Opinion
Mitchell Green: Assuming 20x-25x exit multiples for AI deals is insanity
“I think how they're going to get in trouble today and all this AI stuff is they just assume the exit multiple is 20 to 25 times. That's insanity.”
Opinion
Mitchell Green: Investing in OpenAI at a $100B valuation is 'a little insane'
“And I think investing in open AI, a hundred billion is a little insane personally, but like, I don't know if it goes on to do like a trillion dollars of earnings. Yeah. I was going to be very wrong. I should have invested.”
Opinion
Mitchell Green: Overlevered PE-Owned Software Assets Are Ripe for Disruption
“I worry that a bunch of these private equity owned assets that are over levered are ripe for disruption versus like independent software companies that are focused on growth, that are trying to innovate.”
Prediction Not checkable as stated
Mitchell Green: The AI CapEx bubble will end badly
“Overhyped, overfrothed and I believe this AI CapEx bubble will end badly.”
Prediction Not checkable as stated
Mitchell Green predicts AI foundation models will commoditize
“Look, our fundament, my fundamental belief
Is that the models will commoditize.”
Prediction Open · timeframe Dec 2029
Vintage 2020 and 2021 alternative asset funds will deliver awful returns
“I think the venture growth ecosystem gets like a bad rap, but it's gonna be every alternative asset. Their 20 and 21 funds are gonna be awful relative to earlier funds because you had, you know, people thought they were gonna make, you know, a forex in, you kn…”
Insight
Good growth businesses have cumulative historical cash burn below current revenue
“We're looking for, like, this one-to-one ratio. In a world where capital is a commodity, if you can build a business that's growing nicely while burning less than your, well, burning less than your revenues, you've got a pretty good business.”
Insight
Mitchell Green: Software Moats Come from Distribution and Retention, Not R&D
“Our belief, for right or wrong, is that the competitive advantage of software company has never been about R&D.
We're not building semiconductor chips.
Like we're not, it's, we're not building biotech and pharma companies.
This isn't that it's to build like ch…”
Opinion
Mitchell Green: Best Risk-Adjusted Returns Right Now Are in Public Software
“I think the best Chris suggested returns right now are in
Public software names.”
Assertion Not checkable as stated
Lead Edge Capital has lost its entire investment on only one deal
“We've, I think we've only lost all of our money, like in one deal ever.”
Assertion Not checkable as stated
Green: About a third of Lead Edge's exits are secondaries
“Probably a third of our exits have been secondaries.”
Opinion
Private equity firms manage liquidity and exits better than venture funds
“We think a lot of firms do a really, really good job on the buy. Very, very few firms do a very good job on the sell, like, knowing when to sell, pressuring to sell, and we would tell you that the private equity funds tend to do a much better job on the sell t…”
Assertion Not checkable as stated
Green: Deals meeting eight criteria do not outperform deals meeting five
“If we do like an eight criteria deal versus like a five criteria deal, there's like actually no correlation to like, it was a better deal.”
Insight
Green: Companies should keep engineering headcount and leverage AI productivity
“We actually, I, for one, strongly believe that if you think in If your budget in twenty-twenty-four for twenty-twenty-six was to have a 150 software engineers, you should still have a 150 software engineers, because those software engineers can be, like, expon…”
Opinion
Green: Platform dominance and excess capital make building giant internet companies near impossible
“So like capital's everywhere, but like four companies control distribution. So like good luck going to build a giant internet company. And right now there's just like too much money chasing You know, at least in Silicon Valley, two few great things.”
Insight
AI agents consume more compute resources than humans, driving infrastructure growth
“And actually that like agents appear to consume more resources and actually people. And so like the, some of these consumption based models, like the growth of companies”
Disclosure
Green: Lead Edge is completely structure-agnostic when investing in companies
“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.”
Disclosure
Green: Lead Edge holds roughly 20 investments per fund
“We do not run funds with like a hundred, 115 companies in them, we have, we run funds with like 20 investments in them”
Assertion Not checkable as stated
Green: 50% to 60% of Lead Edge portfolio companies are profitable
“50, 60% of our companies are, like, profitable businesses.”
Disclosure
Green: Lead Edge invested $36M in Toast and sold $180M pre-IPO
“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…”
Assertion Not checkable as stated
Green: Lead Edge sold Toast secondaries at $40-$50 vs $30 today
“We sold like in the secondary markets like 40 or 50 bucks in toast. The stock today is like 30 bucks.”
Disclosure
Green: Lead Edge invested in Toast at 20x revenue ($500M valuation)
“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.”
Assertion Not checkable as stated
Green: Initial leaders remain involved at exit in roughly 75% of Lead Edge deals
“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.”
Assertion Not checkable as stated
Green: Insight Partners speaks with roughly 30,000 companies a year
“They probably talk to, like, they probably talk to 30,000 companies a year.”
