Green: Preferred stock in capital-efficient software creates strong downside protection
Mitchell Green · Mitchell Green - Lead Edge of Harnessing Networks (EP.429) · Jan 27, 2025 · at 24:16
Mitchell Green, founder of Lead Edge Capital, explains his firm's investment heuristic prioritizing capital efficiency (historical revenue exceeding total cash burn).
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“If you build a business with 20 of revenue, you're growing 30. And you've only burned three million bucks. You're doing something right. And if we can get in there and own preferred stock at the top of the cap structure, and it's recurring and has 80% gross margin, the probability to lose all your money is really, really low.”
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