LPs Create a Sourcing and Diligence Edge

My guest today is Mitchell Green. Mitchell Green is the co-founder and managing partner of Lead Edge Capital, a growth equity firm that has spent 15 years building one of the most disciplined investment machines in the business. 

Unlike most firms chasing power law outcomes, Lead Edge is designed to deliver consistent returns by talking to thousands of companies a year, applying a rigorous eight-point criteria to filter down to a handful of investments, and leveraging a uniquely constructed LP base of world-class executives and entrepreneurs. 

In this conversation, Mitchell walks through every component of the machine, from how they source and evaluate companies to how they think about selling, building culture, and staying competitive in a world being reshaped by AI.

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

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Editing and post-production work for this episode was provided by The Podcast Consultant (⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://thepodcastconsultant.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠).

Timestamps:

(00:00:00) Welcome to Invest Like the Best

(00:00:53) Episode Intro: Mitchell Green

(00:02:01) Cold Calling 10,000 Companies

(00:03:54) Building the Lead Edge Machine

(00:06:15) Lead Edge’s LP Profile

(00:09:22) Hitting Doubles and Triples

(00:11:39) Knowing When to Sell

(00:15:08) Lead Edge’s Eight Buying Criteria

(00:18:12) The Opportunity in Enterprise Software

(00:24:54) Using Criteria for Filtering, Not Prediction

(00:27:11) Building Relationships with Entrepreneurs

(00:29:16) Improving the Investment Machine at Scale

(00:31:59) Lead Edge’s Culture

(00:35:08) Mitchell’s Schedule

(00:36:37) The Mount Rushmore of Investment Machines

(00:38:40) The AI Readiness Score

(00:40:50) Overhyped, Frothy Markets

(00:42:16 When AI Will be a Good Opportunity

(00:44:29) Lessons from Competitive Skiing

(00:47:33) Starting a Fund & Keeping Score

(00:49:15) The Kindest Thing