Operators gaming narratives and AI hype

In this episode of Run the Numbers, CJ sits down with PSG Managing Director Chris Nesbitt to unpack how great deals are actually found, how investment decisions are really made, and why narrative often matters more than most investors admit. They also dig into forecasting, boardroom authenticity, simple vs. complex models, and the roles of market, product, and leadership in driving outcomes.

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LINKS: 

Mostly Talent: https://mostlymetrics.typeform.com/to/cLTxtAsN

Guest: https://www.linkedin.com/in/christophersnesbitt/

Company: https://psgequity.com/

CJ: https://www.linkedin.com/in/cj-gustafson-13140948/

Mostly metrics: https://www.mostlymetrics.com

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TIMESTAMPS:

0:00 Preview and intro

2:44 PSG origin story

4:01 Growth to 30B AUM

5:07 Strategy: small software at scale

5:50 Vertical SaaS treasure hunting

8:10 Ministry Brands: software meets payments

9:28 Sponsors — Brex | Aleph | RightRev

12:46 Early M&A work and rollup strategy

15:52 Sourcing is more competitive now

18:28 Smoke signals and relationship sourcing

21:22 Does brand get you in the room?

22:15 Authenticity as a sourcing edge

22:52 Sponsors — Rillet | EY | SpendHound

26:09 Brand name of investor or deal partner?

27:44 Investors are narrative driven animals

29:18 Market, product, then execution

31:26 Danger of falling in love with the narrative

33:40 Operator AI pivot story: GRC company

34:51 Keep it simple: one tab, five key inputs

39:21 Forecasting confidence beyond 12-18 months

41:51 What makes a useful board meeting

45:01 Build vs. buy: the payments decision

47:45 ARR vs. EBITDA multiples

50:30 Lightning round

50:34 Board materials: send 3 days in advance

51:03 LTV to CAC and cap software debates

51:32 First deal at PSG

52:35 What young investors get wrong

54:04 Credits