The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Suster: SoftBank, Tiger, Coatue, and Insight marked 60% of 2021-2022 unicorns
“Of the 1260% were marked by four firms, ok? SoftBank, Tiger, Coachu, and Insight.”
Ehrenberg: Andreessen Horowitz and Insight Partners Are Corporations, Not Venture Firms
“Yes, you're going to have more of the Andreessen's and the insights and these platforms that they're not really venture firms. They're Corporations that are multi-stage investment firms. That have some venture, that have some growth, that have some pre-IPO, an…”
Wiz's $30B Outcome Returned Only One-Third of Insight's Fund
“Wiz, which was obviously a, you know, 30, thirty one billion dollar outcome, you know, the GDP of the country. And it returned a third of Insight's fund.”
O'Driscoll: Jeff Horing won't be fired over $100M Builder.ai loss
“I think Jeff Hoering himself, the founder was involved, who's made scads of money. I think he was a big investor, an early investor in Wiz. I don't think Jeff is going to lose his job for dropping a hundred million dollars when he's returned a couple of billio…”
Stebbings: Builder.ai shut down after generating $45M vs $200M projected
“Builder.ai, which raised five hundred million, I think it was, across rounds, shuts down false projections. I read about they were projecting 200 and they actually got forty-five million in revenue.”
Parekh: Some startups raising at $1.5B on $4M ARR will succeed
“So I'm not going to sit here and tell you that every company that raises money at a one and a half billion dollar valuation of four million of ARR is going to work, but you're going to have a subset that are definitely going to work.”
Deven Parekh predicts venture-backed startups will significantly reduce employee option strike prices
“I think there's going to be a lot of those cases where companies with our support, you know, we're going to significantly reduce the valuation of the option and equity incentives going forward.”
Woody Marshall: Large venture firms face strict auditing on portfolio valuations
“If you're a firm as big as mine or as Devon's, there's a very sophisticated process that gets reviewed by auditors, which is a little different than, you know, with a lot of the early stage guys, so it's hard for us to play around with valuation”
Fabrice Grinda explains why $20 billion mega-funds cannot effectively write $10M checks
“If you're deploying twenty billion, You really don't get out of bed and write a ten million dollar a check very often because it just doesn't move the needle. Like there's no, you're not deploying enough capital. It's like a return of capital that you can make…”
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…”
Deven Parekh predicts rushed venture deal timelines will cause negative outcomes
“I think the bigger challenge today, to be honest with you, Harry, is less around price. It's more on how quickly decisions are having to get made, and I think that, I think, might have, you know, negative implications, not just for investors, but also for foun…”
Deven Parekh argues venture investments fail from missed growth, not overpaying
“We have a line that we use internally is that we never overpay. Companies miss their numbers. What it really is saying, if we're right on our growth underwriting, price is not really the problem, because it's amazing the power of compounding.”
Insight Partners invested in Checkout.com on a handshake without a term sheet
“I mean, you've got to be at checkout. I mean, we did that deal on a handshake. We never signed a term sheet.”
Jerry Murdock: 80% of my venture investments returned under 1.3x capital
“About 80% of the investments I've made have returned less than 1.3 X. So it's the 20% that made all the money in my life and made all the impact.”
Stebbings: Insight generated $2.6B Wiz return in $8.5B fund
“It was a 2.6 billion dollar reported return to them in an eight and a half billion dollar fund, which is like one of the best investments of all time.”
Parekh: Insight's biggest misses were passing on high-valuation winners
“And I think that where we've generally had misses They've been more because we said no on valuation and the company actually executed incredibly well at a very, very large market.”
Deven Parekh: Insight underwrote 2020-2021 growth deals assuming 50% multiple contraction
“When we did deals in 20, 21... Revenue growth driven deals, right? As opposed to buyouts or even more EBITDA driven, we do both. We were assuming on average, 50% multiple contraction.”
Deven Parekh: SaaS revenue growth correlation to valuation dropped from 72% to mid-30s
“If you go back to 2020, the correlation to revenue multiple in the public markets was something like 72% was correlated to revenue growth. Today, it's in the mid-thirties.”
Deven Parekh: Insight Partners has substantially marked down many 2021 investments
“The ones that we made in 21, a lot of them are marked down substantially.”
Deven Parekh: Insight deployed almost zero Fund XII capital to AI in 2023
“We have been active in AI, but ironically, if you look at fund 12 or most recent fund, like I think about seven or eight percent of it is invested in AI companies. Ironically, almost zero of it was invested in 2023. Almost all of it was invested in 2021. In mo…”
Grinda: Insight Partners Will Not Disrupt Series A and B Venture Markets
“I don't think they're going to screw up the A and B market and asset class because they're going to play. It's not going to be the bread and butter.”
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: 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…”
Insight Partners' successive funds have seen higher median portfolio growth rates
“If you look at our kind of median growth rate in our funds, you know, fund five, fund six, fund seven, fund eight, as you get to each successive fund, the median growth rate is higher, and that's with bigger funds.”
Insight Partners' biggest misses came from passing on high valuations
“When we do our analysis of the deals that worked and the deals that didn't work, we often find is when we did something that we thought was cheap, those didn't work particularly well either. And I think that where we've generally had misses, they've been more …”
Deven Parekh argues insider signaling risk no longer prevents follow-on rounds
“I mean, the market has shown that the signaling risk is not that significant of a risk. That is entirely possible for us to invest in something earlier, for us to not pursue the next round, and for the companies still have to be able to raise capital.”
Insight Partners incorrectly predicted severe underperformance and halted deployment during COVID
“Where we all met with our LPs. We said, you know, we're probably not going to deploy any capital. Valuations are going to go down dramatically. Get ready for probably our worst performance in a really long time. And of course, none of that came true.”
Insight Partners acquires 70-80% of unprofitable venture companies using zero leverage
“We also do control deals where we're buying control of companies that you would define as a venture company, where a set of existing investors For whatever set of reasons, wants to get liquidity. And we're excited about the growth profile of the company. They …”
Deven Parekh argues return-optimizing VCs should focus time on middle-tier companies
“If you said, I'm a robot, and I'm going to allocate my time in a way that totally optimizes fund returns. Actually, you spend almost no time with the winners. The market's great. The management's great. You're a cheerleader. You're not adding as much value as …”
Jerry Murdock: Twitter had 30 employees and zero revenue when Insight invested
“When I invested in Twitter in 2009 there was 30 something people, no revenue.”
O'Driscoll: Insight's $100M loss on Builder.ai is 1% of its fund
“From insights perspective, a hundred million dollars in a, I think the last one is twelve billion. It's approximately one percent of the fund.”
Parekh: Insight Partners' data shows cheap investments rarely perform well
“When we do our analysis of the deals that worked and the deals that didn't work, we often find is when we did something that we thought was cheap, those didn't work particularly well either.”
Hoffman: Insight Partners deploys a 20-person team to evaluate deals
“If you think of like an insight which is one of the more successful late stage. Like they have like a 20 person team evaluate a deal. They don't just have like one person do the whole thing.”
Deven Parekh: Multiple Insight portfolio companies hold $300M to $500M in cash
“We have multiple companies in our portfolio that have between three and five hundred million dollars of cash on their balance sheet.”
Deven Parekh: Startups at $50M ARR growing 80% have a 75% IPO failure rate
“But the odds are that you're not going public. Like the 75% probability is you're not going public.”
Deven Parekh: Insight Partners had 180 companies growing over 50% in Q2 2023
“Insight has a hundred, had a 180 portfolio companies that grew north of 50% in, you know, Q two of 20, 23 over Q two of 2022”
Lieberman: Hot markets compress price spreads between great and average assets
“I think 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: 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: 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.”
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 Partners culture avoids celebrating wins or dwelling on losses
“This is not a culture where we celebrate victories. We don't wallow in the loss either, but we're not sitting here celebrating the victories, and it's all about how do we get up and do it again?”
Deven Parekh recommends splitting CFO financial reviews from board strategy discussions
“The board meetings I enjoy the most, where I have enough influence to be able to do this, I've broken up the board meeting into two separate board meetings. So one's a Financial overview of performance where the CFO just presents the financial performance. Peo…”
Deven Parekh requires junior team members to speak first in diligence meetings
“And my approach on those is always to start with the most junior person and go to the most senior person, as opposed to start with the most senior person and go the other way. I mean, I have the most junior person Speak first. Now, they don't like to be the fi…”
Insight Partners focuses more on missed deals than successful investments
“We spend way more of our time beating ourselves up on the things that we missed, and why didn't we look at that area, or are we not being aggressive enough in that area, or why didn't we do that deal when we saw it? So I think the first thing is you constantly…”
Insight Partners operates without minimum ownership targets for its investments
“We don't have, like, a minimum threshold. We don't have a minimum percentage we have to own. You know, we have companies where we own as little as three, four percent, and we have companies where we own north of 90%.”
Deven Parekh argues early-stage diligence requires more time than late-stage
“And I think in some ways at an earlier stage, it's even more important to spend that time because you're really betting on the person. You're not betting on a Set of financial metrics, which we can do in a later stage company.”
Deven Parekh notes famous VCs share insecurities about sourcing top deals
“I've talked, I won't name people, but I've talked to people at other Funds who are really well-known names, I mean, way better known names than me, who have the same concern about, can they keep up? Can they continue to find great deals?”