sheet >> 70% creative balance sheet >> 70% is special sets or like secondary >> 70% is special sets or like secondary >> 70% is special sets or like secondary >> yeah and by the way we will evaluate in >> yeah and by the way we will evaluate in >> yeah and by the way we will evaluate in an IC a public position a control buyout an IC a public position a control buyout an IC a public position a control buyout a minority deal or a special sit like it a minority deal or a special sit like it a minority deal or a special sit like it could be you could hit four different could be you could hit four different could be you could hit four different things in one week And literally we just things in one week And literally we just things in one week And literally we just all has we underwite the same return. all has we underwite the same return. all has we underwite the same return. But today the opportunity is in it's But today the opportunity is in it's But today the opportunity is in it's only gonna we are a market draw down only gonna we are a market draw down only gonna we are a market draw down away from it exploding in in value or away from it exploding in in value or away from it exploding in in value or like exploding in stuff to do. like exploding in stuff to do. like exploding in stuff to do. >> So the hard part it seems like is >> So the hard part it seems like is >> So the hard part it seems like is finding a company that has six of the finding a company that has six of the finding a company that has six of the eight criteria that you can also buy at eight criteria that you can also buy at eight criteria that you can also buy at a multiple that you're excited about for a multiple that you're excited about for a multiple that you're excited about for the forward return. What percent of the forward return. What percent of the forward return. What percent of companies meet like of the 9,000 or companies meet like of the 9,000 or companies meet like of the 9,000 or whatever meet like all eight criteria? whatever meet like all eight criteria? whatever meet like all eight criteria? >> By the way, no correlation how it >> By the way, no correlation how it >> By the way, no correlation how it performs either. If we do like an eight performs either. If we do like an eight performs either. If we do like an eight criteria deal versus like a five criteria deal versus like a five criteria deal versus like a five criteria deal, there's like actually no criteria deal, there's like actually no criteria deal, there's like actually no correlation to like it was a better correlation to like it was a better correlation to like it was a better deal. deal. deal. >> What about if you What about like four >> What about if you What about like four >> What about if you What about like four or three? or three? or three? >> We've never looked because we um so what >> We've never looked because we um so what >> We've never looked because we um so what we try to do is if you say it must meet we try to do is if you say it must meet we try to do is if you say it must meet eight criteria, 9,000 companies becomes eight criteria, 9,000 companies becomes eight criteria, 9,000 companies becomes 90. 90. 90. >> Okay. >> Okay. >> Okay. >> To do five or seven deals a year, it >> To do five or seven deals a year, it >> To do five or seven deals a year, it just doesn't work. Um, and so for us, just doesn't work. Um, and so for us, just doesn't work. Um, and so for us, what we say is it just like must meet what we say is it just like must meet what we say is it just like must meet five. That's about a 10% yield. We're five. That's about a 10% yield. We're five. That's about a 10% yield. We're trying to get to like 900 to a set of trying to get to like 900 to a set of trying to get to like 900 to a set of companies that we can then like actually companies that we can then like actually companies that we can then like actually do work on. So you have 900 companies do work on. So you have 900 companies do work on. So you have 900 companies that meet five or more criteria. that meet five or more criteria. that meet five or more criteria. You get to You get to You get to you do work on about a you do diligence you do work on about a you do diligence you do work on about a you do diligence on about 150 to 175 to do five to seven on about 150 to 175 to do five to seven on about 150 to 175 to do five to seven deals a year. And you're like, why not deals a year. And you're like, why not deals a year. And you're like, why not more? I'd love to, but like we're cold more? I'd love to, but like we're cold more? I'd love to, but like we're cold calling entrepreneurs. They're like, oh, calling entrepreneurs. They're like, oh, calling entrepreneurs. They're like, oh, I'm sorry. I want to sell my business I'm sorry. I want to sell my business I'm sorry. I want to sell my business tomorrow. Like, oh, you just happen to tomorrow. Like, oh, you just happen to tomorrow. Like, oh, you just happen to call me on this day. No, the sales call me on this day. No, the sales call me on this day. No, the sales cycles can be a decade. Um, and it's cycles can be a decade. Um, and it's cycles can be a decade. Um, and it's about staying in touch as entrepreneur about staying in touch as entrepreneur about staying in touch as entrepreneur because we're not the only ones calling because we're not the only ones calling because we're not the only ones calling them. There's great firms like Summit or them. There's great firms like Summit or them. There's great firms like Summit or TA or Insight or, you know, Bessemer or TA or Insight or, you know, Bessemer or TA or Insight or, you know, Bessemer or Battery and like great firms. And so, Battery and like great firms. And so, Battery and like great firms. And so, it's like, well, ask the entrepreneur, it's like, well, ask the entrepreneur, it's like, well, ask the entrepreneur, how do they need help? Try to like tease how do they need help? Try to like tease how do they need help? Try to like tease information out of them. Oh, you sell information out of them. Oh, you sell information out of them. Oh, you sell into like the consumer space. You want into like the consumer space. You want into like the consumer space. You want to meet the former CEO K Pomolive. Um, to meet the former CEO K Pomolive. Um, to meet the former CEO K Pomolive. Um, and you're doing that to try to like and you're doing that to try to like and you're doing that to try to like build a relationship with somebody. So build a relationship with somebody. So build a relationship with somebody. So if five criteria companies don't if five criteria companies don't if five criteria companies don't outperform eight criteria companies, outperform eight criteria companies, outperform eight criteria companies, doesn't that imply the criteria aren't doesn't that imply the criteria aren't doesn't that imply the criteria aren't predictive? So then why have the predictive? So then why have the predictive? So then why have the criteria? criteria? criteria? >> Because you need to set a framework for >> Because you need to set a framework for >> Because you need to set a framework for what to focus on and what not to focus what to focus on and what not to focus what to focus on and what not to focus on. That's it. Like it's just getting to on. That's it. Like it's just getting to on. That's it. Like it's just getting to a small predictive necessary. not a small predictive necessary. not a small predictive necessary. not predictive, but it's getting us to a predictive, but it's getting us to a predictive, but it's getting us to a small enough pool to like it's like small enough pool to like it's like small enough pool to like it's like knowing your strike zone is like my knowing your strike zone is like my knowing your strike zone is like my partner is a big baseball fan that uses partner is a big baseball fan that uses partner is a big baseball fan that uses a baseball analogy like Ted Williams a baseball analogy like Ted Williams a baseball analogy like Ted Williams knew in the hitting zone exactly where knew in the hitting zone exactly where knew in the hitting zone exactly where to swing and what is probabilities for to swing and what is probabilities for to swing and what is probabilities for swinging the ball. Like yes, you can hit swinging the ball. Like yes, you can hit swinging the ball. Like yes, you can hit a ball 2 in above home plate and it a ball 2 in above home plate and it a ball 2 in above home plate and it could be a grand slam and have hit the could be a grand slam and have hit the could be a grand slam and have hit the ball the farthest you've ever hit it, ball the farthest you've ever hit it, ball the farthest you've ever hit it, but if you do that over an entire but if you do that over an entire but if you do that over an entire career, your entire career won't be very career, your entire career won't be very career, your entire career won't be very long. Um, and so it just enables us to long. Um, and so it just enables us to long. Um, and so it just enables us to know like what pitches to swing at. Our know like what pitches to swing at. Our know like what pitches to swing at. Our biggest mistakes have honestly been not biggest mistakes have honestly been not biggest mistakes have honestly been not swinging at the pitches when they were swinging at the pitches when they were swinging at the pitches when they were in our strike zone. And I think that's in our strike zone. And I think that's in our strike zone. And I think that's like what we've learned over the last 15 like what we've learned over the last 15 like what we've learned over the last 15 years to get more comfortable and like years to get more comfortable and like years to get more comfortable and like when it's in our strike zone, swing at when it's in our strike zone, swing at when it's in our strike zone, swing at it. it. it. >> How do you train these young people to >> How do you train these young people to >> How do you train these young people to be able to get all this information to be able to get all this information to be able to get all this information to know whether or not it's an eight-point know whether or not it's an eight-point know whether or not it's an eight-point score or whatever out of an score or whatever out of an score or whatever out of an entrepreneur? Like what is the art of entrepreneur? Like what is the art of entrepreneur? Like what is the art of getting someone on the phone and then getting someone on the phone and then getting someone on the phone and then actually getting them to tell you the actually getting them to tell you the actually getting them to tell you the information that you need? information that you need? information that you need? >> It is incredible what people will tell >> It is incredible what people will tell >> It is incredible what people will tell you on the phone. People are like, "Wait you on the phone. People are like, "Wait you on the phone. People are like, "Wait a second, you just like call people and a second, you just like call people and a second, you just like call people and they talk. People love to talk." Um, they talk. People love to talk." Um, they talk. People love to talk." Um, it's investigative journalism with it's investigative journalism with it's investigative journalism with sales. We tend to hire people that are like former athletes. people that are like former athletes. But like getting a C or a D on a test is But like getting a C or a D on a test is But like getting a C or a D on a test is not your like biggest failure. dropping not your like biggest failure. dropping not your like biggest failure. dropping the ball at like the Rose Bowl or like the ball at like the Rose Bowl or like the ball at like the Rose Bowl or like not making the Olympic team, that's like not making the Olympic team, that's like not making the Olympic team, that's like failure. And so you're looking for failure. And so you're looking for failure. And so you're looking for people that are like insanely people that are like insanely people that are like insanely persistent. persistent. persistent. People that are really inquisitive People that are really inquisitive People that are really inquisitive and and then it's just, hey, and and then it's just, hey, and and then it's just, hey, Patrick, pretend you're toast. We're Patrick, pretend you're toast. We're Patrick, pretend you're toast. We're doing work on the restaurant point of doing work on the restaurant point of doing work on the restaurant point of sales system space. I read a bunch of sales system space. I read a bunch of sales system space. I read a bunch of articles that like sounds like you're articles that like sounds like you're articles that like sounds like you're kicking butt. Oh, by the way, I just kicking butt. Oh, by the way, I just kicking butt. Oh, by the way, I just talked to like Square and Clover and you talked to like Square and Clover and you talked to like Square and Clover and you know, set a couple. We'd love to talk to know, set a couple. We'd love to talk to know, set a couple. We'd love to talk to you on the phone. And oh, by the way, you on the phone. And oh, by the way, you on the phone. And oh, by the way, I'm sure you're getting bombarded by I'm sure you're getting bombarded by I'm sure you're getting bombarded by other people, but by the way, we're other people, but by the way, we're other people, but by the way, we're we're different than a lot of firms. A we're different than a lot of firms. A we're different than a lot of firms. A lot of our capital comes from world lot of our capital comes from world lot of our capital comes from world class exacts. Like, oh, by the way, one class exacts. Like, oh, by the way, one class exacts. Like, oh, by the way, one of our LPs, the former CEO Wendy's. We'd of our LPs, the former CEO Wendy's. We'd of our LPs, the former CEO Wendy's. We'd be happy to talk to them if you want to be happy to talk to them if you want to be happy to talk to them if you want to meet these people. Huh? Sure. Love to meet these people. Huh? Sure. Love to meet these people. Huh? Sure. Love to chat. By the way, we used to get to cold chat. By the way, we used to get to cold chat. By the way, we used to get to cold call people like when when Brian and I call people like when when Brian and I call people like when when Brian and I on email were doing this like literally on email were doing this like literally on email were doing this like literally cold call people and you like you feel cold call people and you like you feel cold call people and you like you feel like the person who calls you at 6 PM, like the person who calls you at 6 PM, like the person who calls you at 6 PM, you know, and you know, 20 years ago, you know, and you know, 20 years ago, you know, and you know, 20 years ago, you like slam the phone done on today. you like slam the phone done on today. you like slam the phone done on today. It's like my you guys get to send emails It's like my you guys get to send emails It's like my you guys get to send emails to people, give me a break. Uh we to people, give me a break. Uh we to people, give me a break. Uh we actually try to now encourage some of actually try to now encourage some of actually try to now encourage some of the analysts to start calling people. the analysts to start calling people. the analysts to start calling people. The biggest issue is like it's hard to The biggest issue is like it's hard to The biggest issue is like it's hard to get people cell phone numbers versus get people cell phone numbers versus get people cell phone numbers versus like, you know, work phones. like, you know, work phones. like, you know, work phones. >> Um >> Um >> Um >> and it's just like once you get the >> and it's just like once you get the >> and it's just like once you get the person on the phone, you just have to person on the phone, you just have to person on the phone, you just have to show knowledge. That's where, by the show knowledge. That's where, by the show knowledge. That's where, by the way, AI is incredible. It's like you way, AI is incredible. It's like you way, AI is incredible. It's like you give every analyst an associate, you give every analyst an associate, you give every analyst an associate, you give them like the power of knowledge give them like the power of knowledge give them like the power of knowledge and you can sound super smart and you and you can sound super smart and you and you can sound super smart and you won't get everything. It's like, hey, I won't get everything. It's like, hey, I won't get everything. It's like, hey, I saw on LinkedIn you have like 80 saw on LinkedIn you have like 80 saw on LinkedIn you have like 80 employees. So, what do you like 10 employees. So, what do you like 10 employees. So, what do you like 10 million revenue, 15 million revenue? Oh, million revenue, 15 million revenue? Oh, million revenue, 15 million revenue? Oh, I see like your employee cost growing I see like your employee cost growing I see like your employee cost growing like 80% a year. What are you growing like 80% a year. What are you growing like 80% a year. What are you growing like 150%. Not that fast like oh what like 150%. Not that fast like oh what like 150%. Not that fast like oh what like 100%. Yeah, around there. So, it's like 100%. Yeah, around there. So, it's like 100%. Yeah, around there. So, it's like it's like trying numbers like it's like trying numbers like it's like trying numbers >> if you think about this machine. And so >> if you think about this machine. And so >> if you think about this machine. And so we've got this very unique LP base. We we've got this very unique LP base. We we've got this very unique LP base. We do, you know, 9,000 calls, 5 to seven do, you know, 9,000 calls, 5 to seven do, you know, 9,000 calls, 5 to seven investments per year. investments per year. investments per year. >> We just raised our seventh fund. It was >> We just raised our seventh fund. It was >> We just raised our seventh fund. It was three and a half billion. three and a half billion. three and a half billion. >> Okay. So three and a half billion dollar >> Okay. So three and a half billion dollar >> Okay. So three and a half billion dollar fund. Um two to two and a half%, you fund. Um two to two and a half%, you fund. Um two to two and a half%, you know, net IRA or net netic to your know, net IRA or net netic to your know, net IRA or net netic to your investors. So that's kind of the investors. So that's kind of the investors. So that's kind of the machine. machine. machine. >> Where do you feel the most tempted to go >> Where do you feel the most tempted to go >> Where do you feel the most tempted to go tinker on the machine for the next tinker on the machine for the next tinker on the machine for the next decade? Like how do you hope the machine decade? Like how do you hope the machine decade? Like how do you hope the machine >> improves? continuing to >> improves? continuing to >> improves? continuing to as the firm gets bigger. as the firm gets bigger. as the firm gets bigger. How do you build a culture of teaching How do you build a culture of teaching How do you build a culture of teaching people to still be creative scrappy people to still be creative scrappy people to still be creative scrappy hustlers? That's the most important hustlers? That's the most important hustlers? That's the most important thing. Like how do we get creative and thing. Like how do we get creative and thing. Like how do we get creative and do CVS? We were doing CVS and nobody do CVS? We were doing CVS and nobody do CVS? We were doing CVS and nobody wanted to do CVS. We didn't know they wanted to do CVS. We didn't know they wanted to do CVS. We didn't know they were called CVs. We just thought it was were called CVs. We just thought it was were called CVs. We just thought it was paying somebody a profit share. Um it's paying somebody a profit share. Um it's paying somebody a profit share. Um it's like continuing to innovate on that. like continuing to innovate on that. like continuing to innovate on that. What's really interesting is the What's really interesting is the What's really interesting is the secondary markets now for some of these secondary markets now for some of these secondary markets now for some of these names are so liquid. So actually you names are so liquid. So actually you names are so liquid. So actually you almost don't even have to underwrite to almost don't even have to underwrite to almost don't even have to underwrite to this thing going public. It's like can this thing going public. It's like can this thing going public. It's like can it just get big enough with enough it just get big enough with enough it just get big enough with enough escape velocity where I can then sell escape velocity where I can then sell escape velocity where I can then sell out? out? out? >> If you think about all the investments >> If you think about all the investments >> If you think about all the investments you've made the last 5 years or you've made the last 5 years or you've made the last 5 years or something. How often are you like something. How often are you like something. How often are you like personally excited about the company and personally excited about the company and personally excited about the company and its product? Frankly, this is what its product? Frankly, this is what its product? Frankly, this is what drives me nuts about uh a lot of people drives me nuts about uh a lot of people drives me nuts about uh a lot of people in the venture capital ecosystem is like in the venture capital ecosystem is like in the venture capital ecosystem is like they think they're actually like like they think they're actually like like they think they're actually like like changing the world and everybody should changing the world and everybody should changing the world and everybody should which they are, but they should tell which they are, but they should tell which they are, but they should tell everybody about it and they're like everybody about it and they're like everybody about it and they're like doing God's greatest gift to mankind. doing God's greatest gift to mankind. doing God's greatest gift to mankind. Like we don't think that we love helping Like we don't think that we love helping Like we don't think that we love helping entrepreneurs. Like that is actually entrepreneurs. Like that is actually entrepreneurs. Like that is actually what gets me excited and gets us up in what gets me excited and gets us up in what gets me excited and gets us up in the morning. I think gets everybody up the morning. I think gets everybody up the morning. I think gets everybody up at Lead Edge is like helping an at Lead Edge is like helping an at Lead Edge is like helping an entrepreneur try to bend the curve and entrepreneur try to bend the curve and entrepreneur try to bend the curve and like make that customer intro and like like make that customer intro and like like make that customer intro and like help find that great CFO um or the audit help find that great CFO um or the audit help find that great CFO um or the audit chair or whatever. We love making chair or whatever. We love making chair or whatever. We love making customer intros. Like that's what gets customer intros. Like that's what gets customer intros. Like that's what gets us the most excited and I and I think we us the most excited and I and I think we us the most excited and I and I think we are still actually just scratching the are still actually just scratching the are still actually just scratching the surface on how we can leverage our LP. surface on how we can leverage our LP. surface on how we can leverage our LP. >> How often do you control the business? >> How often do you control the business? >> How often do you control the business? >> We are in a control position about a >> We are in a control position about a >> We are in a control position about a third of the time. third of the time. third of the time. >> And when when that's the case, how >> And when when that's the case, how >> And when when that's the case, how different is that? different is that? different is that? >> It hopefully should be no different at >> It hopefully should be no different at >> It hopefully should be no different at all, but there's less knuckleheads all, but there's less knuckleheads all, but there's less knuckleheads around the table. Um there's less people around the table. Um there's less people around the table. Um there's less people around the table. And what's really around the table. And what's really around the table. And what's really interesting is when you have a lot of interesting is when you have a lot of interesting is when you have a lot of different people around the table, you different people around the table, you different people around the table, you can have a lot of different competing can have a lot of different competing can have a lot of different competing interests. And so it's about building interests. And so it's about building interests. And so it's about building consensus. Um, and you have people that consensus. Um, and you have people that consensus. Um, and you have people that are in at one cost. Well, that's why all are in at one cost. Well, that's why all are in at one cost. Well, that's why all there's all these 20 and 2021s companies there's all these 20 and 2021s companies there's all these 20 and 2021s companies haven't sold. Like there's these late haven't sold. Like there's these late haven't sold. Like there's these late stage guys that are like, "Oh, just get stage guys that are like, "Oh, just get stage guys that are like, "Oh, just get me out. I own the pref. I'll make a 1x me out. I own the pref. I'll make a 1x me out. I own the pref. I'll make a 1x today or I'll make a 1x in a decade." today or I'll make a 1x in a decade." today or I'll make a 1x in a decade." But we don't go into companies and say we're replacing the entire management. we're replacing the entire management. This is not what we do. When we invest This is not what we do. When we invest This is not what we do. When we invest in a business and when we exit, it's in a business and when we exit, it's in a business and when we exit, it's something like 75% of the time, the something like 75% of the time, the something like 75% of the time, the person who was running the business when person who was running the business when person who was running the business when we invest is still involved in the we invest is still involved in the we invest is still involved in the company. It may not be running it, but company. It may not be running it, but company. It may not be running it, but it's like back people who just want to it's like back people who just want to it's like back people who just want to build awesome businesses and great build awesome businesses and great build awesome businesses and great companies and like it's like listen, if companies and like it's like listen, if companies and like it's like listen, if I'm not the right CEO, well then make me I'm not the right CEO, well then make me I'm not the right CEO, well then make me the chairman of the board or make me the the chairman of the board or make me the the chairman of the board or make me the chief customer officer or make me the chief customer officer or make me the chief customer officer or make me the chief product officer, whatever. that um chief product officer, whatever. that um chief product officer, whatever. that um that's what's really important. that's what's really important. that's what's really important. >> I want to go back to the culture thing. >> I want to go back to the culture thing. >> I want to go back to the culture thing. Yeah. The lead edge culture. I mean, Yeah. The lead edge culture. I mean, Yeah. The lead edge culture. I mean, what have you learned about culture in what have you learned about culture in what have you learned about culture in the many years now that you've been the many years now that you've been the many years now that you've been doing this and and especially given this doing this and and especially given this doing this and and especially given this is the thing that you're you want to is the thing that you're you want to is the thing that you're you want to keep nurturing? keep nurturing? keep nurturing? >> I didn't think I appreciated how much >> I didn't think I appreciated how much >> I didn't think I appreciated how much culture comes from the top. Um and so culture comes from the top. Um and so culture comes from the top. Um and so like follow-ups, send handwritten thank like follow-ups, send handwritten thank like follow-ups, send handwritten thank you notes. I've sent handwritten thank you notes. I've sent handwritten thank you notes. I've sent handwritten thank you notes to everybody I meet. Almost you notes to everybody I meet. Almost you notes to everybody I meet. Almost everybody I meet like every everybody I meet like every everybody I meet like every entrepreneur, every company. Guess guess entrepreneur, every company. Guess guess entrepreneur, every company. Guess guess who also does now? The 22-y old analyst. who also does now? The 22-y old analyst. who also does now? The 22-y old analyst. And by the way, we track it and report And by the way, we track it and report And by the way, we track it and report on it. And you know, if you just treat on it. And you know, if you just treat on it. And you know, if you just treat people the way you want to be treated, people the way you want to be treated, people the way you want to be treated, like that just flows. We've built a like that just flows. We've built a like that just flows. We've built a culture of like culture of like culture of like treat LPS like you yourself want to be treat LPS like you yourself want to be treat LPS like you yourself want to be treated. People appreciate that and it treated. People appreciate that and it treated. People appreciate that and it comes from the top. And like the comes from the top. And like the comes from the top. And like the intellectual honesty comes from my intellectual honesty comes from my intellectual honesty comes from my partner Nema. A lot of the creativity partner Nema. A lot of the creativity partner Nema. A lot of the creativity comes from my partner Brian. Now, of comes from my partner Brian. Now, of comes from my partner Brian. Now, of course, as you get to be 85, 90 people course, as you get to be 85, 90 people course, as you get to be 85, 90 people at a firm, we've built like a real at a firm, we've built like a real at a firm, we've built like a real training program, which is a result of a training program, which is a result of a training program, which is a result of a lot of work Nean and like our our COO lot of work Nean and like our our COO lot of work Nean and like our our COO Suz's done and that team and the Suz's done and that team and the Suz's done and that team and the recruiting team. We didn't have like recruiting team. We didn't have like recruiting team. We didn't have like weekly IC meetings before like three or weekly IC meetings before like three or weekly IC meetings before like three or four years ago. Why? Because I was the four years ago. Why? Because I was the four years ago. Why? Because I was the three of us. We talk every day. three of us. We talk every day. three of us. We talk every day. >> Um, and so it's just like building >> Um, and so it's just like building >> Um, and so it's just like building processes in place. processes in place. processes in place. >> Can you talk about this crazy one-on-one >> Can you talk about this crazy one-on-one >> Can you talk about this crazy one-on-one thing you do with every employee? thing you do with every employee? thing you do with every employee? >> I got the idea from Tom Barnes at Excel >> I got the idea from Tom Barnes at Excel >> I got the idea from Tom Barnes at Excel Kickare. he's built a true machine in Kickare. he's built a true machine in Kickare. he's built a true machine in Excel KKKR. Um Excel KKKR. Um Excel KKKR. Um I asked him I asked him I asked him like what's what's like something I like what's what's like something I like what's what's like something I should do like what do you think should do like what do you think should do like what do you think something you do that like really helps something you do that like really helps something you do that like really helps the firm? He's like interview everybody the firm? He's like interview everybody the firm? He's like interview everybody once a year. So we sit down we start once a year. So we sit down we start once a year. So we sit down we start with like a survey and then you need and with like a survey and then you need and with like a survey and then you need and then you sit down with every employee. then you sit down with every employee. then you sit down with every employee. >> You personally do. I personally do sit >> You personally do. I personally do sit >> You personally do. I personally do sit down with every other partner, every VP, down with every other partner, every VP, down with every other partner, every VP, every associate, the accounting person every associate, the accounting person every associate, the accounting person on the back end, every receptionist, and on the back end, every receptionist, and on the back end, every receptionist, and be like, "What do you like about your be like, "What do you like about your be like, "What do you like about your job?" And so first, give me everything job?" And so first, give me everything job?" And so first, give me everything you do. Green, red, yellow, green you you do. Green, red, yellow, green you you do. Green, red, yellow, green you love, red you hate. And by the way, love, red you hate. And by the way, love, red you hate. And by the way, let's figure out what you hate and why. let's figure out what you hate and why. let's figure out what you hate and why. And if there's things you hate, well, And if there's things you hate, well, And if there's things you hate, well, then let's figure out other people that then let's figure out other people that then let's figure out other people that may be able to do them or how can we may be able to do them or how can we may be able to do them or how can we make your job easier. Okay, that's the make your job easier. Okay, that's the make your job easier. Okay, that's the first bucket. Second bucket, if you were first bucket. Second bucket, if you were first bucket. Second bucket, if you were me running lead edge, what would you me running lead edge, what would you me running lead edge, what would you change? change? change? Three, what's something we can do to Three, what's something we can do to Three, what's something we can do to make your job easier? make your job easier? make your job easier? What you learn is incredible. You get a What you learn is incredible. You get a What you learn is incredible. You get a bunch of really good ideas every year. bunch of really good ideas every year. bunch of really good ideas every year. It actually drives my two partners nuts It actually drives my two partners nuts It actually drives my two partners nuts because sometimes I'm like, "That's because sometimes I'm like, "That's because sometimes I'm like, "That's amazing. Do it." And then like they're amazing. Do it." And then like they're amazing. Do it." And then like they're like, "Come on, we need to have build like, "Come on, we need to have build like, "Come on, we need to have build consensus." I'm like, "No, we don't need consensus." I'm like, "No, we don't need consensus." I'm like, "No, we don't need to build consensus on some of these to build consensus on some of these to build consensus on some of these things." things." things." >> Is there anything else that you do in >> Is there anything else that you do in >> Is there anything else that you do in the culture that you feel carries that the culture that you feel carries that the culture that you feel carries that much freight? being like the good person much freight? being like the good person much freight? being like the good person is like just not that hard frankly. And is like just not that hard frankly. And is like just not that hard frankly. And in a world that's insanely competitive, in a world that's insanely competitive, in a world that's insanely competitive, if like being the nice guy gets you the if like being the nice guy gets you the if like being the nice guy gets you the call back and being like the helpful call back and being like the helpful call back and being like the helpful person, um then then do it all day long. person, um then then do it all day long. person, um then then do it all day long. And then it's another really important And then it's another really important And then it's another really important thing about running this place is that thing about running this place is that thing about running this place is that like I can't be the bottle. I can't know like I can't be the bottle. I can't know like I can't be the bottle. I can't know every LP. And so like if you're a 25 every LP. And so like if you're a 25 every LP. And so like if you're a 25 year old or 23 year old associate here year old or 23 year old associate here year old or 23 year old associate here and you have to go to Seattle next and you have to go to Seattle next and you have to go to Seattle next weekend for a wedding, then I'll pay weekend for a wedding, then I'll pay weekend for a wedding, then I'll pay your trip if you stay on Monday and go your trip if you stay on Monday and go your trip if you stay on Monday and go meet a bunch of LPs. By the way, you're meet a bunch of LPs. By the way, you're meet a bunch of LPs. By the way, you're 23 years old. Like 99% of firms on this 23 years old. Like 99% of firms on this 23 years old. Like 99% of firms on this planet wouldn't put 23-y olds in front planet wouldn't put 23-y olds in front planet wouldn't put 23-y olds in front of LPs. I'm like, if you're smart enough of LPs. I'm like, if you're smart enough of LPs. I'm like, if you're smart enough to work here, you're smart enough to to work here, you're smart enough to to work here, you're smart enough to meet this LP. Like, I don't care. And meet this LP. Like, I don't care. And meet this LP. Like, I don't care. And people love that. The 23-year-old people love that. The 23-year-old people love that. The 23-year-old associates love it, which helps us get associates love it, which helps us get associates love it, which helps us get great people, but then also the LP loves great people, but then also the LP loves great people, but then also the LP loves it, too, because then they'll be like, it, too, because then they'll be like, it, too, because then they'll be like, "Oh, my son is your age. Like, would you "Oh, my son is your age. Like, would you "Oh, my son is your age. Like, would you would you would you mind like talking to would you would you mind like talking to would you would you mind like talking to him?" Or, "Hey, you went to Notre Dame? him?" Or, "Hey, you went to Notre Dame? him?" Or, "Hey, you went to Notre Dame? Oh, my son's like plays lacrosse and is Oh, my son's like plays lacrosse and is Oh, my son's like plays lacrosse and is like thinking of going there. Would you like thinking of going there. Would you like thinking of going there. Would you talk to him?" And be like, "Oh, well, talk to him?" And be like, "Oh, well, talk to him?" And be like, "Oh, well, actually, no, talk to my partner Tim." actually, no, talk to my partner Tim." actually, no, talk to my partner Tim." Because he like played Notre Dame Because he like played Notre Dame Because he like played Notre Dame lacrosse. You just build really real lacrosse. You just build really real lacrosse. You just build really real relationships with people. relationships with people. relationships with people. >> If you think about the average month for >> If you think about the average month for >> If you think about the average month for you and the major slices of the pie are you and the major slices of the pie are you and the major slices of the pie are time with LPs, time with companies. I'm time with LPs, time with companies. I'm time with LPs, time with companies. I'm so curious. It's actually kind of hard so curious. It's actually kind of hard so curious. It's actually kind of hard to guess what maybe there's different to guess what maybe there's different to guess what maybe there's different buckets than those three LPS companies. buckets than those three LPS companies. buckets than those three LPS companies. >> Internals internal. >> Internals internal. >> Internals internal. >> That's right. >> That's right. >> That's right. >> What What does yours look like? >> What What does yours look like? >> What What does yours look like? >> Um and mine's by the way very different >> Um and mine's by the way very different >> Um and mine's by the way very different than Brian and Es. And this is by design than Brian and Es. And this is by design than Brian and Es. And this is by design and it I mean it es and flows a little and it I mean it es and flows a little and it I mean it es and flows a little bit with fundraising obviously. bit with fundraising obviously. bit with fundraising obviously. >> I probably spend >> I probably spend >> I probably spend 60% of my time with LPS. 60% of my time with LPS. 60% of my time with LPS. >> Wow. Now again that could be getting >> Wow. Now again that could be getting >> Wow. Now again that could be getting somebody to help a company though too or somebody to help a company though too or somebody to help a company though too or coordinating with the team um of people coordinating with the team um of people coordinating with the team um of people with us like hey let's figure out a way with us like hey let's figure out a way with us like hey let's figure out a way to get into Exxon and then I would say a to get into Exxon and then I would say a to get into Exxon and then I would say a third of my 25 30% of my time is third of my 25 30% of my time is third of my 25 30% of my time is investing related which could be reading investing related which could be reading investing related which could be reading memos helping people win deals that's memos helping people win deals that's memos helping people win deals that's frankly how I want to help like if we frankly how I want to help like if we frankly how I want to help like if we lose a deal because I didn't meet the lose a deal because I didn't meet the lose a deal because I didn't meet the company like I'm not saying I can help company like I'm not saying I can help company like I'm not saying I can help us win but like we got to at least put us win but like we got to at least put us win but like we got to at least put our best foot forward and then probably our best foot forward and then probably our best foot forward and then probably 15 20% is operational 15 20% is operational 15 20% is operational the operation stuff's come down um the operation stuff's come down um the operation stuff's come down um because because because uh we hired one of our partners Susie uh we hired one of our partners Susie uh we hired one of our partners Susie who lives in Greenwich um used to be an who lives in Greenwich um used to be an who lives in Greenwich um used to be an investment partner a few years ago she investment partner a few years ago she investment partner a few years ago she became our COO so that's like my time became our COO so that's like my time became our COO so that's like my time neay probably spends 90% of his time neay probably spends 90% of his time neay probably spends 90% of his time investing 10% of his time on everything investing 10% of his time on everything investing 10% of his time on everything else which is what he should do uh and else which is what he should do uh and else which is what he should do uh and kind of like running the IC partner kind of like running the IC partner kind of like running the IC partner Brian probably spends 60% of his time Brian probably spends 60% of his time Brian probably spends 60% of his time investing and probably 2020 on LPs and operations and it's if 2020 on LPs and operations and it's if like each the three of us if you were to like each the three of us if you were to like each the three of us if you were to meet the three of us it would be very meet the three of us it would be very meet the three of us it would be very it's very clear to people that spend it's very clear to people that spend it's very clear to people that spend time with Brian Eman and I that we like time with Brian Eman and I that we like time with Brian Eman and I that we like play to our strengths and weaknesses. play to our strengths and weaknesses. play to our strengths and weaknesses. >> You mentioned Tom Barnes as someone that >> You mentioned Tom Barnes as someone that >> You mentioned Tom Barnes as someone that you've learned from. you've learned from. you've learned from. >> Yeah. >> Yeah. >> Yeah. >> If you had to like create a Rushmore of >> If you had to like create a Rushmore of >> If you had to like create a Rushmore of like other investment machines that you like other investment machines that you like other investment machines that you most respect, who is the Rushmore? most respect, who is the Rushmore? most respect, who is the Rushmore? >> Insight TA and probably Excel Kat. I >> Insight TA and probably Excel Kat. I >> Insight TA and probably Excel Kat. I think Devin, Jeff, Triplet, the guys, think Devin, Jeff, Triplet, the guys, think Devin, Jeff, Triplet, the guys, uh, Liberman at Insight have just built uh, Liberman at Insight have just built uh, Liberman at Insight have just built like a factory. It's like it's, you like a factory. It's like it's, you like a factory. It's like it's, you know, how you know what a good software know, how you know what a good software know, how you know what a good software company is, it's talked to like they company is, it's talked to like they company is, it's talked to like they probably talk to 30,000 companies a probably talk to 30,000 companies a probably talk to 30,000 companies a year. It's it's like an absolute factory year. It's it's like an absolute factory year. It's it's like an absolute factory and you're trying to like it's process and you're trying to like it's process and you're trying to like it's process and so I think they're like amazing at and so I think they're like amazing at and so I think they're like amazing at it. Um, TA is the one that like it. Um, TA is the one that like it. Um, TA is the one that like pioneered cold calling. um in you know pioneered cold calling. um in you know pioneered cold calling. um in you know insights obviously stayed true to itself insights obviously stayed true to itself insights obviously stayed true to itself like you know in 2001 they they're I like you know in 2001 they they're I like you know in 2001 they they're I would guess Insight's growth rate in would guess Insight's growth rate in would guess Insight's growth rate in their portfolio between 2001 and like their portfolio between 2001 and like their portfolio between 2001 and like today is actually pretty similar. TAS today is actually pretty similar. TAS today is actually pretty similar. TAS has definitely come down. Uh they're has definitely come down. Uh they're has definitely come down. Uh they're more private equity like it's just more private equity like it's just more private equity like it's just discipline and process like I I think I discipline and process like I I think I discipline and process like I I think I get the sense that TA is very good at get the sense that TA is very good at get the sense that TA is very good at selling too. Um, and then Excel Exc has selling too. Um, and then Excel Exc has selling too. Um, and then Excel Exc has built like an incredible value creation built like an incredible value creation built like an incredible value creation team that I think actually adds a lot of team that I think actually adds a lot of team that I think actually adds a lot of I think there's a lot of people that I think there's a lot of people that I think there's a lot of people that talk about value creation. They don't do talk about value creation. They don't do talk about value creation. They don't do much, but I get the sense that these much, but I get the sense that these much, but I get the sense that these guys are um just like very good at um guys are um just like very good at um guys are um just like very good at um actually helping companies and trying to actually helping companies and trying to actually helping companies and trying to bend the needle. bend the needle. bend the needle. >> As your business scales up, everything >> As your business scales up, everything >> As your business scales up, everything gets more complex, especially your gets more complex, especially your gets more complex, especially your compliance and security needs. With so compliance and security needs. With so compliance and security needs. 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What have we missed about what makes the What have we missed about what makes the What have we missed about what makes the machine tick that you think is really machine tick that you think is really machine tick that you think is really important? important? important? >> I would have said that the three of us >> I would have said that the three of us >> I would have said that the three of us who run the machine are all very very who run the machine are all very very who run the machine are all very very different and we play to our strengths different and we play to our strengths different and we play to our strengths and I don't and I don't think that and I don't and I don't think that and I don't and I don't think that should be like underestimated. Um, and I should be like underestimated. Um, and I should be like underestimated. Um, and I think that's what makes the machine like think that's what makes the machine like think that's what makes the machine like we literally negotiate carry economics we literally negotiate carry economics we literally negotiate carry economics for the three of us in like 10 minutes. for the three of us in like 10 minutes. for the three of us in like 10 minutes. like we and like there's firms you hear like we and like there's firms you hear like we and like there's firms you hear about that like get into month-long about that like get into month-long about that like get into month-long fights like two-monthl long fights over fights like two-monthl long fights over fights like two-monthl long fights over Carrie. We all highly respect each other Carrie. We all highly respect each other Carrie. We all highly respect each other and like know what we're each really and like know what we're each really and like know what we're each really good at. Uh I think that's the I think good at. Uh I think that's the I think good at. Uh I think that's the I think that's honestly and like just a focus on that's honestly and like just a focus on that's honestly and like just a focus on intellectual honesty that I think a lot intellectual honesty that I think a lot intellectual honesty that I think a lot of firms just don't have. If you go to of firms just don't have. If you go to of firms just don't have. If you go to our investment comm some of our our investment comm some of our our investment comm some of our investment committee meetings especially investment committee meetings especially investment committee meetings especially out we our investment committee is the out we our investment committee is the out we our investment committee is the three of us but then we like everybody three of us but then we like everybody three of us but then we like everybody everybody that's basically VPN gets to everybody that's basically VPN gets to everybody that's basically VPN gets to come but if you sit in the room and and come but if you sit in the room and and come but if you sit in the room and and listen to Brian and Eay and I talk about listen to Brian and Eay and I talk about listen to Brian and Eay and I talk about a deal you would think the three of us a deal you would think the three of us a deal you would think the three of us hate each other or you might think we're hate each other or you might think we're hate each other or you might think we're Israeli um because they it was like just Israeli um because they it was like just Israeli um because they it was like just like a joke in Silicon Valley that if like a joke in Silicon Valley that if like a joke in Silicon Valley that if you listen to like Israeli board meeting you listen to like Israeli board meeting you listen to like Israeli board meeting from the outside you like these people from the outside you like these people from the outside you like these people hate each other like how do they work no hate each other like how do they work no hate each other like how do they work no that's that's just how they talk like uh that's that's just how they talk like uh that's that's just how they talk like uh and then like right after we have the IC and then like right after we have the IC and then like right after we have the IC we're the buddies and so it's like no we're the buddies and so it's like no we're the buddies and so it's like no it's like let's debate the merits of it's like let's debate the merits of it's like let's debate the merits of this deal. this deal. this deal. >> Maybe riff a little bit more on just all >> Maybe riff a little bit more on just all >> Maybe riff a little bit more on just all the ways that you're excited and fearful the ways that you're excited and fearful the ways that you're excited and fearful about AI both in the investment process about AI both in the investment process about AI both in the investment process at Lead Edge for running lead edge the at Lead Edge for running lead edge the at Lead Edge for running lead edge the business and for the companies that you business and for the companies that you business and for the companies that you invest in. invest in. invest in. >> Yeah, I'm the most fearful for what I >> Yeah, I'm the most fearful for what I >> Yeah, I'm the most fearful for what I don't know and just like AI is going to don't know and just like AI is going to don't know and just like AI is going to change the world and it's going to do it change the world and it's going to do it change the world and it's going to do it in ways that nobody can think about just in ways that nobody can think about just in ways that nobody can think about just like the internet did. I mean in 2009 like the internet did. I mean in 2009 like the internet did. I mean in 2009 999 2000 we got sat here we wouldn't 999 2000 we got sat here we wouldn't 999 2000 we got sat here we wouldn't have mentioned social media. I mean it's have mentioned social media. I mean it's have mentioned social media. I mean it's today it's $3 trillion of value. I'm the today it's $3 trillion of value. I'm the today it's $3 trillion of value. I'm the most like fearful whether it comes to most like fearful whether it comes to most like fearful whether it comes to companies companies companies and processes for that. It's like what and processes for that. It's like what and processes for that. It's like what don't we know like which is what are we don't we know like which is what are we don't we know like which is what are we missing? Um what am I the most excited missing? Um what am I the most excited missing? Um what am I the most excited about for us? Like AI in the long term about for us? Like AI in the long term about for us? Like AI in the long term will create the biggest productivity will create the biggest productivity will create the biggest productivity game of the last you know 7500 years. game of the last you know 7500 years. game of the last you know 7500 years. Don't know if it'll be like electricity Don't know if it'll be like electricity Don't know if it'll be like electricity but like it'll be pretty damn close. but like it'll be pretty damn close. but like it'll be pretty damn close. That's really exciting. like people and That's really exciting. like people and That's really exciting. like people and but like it's not going to be like like but like it's not going to be like like but like it's not going to be like like don't people get too excited about oh don't people get too excited about oh don't people get too excited about oh we're going to go like build the next we're going to go like build the next we're going to go like build the next piece of workday or we're going to go piece of workday or we're going to go piece of workday or we're going to go build like better call center software build like better call center software build like better call center software this stuff is going to like you're going this stuff is going to like you're going this stuff is going to like you're going to see industries that we're not even to see industries that we're not even to see industries that we're not even thinking about how to add even thinking thinking about how to add even thinking thinking about how to add even thinking about what's going to like be possible about what's going to like be possible about what's going to like be possible is going to happen that's like really is going to happen that's like really is going to happen that's like really exciting it's going to be the age of exciting it's going to be the age of exciting it's going to be the age of entrepreneurism and like people are entrepreneurism and like people are entrepreneurism and like people are going to be able to build awesome going to be able to build awesome going to be able to build awesome businesses what I worry about whether businesses what I worry about whether businesses what I worry about whether it's internally at lead edge or outside it's internally at lead edge or outside it's internally at lead edge or outside at our portfolio companies is do we have at our portfolio companies is do we have at our portfolio companies is do we have the right people in place so that we the right people in place so that we the right people in place so that we don't get disrupted and like cuz like don't get disrupted and like cuz like don't get disrupted and like cuz like look it's you constantly want you want look it's you constantly want you want look it's you constantly want you want to like I I joke you want to hire a to like I I joke you want to hire a to like I I joke you want to hire a bunch of young people and these young bunch of young people and these young bunch of young people and these young people but people worried about the people but people worried about the people but people worried about the young people aren't going be able to young people aren't going be able to young people aren't going be able to find jobs it's like the young people are find jobs it's like the young people are find jobs it's like the young people are the ones that's going to figure out AI the ones that's going to figure out AI the ones that's going to figure out AI more than the 60-year-old or 55-year-old more than the 60-year-old or 55-year-old more than the 60-year-old or 55-year-old and so it's do we we actually rank all and so it's do we we actually rank all and so it's do we we actually rank all we take all over our portfolio companies we take all over our portfolio companies we take all over our portfolio companies and we're saying like okay like what's and we're saying like okay like what's and we're saying like okay like what's your like AI readiness score and then your like AI readiness score and then your like AI readiness score and then it's okay this company's like really it's okay this company's like really it's okay this company's like really high this company's pretty low huh we high this company's pretty low huh we high this company's pretty low huh we should like connect those entrepreneurs should like connect those entrepreneurs should like connect those entrepreneurs together to figure out what they're together to figure out what they're together to figure out what they're doing. doing. doing. >> What goes into that score? >> What goes into that score? >> What goes into that score? >> What's your data look like? Is it >> What's your data look like? Is it >> What's your data look like? Is it structured in a way that you're going to structured in a way that you're going to structured in a way that you're going to be able to leverage AI? Um, are you be able to leverage AI? Um, are you be able to leverage AI? Um, are you iterating like how many new AI products iterating like how many new AI products iterating like how many new AI products have you come out with? What's your AI have you come out with? What's your AI have you come out with? What's your AI revenues on new products? You know, have revenues on new products? You know, have revenues on new products? You know, have how much more product releases are you how much more product releases are you how much more product releases are you able to release? It's not did your able to release? It's not did your able to release? It's not did your engineering come stay flat or go down. engineering come stay flat or go down. engineering come stay flat or go down. We actually I I for one strongly believe We actually I I for one strongly believe We actually I I for one strongly believe that if you think in 2020 if your budget that if you think in 2020 if your budget that if you think in 2020 if your budget in 2024 for 2026 was to have 150 in 2024 for 2026 was to have 150 in 2024 for 2026 was to have 150 software engineers, you should still software engineers, you should still software engineers, you should still have 150 software engineers because have 150 software engineers because have 150 software engineers because those software engineers can be like those software engineers can be like those software engineers can be like exponentially more productive and they exponentially more productive and they exponentially more productive and they can then create more products that your can then create more products that your can then create more products that your sales team can then go sell. sales team can then go sell. sales team can then go sell. >> Who do you compete with? >> Who do you compete with? >> Who do you compete with? >> We would bid against Insight, FTV, JMI, >> We would bid against Insight, FTV, JMI, >> We would bid against Insight, FTV, JMI, Battery, Bessemer's late when they do Battery, Bessemer's late when they do Battery, Bessemer's late when they do late when they do like bootstrapish type late when they do like bootstrapish type late when they do like bootstrapish type stuff. Um, okay. But sometimes we stuff. Um, okay. But sometimes we stuff. Um, okay. But sometimes we compete against mech and IVP and like compete against mech and IVP and like compete against mech and IVP and like but you like rocket ship companies in but you like rocket ship companies in but you like rocket ship companies in Silicon Valley are freaking awesome. Silicon Valley are freaking awesome. Silicon Valley are freaking awesome. Like I was not pay 100 times revenues Like I was not pay 100 times revenues Like I was not pay 100 times revenues for them. for them. for them. Uh, that's the that's the problem right Uh, that's the that's the problem right Uh, that's the that's the problem right now. There's like too much money. Matt now. There's like too much money. Matt now. There's like too much money. Matt Kohler said it best. It's like they back Kohler said it best. It's like they back Kohler said it best. It's like they back these giant internet companies when these giant internet companies when these giant internet companies when distribution was loose and capital was distribution was loose and capital was distribution was loose and capital was tight. It's like the reverse happened. tight. It's like the reverse happened. tight. It's like the reverse happened. So like capital's everywhere but like So like capital's everywhere but like So like capital's everywhere but like four companies control distribution. So four companies control distribution. So four companies control distribution. So like good luck going to build a giant like good luck going to build a giant like good luck going to build a giant internet company. Um and right now internet company. Um and right now internet company. Um and right now there's just like too much money chasing there's just like too much money chasing there's just like too much money chasing you know at least in Silicon Valley do you know at least in Silicon Valley do you know at least in Silicon Valley do few great things. So expand on that like few great things. So expand on that like few great things. So expand on that like like decompose and expand on that a like decompose and expand on that a like decompose and expand on that a little bit in so I guess the question is little bit in so I guess the question is little bit in so I guess the question is like your view on the state of markets like your view on the state of markets like your view on the state of markets and technology markets in general and technology markets in general and technology markets in general >> overhyped over frothd um >> overhyped over frothd um >> overhyped over frothd um and I believe this AI capex bubble will and I believe this AI capex bubble will and I believe this AI capex bubble will end badly end badly end badly uh in a way I just think people it's uh in a way I just think people it's uh in a way I just think people it's like the telecom bubble all over again like the telecom bubble all over again like the telecom bubble all over again and it will be it will be very and it will be it will be very and it will be it will be very interesting if Apple may have been maybe interesting if Apple may have been maybe interesting if Apple may have been maybe look like the really smart one in all look like the really smart one in all look like the really smart one in all this at the end of the day uh we've seen this at the end of the day uh we've seen this at the end of the day uh we've seen what they're I think people are just what they're I think people are just what they're I think people are just going overspend. I think I'm convinced going overspend. I think I'm convinced going overspend. I think I'm convinced that people invest in all these AI that people invest in all these AI that people invest in all these AI companies, all these VCs, like have to companies, all these VCs, like have to companies, all these VCs, like have to portray the view that software is dying, portray the view that software is dying, portray the view that software is dying, is going to be dead because they have to is going to be dead because they have to is going to be dead because they have to justify how much money they're going to justify how much money they're going to justify how much money they're going to spend. Like if you if you start to run spend. Like if you if you start to run spend. Like if you if you start to run these assumptions on like how much money these assumptions on like how much money these assumptions on like how much money is going into these companies and what is going into these companies and what is going into these companies and what that means for how much earnings you that means for how much earnings you that means for how much earnings you have to drive and what that means for have to drive and what that means for have to drive and what that means for like how much power you need to like how much power you need to like how much power you need to generate. Like it just doesn't where are generate. Like it just doesn't where are generate. Like it just doesn't where are the nuclear power plants coming up and the nuclear power plants coming up and the nuclear power plants coming up and it like just doesn't work. Um but that it like just doesn't work. Um but that it like just doesn't work. Um but that presents the opportunity. That's when presents the opportunity. That's when presents the opportunity. That's when you're going to buy it. That's when you're going to buy it. That's when you're going to buy it. That's when you're going to buy these companies. The you're going to buy these companies. The you're going to buy these companies. The counterargument would be in telecom, you counterargument would be in telecom, you counterargument would be in telecom, you know, it was all dark fiber. In AI, it's know, it was all dark fiber. In AI, it's know, it was all dark fiber. In AI, it's all burning GPUs. And yes, the capex is all burning GPUs. And yes, the capex is all burning GPUs. And yes, the capex is crazy, but we it's still we everything crazy, but we it's still we everything crazy, but we it's still we everything still feels mega under supplied. And I'm still feels mega under supplied. And I'm still feels mega under supplied. And I'm just curious how you think about Yeah. just curious how you think about Yeah. just curious how you think about Yeah. when the opportunities will present when the opportunities will present when the opportunities will present itself for an investor. I think um look itself for an investor. I think um look itself for an investor. I think um look our fundament my fundamental belief is our fundament my fundamental belief is our fundament my fundamental belief is that the models will commoditize that the models will commoditize that the models will commoditize and that companies like Google have a and that companies like Google have a and that companies like Google have a and Facebook and Amazon and Apple have a and Facebook and Amazon and Apple have a and Facebook and Amazon and Apple have a competitive cost advantage. Amazon competitive cost advantage. Amazon competitive cost advantage. Amazon companies like Amazon and Microsoft and companies like Amazon and Microsoft and companies like Amazon and Microsoft and Google have more data to train a model Google have more data to train a model Google have more data to train a model than than these new model companies will than than these new model companies will than than these new model companies will ever have. If and then oh by the way uh ever have. If and then oh by the way uh ever have. If and then oh by the way uh if you are all these like Chinese models if you are all these like Chinese models if you are all these like Chinese models or European models a bunch of these or European models a bunch of these or European models a bunch of these things cost a fraction of the cost to things cost a fraction of the cost to things cost a fraction of the cost to run and so like and you can run them run and so like and you can run them run and so like and you can run them locally and especially if your countries locally and especially if your countries locally and especially if your countries company's outside the US like why would company's outside the US like why would company's outside the US like why would you pay that amount for open AI tokens you pay that amount for open AI tokens you pay that amount for open AI tokens or fantic tokens when you can just run or fantic tokens when you can just run or fantic tokens when you can just run deepseeek or one of these other 10 deepseeek or one of these other 10 deepseeek or one of these other 10 models and so like I think we worry the models and so like I think we worry the models and so like I think we worry the most about modelization. I have no clue most about modelization. I have no clue most about modelization. I have no clue when this will like stop. It will when this will like stop. It will when this will like stop. It will probably go longer than people think. In probably go longer than people think. In probably go longer than people think. In 99 and 2000, people also thought we were 99 and 2000, people also thought we were 99 and 2000, people also thought we were in a bubble. They also think people in a bubble. They also think people in a bubble. They also think people think we're in a bubble now and it will think we're in a bubble now and it will think we're in a bubble now and it will just like stop. Is it one of these just like stop. Is it one of these just like stop. Is it one of these monster IPOs happening that um you know, monster IPOs happening that um you know, monster IPOs happening that um you know, and then it just doesn't go like people and then it just doesn't go like people and then it just doesn't go like people think it does? You know, I think this think it does? You know, I think this think it does? You know, I think this anthropic round was kind of like an IPO. anthropic round was kind of like an IPO. anthropic round was kind of like an IPO. We're trying to hit doubles and triples. We're trying to hit doubles and triples. We're trying to hit doubles and triples. A lot of these companies we struggle A lot of these companies we struggle A lot of these companies we struggle with like they're either going to be 200 with like they're either going to be 200 with like they're either going to be 200 x's or 100 x's or zeros. Like it's just x's or 100 x's or zeros. Like it's just x's or 100 x's or zeros. Like it's just that that's a str that's a struggle for that that's a str that's a struggle for that that's a str that's a struggle for us. What kind of company in the AI like us. What kind of company in the AI like us. What kind of company in the AI like center of the heat map? I know you're center of the heat map? I know you're center of the heat map? I know you're probably not investing in any of them, probably not investing in any of them, probably not investing in any of them, but because of the multiples or but because of the multiples or but because of the multiples or whatever, what kinds of companies are whatever, what kinds of companies are whatever, what kinds of companies are the most interesting to you? I think the most interesting to you? I think the most interesting to you? I think it's like fascinating some of the stuff it's like fascinating some of the stuff it's like fascinating some of the stuff that's being done in infrastructure that's being done in infrastructure that's being done in infrastructure software like um and actually that like software like um and actually that like software like um and actually that like agents appear to consume more resources agents appear to consume more resources agents appear to consume more resources and actually people and so like the some and actually people and so like the some and actually people and so like the some of these consumptionbased models like of these consumptionbased models like of these consumptionbased models like the growth of companies like by dumb the growth of companies like by dumb the growth of companies like by dumb luck we were very early investors in luck we were very early investors in luck we were very early investors in click house u which a database company click house u which a database company click house u which a database company we were early investors in graphana labs we were early investors in graphana labs we were early investors in graphana labs infrastructure company that competes infrastructure company that competes infrastructure company that competes with like data do data do like 29 like with like data do data do like 29 like with like data do data do like 29 like high 20s 30% a year at scale um like high 20s 30% a year at scale um like high 20s 30% a year at scale um like it's those types of companies I think we it's those types of companies I think we it's those types of companies I think we find super interesting are I find them find super interesting are I find them find super interesting are I find them fascinating. It's I really struggle with fascinating. It's I really struggle with fascinating. It's I really struggle with the valuations but like the the growth the valuations but like the the growth the valuations but like the the growth rates are like we've never seen and with rates are like we've never seen and with rates are like we've never seen and with with very good economics. You see how with very good economics. You see how with very good economics. You see how much money a company like Click House much money a company like Click House much money a company like Click House has raised like what they've burned is has raised like what they've burned is has raised like what they've burned is like like like very little compared to what you might very little compared to what you might very little compared to what you might otherwise think. otherwise think. otherwise think. >> What do you think is the most surprising >> What do you think is the most surprising >> What do you think is the most surprising thing about you? like like you have a thing about you? like like you have a thing about you? like like you have a good sense of you from how you operate, good sense of you from how you operate, good sense of you from how you operate, persistence, enthusiasm, energy, uh persistence, enthusiasm, energy, uh persistence, enthusiasm, energy, uh process. process. process. >> What do you think if I spent 10 hours >> What do you think if I spent 10 hours >> What do you think if I spent 10 hours with you, I would be most surprised with you, I would be most surprised with you, I would be most surprised about? about? about? >> How like so probably how driven I am and >> How like so probably how driven I am and >> How like so probably how driven I am and how much I like truly love what I do and how much I like truly love what I do and how much I like truly love what I do and like I just put my like heart and soul like I just put my like heart and soul like I just put my like heart and soul into everything I do. Whether it's like into everything I do. Whether it's like into everything I do. Whether it's like racing cars, which I race cars racing cars, which I race cars racing cars, which I race cars competitively, I was a national ranked competitively, I was a national ranked competitively, I was a national ranked ski racer, or how I run the edge, like I ski racer, or how I run the edge, like I ski racer, or how I run the edge, like I probably sleep like 5 hours a night, probably sleep like 5 hours a night, probably sleep like 5 hours a night, four hours a night. It's cuz I love what four hours a night. It's cuz I love what four hours a night. It's cuz I love what I do. I absolutely like just I'm I do. I absolutely like just I'm I do. I absolutely like just I'm insanely competitive and and I think insanely competitive and and I think insanely competitive and and I think that if you spent 10 hours with me, that if you spent 10 hours with me, that if you spent 10 hours with me, you'd be like, "Oh my god, this guy is you'd be like, "Oh my god, this guy is you'd be like, "Oh my god, this guy is the most persistent competitive person the most persistent competitive person the most persistent competitive person we've ever I've ever met." we've ever I've ever met." we've ever I've ever met." >> Were you born that way? >> Were you born that way? >> Were you born that way? >> Yeah, I think I was born that way. >> Yeah, I think I was born that way. >> Yeah, I think I was born that way. >> Was it enhanced through formative early >> Was it enhanced through formative early >> Was it enhanced through formative early experience? experience? experience? >> Ski racing. Ski skiing growing up as a >> Ski racing. Ski skiing growing up as a >> Ski racing. Ski skiing growing up as a kid. Ski racing 100%. kid. Ski racing 100%. kid. Ski racing 100%. >> Can you make that tangible for us? Like >> Can you make that tangible for us? Like >> Can you make that tangible for us? Like what was it like? what was it like? what was it like? >> Process like do these things and you'll >> Process like do these things and you'll >> Process like do these things and you'll get better. do these things on video in get better. do these things on video in get better. do these things on video in a GS course and constantly analyze video a GS course and constantly analyze video a GS course and constantly analyze video and do these things the next run and and do these things the next run and and do these things the next run and change this and like you fell get up and change this and like you fell get up and change this and like you fell get up and go do it 10 more times. I grew up on a go do it 10 more times. I grew up on a go do it 10 more times. I grew up on a ski hill that was 500 feet. I mean ski hill that was 500 feet. I mean ski hill that was 500 feet. I mean Lindsay Vaughn, one of the best skiers Lindsay Vaughn, one of the best skiers Lindsay Vaughn, one of the best skiers in the world, she grew up skiing on 500 in the world, she grew up skiing on 500 in the world, she grew up skiing on 500 feet buck hill in Minnesota and doing feet buck hill in Minnesota and doing feet buck hill in Minnesota and doing laps like from 400 p.m. to 10 p.m. at laps like from 400 p.m. to 10 p.m. at laps like from 400 p.m. to 10 p.m. at night. Like just repetitive like night. Like just repetitive like night. Like just repetitive like Michaela Shiffron who's one of the best Michaela Shiffron who's one of the best Michaela Shiffron who's one of the best female skiers in the world like views it female skiers in the world like views it female skiers in the world like views it as her time on snow is like limited. So as her time on snow is like limited. So as her time on snow is like limited. So like when you get off the chairlift like like when you get off the chairlift like like when you get off the chairlift like constantly like everything is a drill constantly like everything is a drill constantly like everything is a drill like just constantly be trying to like just constantly be trying to like just constantly be trying to improve. I think that's at lead edge and improve. I think that's at lead edge and improve. I think that's at lead edge and and like what you would find in me. It's and like what you would find in me. It's and like what you would find in me. It's like constantly trying to improve. I like constantly trying to improve. I like constantly trying to improve. I what what would surprised me the most what what would surprised me the most what what would surprised me the most actually if you had to say like huh you actually if you had to say like huh you actually if you had to say like huh you started the firm 15 20 years ago like I started the firm 15 20 years ago like I started the firm 15 20 years ago like I think I've been able to recruit and think I've been able to recruit and think I've been able to recruit and maintain maintain maintain and motivate and build a really good and motivate and build a really good and motivate and build a really good team. I would very good to pick really team. I would very good to pick really team. I would very good to pick really good partners and that treat other good partners and that treat other good partners and that treat other people really well and that like you people really well and that like you people really well and that like you know feeds on itself. know feeds on itself. know feeds on itself. >> Is there anything else from skiing I'm >> Is there anything else from skiing I'm >> Is there anything else from skiing I'm not a skier that you find visceral and not a skier that you find visceral and not a skier that you find visceral and helpful as an analogy for how to do helpful as an analogy for how to do helpful as an analogy for how to do things elsewhere other than reps and things elsewhere other than reps and things elsewhere other than reps and practice? practice? practice? >> When I asked the guy Scott Booth who ran >> When I asked the guy Scott Booth who ran >> When I asked the guy Scott Booth who ran Eastern, I asked him why he hired me. Eastern, I asked him why he hired me. Eastern, I asked him why he hired me. He said to me, and this was early08, he He said to me, and this was early08, he He said to me, and this was early08, he said to me, because when things get said to me, because when things get said to me, because when things get scary, you're going to want to buy. And scary, you're going to want to buy. And scary, you're going to want to buy. And I didn't know what he meant because he's I didn't know what he meant because he's I didn't know what he meant because he's like, you go on the hill at 80 miles an like, you go on the hill at 80 miles an like, you go on the hill at 80 miles an hour. Like, this isn't scary. Like, this hour. Like, this isn't scary. Like, this hour. Like, this isn't scary. Like, this is like nothing. You're like, you can is like nothing. You're like, you can is like nothing. You're like, you can make a decision going down the hill at make a decision going down the hill at make a decision going down the hill at 80 mph and like what to do and what not 80 mph and like what to do and what not 80 mph and like what to do and what not to do and how not to fall and fall to do and how not to fall and fall to do and how not to fall and fall whatever. In the fall of the happened, I whatever. In the fall of the happened, I whatever. In the fall of the happened, I was like, this isn't scary. Let's buy was like, this isn't scary. Let's buy was like, this isn't scary. Let's buy and like it's eventually going to go up. and like it's eventually going to go up. and like it's eventually going to go up. ski racing ski racing ski racing helped me really understand like a very helped me really understand like a very helped me really understand like a very fine line in risk adjusted and like risk fine line in risk adjusted and like risk fine line in risk adjusted and like risk return behavior. I just think like being return behavior. I just think like being return behavior. I just think like being an athlete, whether you play basketball, an athlete, whether you play basketball, an athlete, whether you play basketball, whether you play hockey, whether you whether you play hockey, whether you whether you play hockey, whether you play golf, like I think athletes just play golf, like I think athletes just play golf, like I think athletes just have a work ethic and can un like if have a work ethic and can un like if have a work ethic and can un like if you're trying to find it in young people you're trying to find it in young people you're trying to find it in young people and like have a drive like there are and like have a drive like there are and like have a drive like there are athletes that have incredible athletes that have incredible athletes that have incredible athleticism athleticism athleticism but also have incredible work ethic like but also have incredible work ethic like but also have incredible work ethic like Michael Jordan. Those are the best of Michael Jordan. Those are the best of Michael Jordan. Those are the best of the best. the best. the best. Then you have people like Steve Kerr who Then you have people like Steve Kerr who Then you have people like Steve Kerr who are like not very good athletically but are like not very good athletically but are like not very good athletically but had a work ethic of Michael Jordan like had a work ethic of Michael Jordan like had a work ethic of Michael Jordan like they could be good but then you have they could be good but then you have they could be good but then you have wasted talent which is like Zan Rodman wasted talent which is like Zan Rodman wasted talent which is like Zan Rodman of the world where like they were of the world where like they were of the world where like they were amazing ath athletes but they like amazing ath athletes but they like amazing ath athletes but they like didn't have a drive and I think the same didn't have a drive and I think the same didn't have a drive and I think the same can apply to investing. Why did you can apply to investing. Why did you can apply to investing. Why did you choose to start the firm? Because you choose to start the firm? Because you choose to start the firm? Because you were quite young when you did it. And were quite young when you did it. And were quite young when you did it. And what how how could you translate that what how how could you translate that what how how could you translate that experience into advice for someone experience into advice for someone experience into advice for someone listening that is thinking about listening that is thinking about listening that is thinking about starting a fund to decide whether or not starting a fund to decide whether or not starting a fund to decide whether or not they should they should they should >> just go do it. If you want to be an >> just go do it. If you want to be an >> just go do it. If you want to be an entrepreneur, I I can't. My partner entrepreneur, I I can't. My partner entrepreneur, I I can't. My partner Brian is like, "The reason you started a Brian is like, "The reason you started a Brian is like, "The reason you started a firm is because nobody was going to like firm is because nobody was going to like firm is because nobody was going to like hire your ass." I've always wanted to be hire your ass." I've always wanted to be hire your ass." I've always wanted to be an entrepreneur and be like really an entrepreneur and be like really an entrepreneur and be like really really successful. It's always driven me really successful. It's always driven me really successful. It's always driven me and like I always wanted to be by like and like I always wanted to be by like and like I always wanted to be by like you know I just just was solely focused you know I just just was solely focused you know I just just was solely focused on it and you know like if you want to on it and you know like if you want to on it and you know like if you want to generate generational wealth or build generate generational wealth or build generate generational wealth or build something like you need to be an something like you need to be an something like you need to be an entrepreneur like yes if we build entrepreneur like yes if we build entrepreneur like yes if we build Blackstone everybody who's here will Blackstone everybody who's here will Blackstone everybody who's here will make an insane amount of money because make an insane amount of money because make an insane amount of money because it was 90 people. One of my partners it was 90 people. One of my partners it was 90 people. One of my partners Zach is very young I mean he's like 30 Zach is very young I mean he's like 30 Zach is very young I mean he's like 30 years old and he's a partner because he years old and he's a partner because he years old and he's a partner because he joined here and he took a bet when the joined here and he took a bet when the joined here and he took a bet when the firm was tiny. I just encourage people firm was tiny. I just encourage people firm was tiny. I just encourage people if you want to do it like your own way, if you want to do it like your own way, if you want to do it like your own way, there's no better time than now. What there's no better time than now. What there's no better time than now. What are you waiting for? Like I actually are you waiting for? Like I actually are you waiting for? Like I actually think it's easier to leave when you're think it's easier to leave when you're think it's easier to leave when you're 27, 25, 27, 25, 27, 25, 30, then when you're 45 and have three 30, then when you're 45 and have three 30, then when you're 45 and have three kids. I had I had nothing to lose if it kids. I had I had nothing to lose if it kids. I had I had nothing to lose if it failed. Like I was going to just go work failed. Like I was going to just go work failed. Like I was going to just go work eventually. I guess work eventually. I guess work eventually. I guess work >> once you made lots of money. Do you >> once you made lots of money. Do you >> once you made lots of money. Do you still care? still care? still care? >> 100%. >> 100%. >> 100%. >> Why? >> Why? >> Why? >> Keep score every day. >> Keep score every day. >> Keep score every day. >> Because of score. This is gorgeous >> Because of score. This is gorgeous >> Because of score. This is gorgeous because like I want to win like like you because like I want to win like like you because like I want to win like like you know some of like people like Ken know some of like people like Ken know some of like people like Ken Griffin and Steve Cohen are like mentors Griffin and Steve Cohen are like mentors Griffin and Steve Cohen are like mentors to LPs of ours like those those guys to LPs of ours like those those guys to LPs of ours like those those guys have built like it's incredible how hard have built like it's incredible how hard have built like it's incredible how hard those people work like now again maybe those people work like now again maybe those people work like now again maybe these are NF2 people but like or if you these are NF2 people but like or if you these are NF2 people but like or if you look at some of these like tech look at some of these like tech look at some of these like tech entrepreneurs that have like an Elon entrepreneurs that have like an Elon entrepreneurs that have like an Elon Musk or Alex Karp from Palanteer or Matt Musk or Alex Karp from Palanteer or Matt Musk or Alex Karp from Palanteer or Matt Prince from you know Cloudflare or like Prince from you know Cloudflare or like Prince from you know Cloudflare or like George Curts from Crowdstrike like these George Curts from Crowdstrike like these George Curts from Crowdstrike like these people are incredibly driven like people are incredibly driven like people are incredibly driven like hardworking people that like live and hardworking people that like live and hardworking people that like live and breathe what they do and so yeah I mean breathe what they do and so yeah I mean breathe what they do and so yeah I mean people keep people keep people keep But but I have like it's not work for But but I have like it's not work for But but I have like it's not work for me. This is fun. I travel constantly and me. This is fun. I travel constantly and me. This is fun. I travel constantly and like to meet companies, to meet LPs, to like to meet companies, to meet LPs, to like to meet companies, to meet LPs, to meet entrepreneurs, to like meet meet entrepreneurs, to like meet meet entrepreneurs, to like meet bankers, like people are like your bankers, like people are like your bankers, like people are like your schedule like tell people my schedule schedule like tell people my schedule schedule like tell people my schedule and they like cry. I'm like oh no that's and they like cry. I'm like oh no that's and they like cry. I'm like oh no that's it's not work. It's fun. it's not work. It's fun. it's not work. It's fun. >> It's pretty amazing what you've built. >> It's pretty amazing what you've built. >> It's pretty amazing what you've built. Uh very unique model. Incredibly fun how Uh very unique model. Incredibly fun how Uh very unique model. Incredibly fun how willing you are to just walk us through willing you are to just walk us through willing you are to just walk us through it all. I had so much fun doing this. it all. I had so much fun doing this. it all. I had so much fun doing this. When I do these interviews, I ask When I do these interviews, I ask When I do these interviews, I ask everyone the same closing question. everyone the same closing question. everyone the same closing question. What's the kindest thing that anyone's What's the kindest thing that anyone's What's the kindest thing that anyone's ever done for you? Pete Wilmont, ever done for you? Pete Wilmont, ever done for you? Pete Wilmont, he's passed away, was the former he's passed away, was the former he's passed away, was the former um CEO of FedEx and he was a Williams um CEO of FedEx and he was a Williams um CEO of FedEx and he was a Williams alum. I started a company in college and alum. I started a company in college and alum. I started a company in college and he was like the first person that ever he was like the first person that ever he was like the first person that ever believed me. I was like, 19 years old believed me. I was like, 19 years old believed me. I was like, 19 years old and he became an investor with us and and he became an investor with us and and he became an investor with us and the company completely failed and he the company completely failed and he the company completely failed and he probably when I was trying to get my probably when I was trying to get my probably when I was trying to get my first jobs and when he got my job at first jobs and when he got my job at first jobs and when he got my job at Bassimer, he was my reference and he Bassimer, he was my reference and he Bassimer, he was my reference and he basically told the person they were basically told the person they were basically told the person they were insane if they didn't hire me cuz I was insane if they didn't hire me cuz I was insane if they didn't hire me cuz I was the most persistent person he ever met. the most persistent person he ever met. the most persistent person he ever met. >> I learned so much today about building >> I learned so much today about building >> I learned so much today about building something unique. Thanks so much for something unique. Thanks so much for something unique. Thanks so much for >> Thanks so much for having me on. >> Most software companies try to maximize >> Most software companies try to maximize your time on their app to juice your time on their app to juice your time on their app to juice engagement. RAMP does the exact engagement. RAMP does the exact engagement. RAMP does the exact opposite. RAMP understands that no one opposite. RAMP understands that no one opposite. RAMP understands that no one wants to spend hours chasing receipts, wants to spend hours chasing receipts, wants to spend hours chasing receipts, reviewing expense reports, and checking reviewing expense reports, and checking reviewing expense reports, and checking for policy violations. So, they built for policy violations. So, they built for policy violations. 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