The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified
412. The Hierarchy of Bullsh*t, The 8 Criteria that Matter Most, Why Boiler Rooms Win, and the Key to Raising Capital (Mitchell Green)
Dec 4, 2023
Mitchell Green, partner at Lead Edge Capital, discusses investment criteria, leveraging networks for opportunities, hiring and evaluating analysts, investing in private companies and IPOs, AI innovation, and the importance of communication and treating LPs well in the venture capital industry.
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Quick takeaways
- Lead Edge Capital has eight criteria for potential investments, including revenue, growth, and profitability.
- Lead Edge Capital differentiates itself from other venture capital firms through its extensive network of LPs, providing industry-specific insights and making introductions.
Deep dives
Investment Strategy and Criteria
Lead Edge Capital focuses on growth-stage ventures in software, internet, consumer, and tech-enabled services. They have a set of eight criteria for potential investments, including being 10 million+ in revenue, growing 25%+ annually, having 70%+ gross margins, demonstrating capital efficiency, achieving 90%+ gross retention, having a diversified customer base, being recurring revenue-focused, and being profitable at the EBITDA level. They aim for deals with a two to five times return over two to five years.
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