Mar 28, 2022 · 37m · 20vc
20VC: Lessons Scaling Insight Partners to a $20BN Latest Fund, The Two Biggest Learnings on Price, How to Manage and Train Young People in Venture, Why Business Classrooms Do Not Work and How to Assess the Two Commodities in Life; Money and Time with Jeff
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In this episode of 20VC, host Harry Stebbings interviews Jeff Lieberman, Managing Director at Insight Partners, discussing his 24-year journey scaling the firm to a $20 billion fund, key investment principles across market cycles, and strategies for empowering young venture talent.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 32.3% of the talking time here. How this is scored →
Harry as informed peer 2.8 Guest teaching 3.2 Guest disagreement 0.3 Harry pushing back 1.1
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 33:30 Jeff counters Sacca's self-promotional framing
Jeff explicitly rejects Harry's framing that VCs need to aggressively brag to win deals, arguing instead that founders face a lonely journey and require a listening co-pilot.
Hardest push from Harry ▶ 33:13 Harry brings up Chris Sacca to challenge Jeff's view on VC behaviorHarry refuses Jeff's ideal that VCs should talk less, pushing back by referencing Chris Sacca's approach of loud self-promotion to win in a commoditized capital market.
Biggest teaching moment ▶ 14:45 Jeff breaks down cash flow margin math vs revenue multiplesJeff educates Harry on fundamental valuation principles, demonstrating how identical revenue multiples conceal massive value gaps between high and low cash flow margin SaaS businesses.
Harry holds his own ▶ 21:34 Harry questions the reality of open partner calendars for junior analystsHarry demonstrates industry knowledge by challenging Jeff's claims, noting that associate friends consistently struggle to get partner calendar time in practice.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Working-Class Roots to Venture Capital Journey | 1 | 2 | 0 | 0 | Harry introduces Jeff and asks an open-ended narrative question about his journey into venture capital. Jeff shares his background, from working with his union electrician father to Wharton, McKinsey, and joining Insight. | |
| Personal Work Ethic, Scarcity Mindset, and Parenting | 2 | 2 | 0 | 0 | Harry asks a follow-up on how Jeff's parents influenced his mindset and how he approaches parenting his own children. Jeff details his early scarcity mindset and why he avoids pushing his kids into rigid paths. | |
| Lessons from Market Cycles: Booms and Busts | 2 | 4 | 0 | 0 | Harry asks for advice on navigating market cycles, acknowledging his own lack of experience with downturns. Jeff educates Harry on the structural differences between the 2001 dot-com crash, 2008 financial crisis, and current market valuations. | |
| Managing Investment Pace and Deployment Speed | 3 | 5 | 1 | 1 | Harry probes Jeff on deployment pace and current price sensitivity. Jeff breaks down fundamental valuation mechanics, explaining why revenue multiples are deceptive compared to long-term cash flow margins. | |
| Scaling Insight Partners and Investor Training Model | 2 | 4 | 0 | 0 | Harry inquires about the challenges of firm building and training junior talent. Jeff reframes traditional business education, arguing that classroom teaching does not work in VC compared to experiential volume. | |
| Culture of Trust, Empowering Analysts, and Trivago | 4 | 4 | 1 | 4 | Harry pushes back on Jeff's claims of analyst empowerment, questioning if partners actually let junior staff book their calendars. Jeff illustrates the policy with a real-world story of flying to Dusseldorf for Trivago based on an analyst email. | |
| Leadership Style Evolution and Managing People | 3 | 2 | 0 | 0 | Harry asks about Jeff's evolution as a leader and his biggest investment misses. Jeff shares how missing top-down macro shifts like social photo platforms reshaped his investment framework. | |
| The Role of Failure and Losing Money in VC Learning | 4 | 3 | 0 | 1 | Harry cites a quote about needing to lose money to truly learn in VC and references Doug Leone's abyss concept. Jeff admits he hates losing money but agrees that failure forces investors to re-examine core assumptions. | |
| Quick Fire Round: Books, Strengths, and VC Mindset | 4 | 3 | 1 | 4 | During the quickfire round, Jeff suggests VCs should talk less and serve more. Harry challenges this by citing Chris Sacca's view that VCs must boast and market aggressively to compete in a commoditized market. |
Statements from this episode (19)
Insight Partners raised a $20 billion fund in early 2022
“Their most recent fund, announced earlier this year, was a whopping twenty billion dollars”
Lieberman: Entrepreneurship is a process, not an epiphany
“I didn't realize, really because of my upbringing, that entrepreneurship was a process, not an epiphany, and it's something that I just never really had thought about or was exposed to.”
Lieberman: Investors must moderate perspectives during market booms and busts
“I think the biggest lesson is that you got to moderate your point of view on the ups, and you got to moderate your point of views on the down. It's probably never as bad as it looks, probably never as good as it looks.”
Lieberman: VC industry's 50% returns are ridiculous, unsustainable, and will mean revert
“50% returns I read this weekend across the industry. Like, as an industry, that's ridiculous. Massively unsustainable. We're not all that smart. We're not all that good, including myself. It's not possible. So there's clearly something going on, and there'll b…”
Jeff Lieberman: Insight Partners does not set deal or deployment targets
“Like, we don't have no targets. It's not like, oh, we need to do X number of deals or deploy X dollars of capital, or this is how much we're doing. That's an output, not something we manage to.”
Lieberman: A 50% margin SaaS company is 2.5x more valuable than 20%
“One SaaS company will have a 50% cash flow margin. The other will have a 20% cash flow margin. One is going to be theoretically in the long term, this is my Wharton education kicking in, two and a half times more valuable than the other.”
Lieberman: Valuation spreads between average and great assets compress during market booms
“In times like this, we typically average assets get priced way up. Great assets get priced up, but the spread between those assets probably compresses.”
Lieberman: Entry price does not matter long-term for truly great companies
“If you own the ones that are really good long-term, I don't think the price overly matters. Your returns will be worse if things correct, but they're still going to be good. And if things don't correct, your returns will be spectacular. But if you own the bad …”
Lieberman: Command-and-Control Venture Capital Firms Will Become Outdated
“In a world that's decentralized, in a world that's global, in a world that's innovating very quickly, you need to hire super, super smart, super energetic, super passionate, inquisitive people to go find really interesting stuff, and if it's command and contro…”
Lieberman: Business Classrooms Don't Work for Venture Capital Training
“I would argue in our business, and in most business, classrooms don't work. I mean, I took marketing classes. You know, most business classes aren't practical relative to what it is to be a VC.”
Lieberman: People are either long on money and short on time, or vice versa
“There's two commodities in life. You have money and you have time. And I had a wise entrepreneur a long time ago say, you can't have both. You have one. You're either long one and short the other or short one and long the other.”
Lieberman: Insight Partners analysts have full control over senior partners' calendars
“When an analyst joins Insight, they basically have full cart, blanche control of senior partners' calendars, and what I mean by that is if an analyst walks into my office and says, Jeff, I got this really cool company. I want you to talk to them tomorrow. I ta…”
Lieberman: Insight Partners sold Trivago to Expedia for $1 billion
“A hundred days later, we wire and invest in a company called Trivago. Four years later, we sell it to Expedia for a billion dollars.”
Jeff Lieberman: Managing people is harder than the analytical work in VC
“Managing people is definitely the hardest part of the job and the emotional side of it and understanding their needs. I mean, the analytical stuff is fun and easy, and you know, the numbers don't Yell back, but the people do, and like, putting yourself out the…”
Lieberman: Insight was Shutterstock's first investor at $5M revenue
“We were really early on photography, so I invested in a company called Shutterstock, which we took public. We were the first investors that, like, it was a five million dollar company at the time.”
Lieberman: Macro trends, not just fundamentals, drive 10x to 30x venture returns
“So kind of the company gets you to a base case, but the macros are what allows you to break out and really see tail. Because if you don't have those macros, it's kind of hard to break out and have, you know, a 10, 15, 20, 30 time your money kind of investment.”
Lieberman: Learning from failure is much easier than learning from success
“I think it's much, much easier to learn from failure than from success.”
Lieberman: Failed deals provided necessary conviction for subsequent profitable investments
“I invested in a lot of companies where I lost money, and ultimately, those companies led me to another investment where I made a lot of money, and if I didn't invest in the first company, I would have never had the courage and the conviction and learnings to i…”