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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Green: Lead Edge bought ByteDance at 5x earnings
“Late last year we were buying ByteDance. We were paying five times earnings for it. It grows, like, 25, 30% a year.”
Mitchell Green: Lead Edge Capital is buying public software stocks like Procore, Workday, Appian
“We are buyers. We're buying software stocks right now. You know, a portion of our funds can be invested in public equities, so we're buying companies like Procore, Workday, Appian.”
Green: Lead Edge would take 0.7x returns to exit slow-growth SaaS
“Yes, we have a prep so we would get our one X, but if you told me today I could take a .7 X just to get out of it, I would happily cut you. I would happily do it.”
Green: Lead Edge Capital has had only one or two write-offs ever
“I think we've had, like, two 10 X's ever, or something like that, but we've only had, like, you know, One or two zeros ever.”
Mitchell Green: Secondary sales account for roughly a third of Lead Edge deals
“Probably a third of our deals have been secondary sales.”
Mitchell Green: Lead Edge Capital rejects companies with under 90% retention
“18 is good. Like, you want like 90%. Anything less than 18, we won't touch.”
Green: Lead Edge Was Wrong Refusing 10X Revenue Software Multiples
“And so, like, the hardest decision is, actually, the hardest decision was, did we, should we have in, like, nine, 2017 and 18, like, and 16, like, paid, like, when everybody, when we were paying five to seven times revenues for software companies, and Iconic c…”
Green: Lead Edge targets 1:1 revenue to cumulative burn ratio
“Are your revenues today greater than your historical cash burn? Cumulatively. Not raised. If you've raised 80, but only burned 20, and you have a forty million dollar revenue business, like that's a great business. But we're looking for like a one to one ratio…”
Green: Lead Edge Capital targets 97% gross LP dollar retention
“So like, we run our business trying to figure out how do we have 97%, how do we keep up 97% gross dollar retention, not net, gross, With LPs.”
Mitchell Green: Lead Edge Capital is rebuying Toast stock after selling
“We're big investors in Toast, which we've been buying back. We were early investors in it, and sold, and are rebuying.”
Mitchell Green: Lead Edge Capital bought ByteDance stock at a sub-$200B valuation
“When we were buying ByteDance stock, like, you know, we were buying it at prices, like, sub, you know, around two hundred billion dollars.”
Green: Lead Edge struggles with climate tech due to capital inefficiency
“Look, it's, we've always struggled with how to invest there because of how capital inefficient a lot of those businesses are.”
Green: Lead Edge speaks to 10,000 companies annually
“Look, we speak to 10,000 companies a year. We have a team of 20, 18 to 22 year olds. So that's right, 20 to 20, we haven't gone pre-college yet. So you're like 20, 22 to 24 year olds that are speaking to 10,000 companies a year.”
Green: Less than 10% of Lead Edge portfolio is Bay Area-based
“Less than 10% of our companies are in the Bay Area.”
Green: One-third of Lead Edge Capital's exits are private equity sales
“So now if you like look at all of our exits, a third of our exits have actually come from, Come to private equity in those companies.”
Green: Lead Edge shifted away from Silicon Valley and IPO reliance around 2018
“With really in like, 2018 or 19, we really started to shift our business away from Silicon Valley based companies and needing to say every company needed IPO.”
Lead Edge Capital models software exits between 4x and 8x revenue
“We tend to like, I think our bands that we tend to assume most exits at are like, Four to eight times revenues. Like, maybe sometimes 10 times at the absolute highest, if it's like growing 30, 40% a year.”
Green: Lead Edge passed on Snowflake at $500M valuation
“Snowflake. Like, massive. I mean, when we looked at Snowflake, it had, like, horrible gross margins. Like, but again, it was, we looked at it at five hundred million dollars, and, like, we were completely wrong.”
Green: Only a few VCs can repeatedly back generational giants
“I put on one hand the amount of people that are capable of backing companies like Google's and Facebook's of the world, and doing it more than once. Like, it's a really, really, really small group. It sure as heck isn't me.”
Green: Lead Edge recoups 90% of WorkHuman investment through dividends
“I mean, we bought it at like, The position at like five times earnings. And we've gotten 90% of our money back through dividends in the company.”
Green: Lead Edge Capital questioned its strategy during 2020-2021 market frenzy
“I think we questioned our existence in 20 and 21 as, like, we were just getting annihilated on prices.”
Lead Edge employs 18 young associates to cold call prospective investments
“So we have a team of 18 22 to 24 year olds, like pounding the phones, calling companies all day long,”
Green: Lead Edge has evaluated 70,000 startups over the past decade
“And this is after speaking to probably 70,000 companies over the last decade. It's about a 10% yield.”
Green: Lead Edge Capital is the first institutional investor in 70% of deals
“70% of the time, we're the first institutional investor.”
Green: Lead Edge's worst mistakes were overpaying and assuming high exit multiples
“Our stupidest mistakes were just, like, overpaying for a couple of companies. Assuming the exit multiple was going to be, like, higher than it actually is.”
Green: Lead Edge invested in Toast at 20x revenue, $500M valuation
“When we invested in I think it was in seven, no, 1615, 16 time-ish, 17 time frame. It was like 25 of revenue, growing 250% a year. Like, what would that, that would be a billion dollar plus exit, that would be a 1,000,000,001, billion and a half dollar multipl…”
Green: Lead Edge Capital passed on Chainalysis, Coinbase, and early Bitcoin
“We've looked at stuff around the like we looked at chain analysis years and years ago, probably should have done it. Like the picks and shovels type stuff. Look, should have done Coinbase, like, years and years ago. By the way, I should have bought Bitcoin, to…”