The Ledger, every show

“So we want to run funds with about 20 investments. We think there's too many funds that become index funds, and they just have 50, a 102 hundred investments in them. We think that's crazy.”

“I would rate most funds information disclosure as awful. Not bad. Awful.”

“Now, when we find the company, we're then super creative. We'll buy 10%, 80%, LPs out of a twenty-year-old fund, buy employee, secondary, you know, fund somebody's CV. We don't care. We'll do anything.”

“We do not run funds with like a hundred, 115 companies in them, we have, we run funds with like 20 investments in them”

“50, 60% of our companies are, like, profitable businesses.”

“In toast, which is one of our biggest investments, which we put like 12% of our fund three into. And we'd always get crap. Our fund three was like a two hundred ninety million dollar fund. And then we put like thirty six million bucks into it. And before the I…”

“We sold like in the secondary markets like 40 or 50 bucks in toast. The stock today is like 30 bucks.”

“Toast was twenty five million of revenue growing a 150% a year. And it was like, we paid like 500 bucks. It was like 20 times revenue.”

“When we invest in a business, and when we exit, it's something like 75% of the time, the person who was running the business when we invest is still involved in the company.”

“They probably talk to, like, they probably talk to 30,000 companies a year.”

“TAs has definitely come down. They're more private equity-like.”

“Buying is glamorous. Selling is the job.”

“We're big investors in Toast, which we've been buying back. We were early investors in it, and sold, and are rebuying.”

“I believe in any time you have big technological transformations, that you want the entrepreneur, you want the management team that is run by the company That, that is focused on growth.”

“If you look today at the 10 largest e-commerce companies in the United States, You know, six or seven out of 10 of them are traditional retailers.”

“And, you know, like Apple's spending very little right now, you know, and those other three or four companies are spending insane amounts of money.”

“So if you were to look at your average software company that goes public, You know, if you look at cumulative spend since inception, it's usually around, like, 30% is R&D. So like, a huge amount of these businesses are about, like, sales and marketing, distrib…”

“I actually think the biggest disruption you're gonna see is in, like, manufacturing, is in, like, healthcare, is in you know, think about, like, the companies that can figure out how to get drugs to market much faster than anybody else. Like, I think AI could …”

“Most big companies that are, like, financially regulated, you can't even go on to Claude or ChatGPT. Like, you can't even, like, get on the system to do work.”

“The companies that, the found, that, where the, like, founders are buying, or the companies are buying huge amounts of stock back, like, that, that to us would make one more bullish on that company versus, like, another company, a hundred percent.”

“I would suspect over the next, you will, as our names come through, you know, you will see more things like sales, like Salesforce, people put in place big buyback programs to start buying back stock here. I think you'll see it.”

“When we were buying ByteDance stock, like, you know, we were buying it at prices, like, sub, you know, around two hundred billion dollars.”

“We, in the US, we are gonna run into major issues around power.”

“Look, it's, we've always struggled with how to invest there because of how capital inefficient a lot of those businesses are.”

“Good investment and good company are two very fundamentally different things too. And you're trying to like get the union of both of them.”

“LPs want money back, and the people that stay in, they're gonna be in business 1015, 20 years from now, are people that will continue to give money back to their investors.”

“So I actually think that's the best way that VCs and private active people can help founders and entrepreneurs is connect them with people who have done it before and help them recruit.”

“The company that's got 95 gross dollar attention can grow really fast and not burn much money. Because they're not spending money on sales marketing to fill up the bucket.”

“If I was them, like, I know that all these companies, they drive EBITDA margins from five percent to 40%.”

“By the way, you know how many more public companies there would be right now if these companies didn't have six hundred million dollars of cash in the balance sheet or a billion dollars of cash. If they only had thirty million, they'd all be public companies.”

“Private equity funds don't have enough money to write like, forty billion dollar checks in the companies.”

“We also got two million dollars in the Shopify IPO, because we knew the founders. And that would have returned our second fund, like, two X, had we just not sold stock. Like, didn't have to do anything.”

“And all that Insight was doing was replicating what Summit and TA did, which was hire 22 to 24 year old knuckleheads, which my now partner Brian and I were, and pound the phones calling companies all day long.”

“And you know how you know what a good company is over two years, talk to 10,000 bad companies.”

“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.”

“Less than 10% of our companies are in the Bay Area.”

“Let's go find stuff that we can just build, like, you know, invest when they're 10 to twenty million dollar revenue software businesses, and exit them when they're 60 to eighty million dollar software businesses.”

“And now it's not a hundred percent, but 50, 60% of these bid market private equity firms also buy software companies. Like they have a sleeve to do software.”

“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.”

“I do think like a company like Zoom went public because there, you know, it's a very profitable business growing fast. They went public because private, public companies they compete with were constantly like, well, Zoom, it's a tiny business. Like, why do you…”

“It's actually shocking that like, that the number of venture funds over the last like five or seven years has actually increased given that the exits are getting longer, not shorter.”

“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.”

“If you have 70, 75, 80% gross retention, it's much harder. But if you have a 90, 95% gross dollar retention business, yeah, like, make the hard decisions. You know, and get the thing to profitable.”

“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.”

“Alibaba was very cash efficient, actually, when we invested, it was a billion dollars of profit.”

“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.”

“By the way, without good performance, you can have none of it, but I can tell you that people, here's the thing though, people want the nice guy, the good guy, the person who communicates to win. So like, if you have a bad vintage or two bad vintage funds, the…”

“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.”