Avery Rosen is a partner at Lead Edge Capital where he's been for over 11 years. Now he's currently helping to build out the West coast team out of Santa Barbara. Lead Edge is a growth stage fund with over $5 billion AUM and a very unique LP base of over 700 strategic individuals. Avery, good to see you. Thanks for coming on the show.

Thank you, Minnie, great to hang out.

I'm super interested in what you're seeing at growth stages today, but I thought we'd start with a little bit more about Lead Edge. How do you describe Lead Edge? What's the Lead Edge reputation?

Absolutely. So, you can think of Lead Edge as a pretty traditional, Growth Equity Fund. We do software, internet, tech enabled services, investing globally, and we manage about 5 billion dollars that we've raised over the last 14 years or so. What makes us different from other investors really does stem from where we've taken our dollars from, and that's what you alluded to, is we have over 700 LPs who are in our fund. And I typically say it's a bit nutty uh, when I talk to other GPs, because it is a lot to engage a group and manage a group like that, but it is highly strategic. These are current and former Fortune 500 executives. These are founders and entrepreneurs. These are industry advisors, and our pitch to them is don't invest unless you're willing to help our companies

Well, okay. But on that, like, I want to say, what do they get out of it? But like, I'm just eager to take money from people who want to give me money, but I'm not also asking them to do work. Like, do they get economics? Do they get special, you know, fancy dinners?

It's an awesome question. And people do say, hey, you asked people for money and their time, what's up with that? And it's interesting, you know, the truth of the matter is that this has been really a snowball effect over the last decade, where it's people pulling in their networks to say, hey, you got to meet these folks.

And honestly, oftentimes it's as we are activating a company to help, like we might get a list of here are the top dozen prospects that I'm looking to sell to this quarter from one of our portfolio companies. We syndicate that out to the LPs. Someone raises their hand and said, Hey, Okay. I'm on the board or I used to be on the board of this company or I know someone who's involved with this company and I can help you get to that executive, right? That warm introduction.

When we get to that executive, we have to, you know, engage them. We sort of tell them about our model and hey, we try to activate folks and they're sort of like, wow, this is interesting. Like, said, maybe they said, hey, invest in funds and we keep in touch with them over time.
And so sometimes we've had those interactions where they say, Hey, I really appreciate it. How you engage me, how you approach me. You know, followed up. How you were thoughtful with our time. How you would introduce me to an interesting and high growth vendor that actually was relevant to what I was looking at, and from there, they might become an LP.

So you've got these 700 LPs. It's 5 billion AUM. What's your current fund?

Yeah. So we're investing out of our sixth growth fund, which is just under 2 billion dollars. We're a couple of years into that now, and we're writing checks that are. $40 to $50 million on the lower end out of this fund all the way up to $250-$300 million on the higher end. And so there's quite a bit of flexibility And what I would say is flexibility has always been a part of our story we lead rounds absolutely and we do that quite a bit.

But we're also pretty creative whether that's Kind of minority rounds and minority growth rounds, as well as maybe things that are more control or more majority growth rounds as well as secondaries. We've always been pretty active in secondaries, even from the early days of our firm. And that's part of the ethos of we don't have ego and how we get on your cap table.

We love to get involved with companies where we can help and we lead by helping. That's always kind of been the ethos is to say, hey, let's show you that we can add value that we can open doors. as a result of that, it's really leveraging expertise of our LPs to add value and hopefully grow those positions over time. And so certainly have a flexible mandate in that sense.

Do you think of yourself as VC or like PE?

Yeah, I would say, you know growth sort of sits in between right? A lot of PE type deals are generated. The returns are generated with certain levels of financial engineering and leverage and debt and we really focus on growth.
And so our underwriting typically is around companies that are finding growth, having a catalyst for growth, ways that we can help them in the late stage company building. So it really sort of sits in between, I would say.

Interesting. No, that's a good distinction that PE is thinking like efficiencies, financial structures. You're still growing. What are you looking for? Like, I think I listened to Mitchell Green?

That's our, that's He's your partner, sure.

Maybe it was a little old interview, but he was like, there are eight criteria.

That's the case, and that's from, that's from the early days. That criteria set is how we kind of break it down and say, Hey, how do you fare against the lead edge eight criteria?

And I'm happy to walk you through it. Just because I figure that it is kind of interesting. You know, you think about it. It's. It's 10 million dollars and above in revenue its growth, you know, typically it could be 25 to 50 plus in growth It's gross margins 70 plus it's interesting.

We think a lot about capital efficiency, right? And so we think about a metric that's How much capital have you burned relative to your scale today? There are a lot of companies that have burned like 80, 100, 150 million dollars to get to 10 or 20 million dollars in revenue. That's a bit lopsided for us. We try to find companies that have burned 10 or 20 million dollars to get to 10 or 20 million of revenue.

Now, having raised that money is not the same as having burned it, but we think a lot about uh, the capital efficiency in businesses. We look for recurring revenue businesses. We look for companies with high retention rates. And so, you know, typically as a sign of people love your, product and they can't live without it.

Obviously, we'd love to see great net expansion as well. And so, so maybe you know, ultimately net revenue retention above, you know, 100 percent kind of thing would be awesome. I see different, different benchmarks. I would say for certain types of segments of the market, you might want to see 130 percent plus for you know, other can maybe more SMB focus. Maybe it's more like 110 percent is the best. But we think a lot about net dollar retention and expansion

I like knowing your metrics, it's interesting.

I figured I'd give you a sense of how to, how to benchmark it. And so recurring revenue, diversified customers, I think I covered most of them in there. But the point is, we sort of look and say, Okay, we call all these companies. How do they rank between on this lead edge eight? And we typically invest in 5 to 8 of those criteria.

No, they're all interesting criteria when you're looking for companies that are profitable. I think it's what you said, or break even, you know, how do you think about that versus growth?

It's totally the right question. And that those are the two that I would say is typically the biggest trade off. Right. And so if we're investing in a business that's growing 80 percent, 100 percent, over 100 percent the expectation is they're likely burning, right? Finding the company that's very capital efficient, maybe profitable, ain't growing that fast. You know, typically those are in the criteria set that are pretty hard to sort of find and certainly hard to go and lead rounds and because they might not need money.

What I would say it's typically a trade off. I probably are familiar and hear talk about the rule of 40 and orienting around taking your growth rates, plus or even the margins and adding those together.

And so companies that are above 40 it makes for a good business. Yeah. The way I would think about it is we think about incremental investment, whether that's in sales and marketing, whether that's in, you know, capital burning in the next year, what is that going to generate from a new ARR from a business growth perspective and sort of understanding, okay, the business might be burning today, but they aren't adding efficiently uh, they get paid back on that in a reasonable timeframe, and especially for businesses that are extremely sticky, right? Where the no customers are going to leave and they get really adopted and embedded, you know, you might be able to invest quite a bit in getting those customers online because you're, expect to have them for many years to come and be able to grow with them.

What is your thought on like, I'm a profitable business, I've got good net revenue retention, why should I take money in general?

I think you're totally right. And many of those companies might not need to take money and they can just sort of compound and, grow and maybe make nice distributions to the owners and all the rest of it. I think when we are engaging with those companies, it's typically around tailoring. What they're looking for in a future chapter, and maybe it's a next chapter to inflect growth upwards.

Maybe it's the point of, hey, I've never really invested in growth channels, or sales and marketing reps, or partnerships, which might take longer to pay back. Or companies have reached some real scale, and they're saying, hey, I could be a consolidator of other businesses. I can do some M&A. I could, you know, Gear up to go public someday. You know, there's other sort of ambition, and so, you know, I would certainly say, yeah, growth capital and even outside capital in general is not necessarily for everyone. But oftentimes we're thinking about what does the company actually want, and how can we tailor our support of them and our help to that.

So were you doing cold calling when you started?

Absolutely, got my start cold calling for Lead Edge. And it's the funny story on that is I, my first cold calling job was selling cutcoat knives.

I know I know this because I listened to you on a Cutco podcast.

That's right. That's right. So that's how I got my start. I was, you know, I was 18. They came to my graduation and said, Hey, vector marketing, go, go give it a try. And I was very successful in that summer, you know, before college selling, selling knives in people's homes. And when Mitchell heard that, he said, Hey, if you can do that, you could probably sell my firm to Oxford.

And so that was the foot in the door. And then, yeah, it was absolutely, you know, chasing people down, you know, folklore on, the summer of 2014, you know, 40 emails and voicemails in, Doug Song's inbox. He was the CEO of duo security at the time and kept pounding the phones and, and, you know, tried to break through there and, we have much better processes now with that.

If they're great companies, you don't have to reach out 40 times before getting some more senior help. But at the time, I was just hustling and chasing people down. And that's really the ethos of the firm is to find ways to be a part of great companies and find ways to break through.

So, so the story is that there were 40 voicemails from you in Doug's voicemail?

It was, you know, I think he probably set up some filter of, you know, the investor related emails, you know, go to this folder. But yeah, it that summer I was gearing up, reaching out and I was every couple of days, I was either leaving him a voicemail or sending him an email was able to do the kind of the bank shot to get a warm introduction via my partners and via the, board members.

So, fortunately we were able to partner with them and subsequent start of the year be an awesome company to work with over the years. But that's a little bit of the beginning.

Do all growth equity firms now, are they primarily outbound? Do you guys do anything different with outbound?

It's a great question because I think there were, you know, the firms that were earliest to do it. We're probably like summit T.A. And that was any type of style of business. You know, my partners were some of the first cold calling analyst investment venture partners back 18 years ago. My other partner was over at insight partners, and there's great firms that do outbound.

So, what I would say is we've certainly built processes and technology that helps support our team in that in those efforts, but really, it's not a volume play as much as it's a kind of bespoke outreach to companies where we're interested in where we think we have LPs who can help.
And we're happy to start with the help. So you can see that. And that's probably one of the key things that was a bit different about us that was always energizing for me as we were pursuing companies that were interesting is, is actually seeing that value that happened.

Yeah. So keep going with this. Let's say you meet one of these companies that has, I think you said like five, six of the eight criteria. You're getting excited. How are you, I think you told me you'd, help elucidate me on sort of working backwards on how you're thinking about your investment and how the company is going to need to grow to get you the returns you need.

I think that's totally right. I'm happy to get into that. I guess maybe the one thing I'll mention is, how to think about the growth stage, right? And so the growth stage is an element of product market fit. And typically, it could be you product market fit at 5 million product market fit at 10 million of ARR, maybe 10 million or above, I think probably you pretty much proven, Hey, there's customers, people who will pay for it. Right? The next element of growth stage, I would say, is having a growth engine that's starting to be built out and where, you know, which levers to pull to continue to grow. And so that's what I think is maybe a little bit different at some of these inflection points where some companies are just experimenting with. Here's how I will grow. Whereas oftentimes companies at the growth stage will say, Hey, if I make this investment in headcount, let's say for salespeople, or I make this investment in marketing or partnerships, I kind of know what I can get from it. Or I have a new product that launched and we're getting this level of attach rate and let's put more fuel on that fire.

To get to what you were saying, and I do think about at the growth stage, thinking about the work backwards map, and that's sort of needs to happen for you to generate your return. And so as much as you know, these companies could have some great momentum. They could be de risk in certain capacities from the earliest stage of finding product market fit in the search for that.

There's also the hey, how big can this be? How big is this market opportunity? What are some of the precedent transactions? What are some of the companies , are relevant to be looking at and then working backwards to say, hey, if I want to make a 2 to 5 X return in 2 to 7 years, what needs to happen?

And maybe what's the multiple when they're at that scale growing at that speed? Obviously, when the numbers are a bit smaller, you might be able to grow even faster and add a lot more, you know, at scale. Maintaining high growth at scale, obviously, is a little bit, tougher.

So do the multiples usually go up or down from where you invest?

I think that the way to think about it at the growth stage is typically you're not underwriting multiple expansion in a definitive sense, right? You might be saying, Hey, there are reasons why this business will get a higher multiple. Once there are certain scaling up, whether it's gross margins or profit margins or business growth, even, you know, there's reasons why companies can re rate to, to higher multiples and have a higher business quality.

And that could be part of the underwriting on the way in, but just saying, Hey, We bought it at six times and it's going to trade at 20 times like that can't necessarily be that. And part of what you have to think about at the growth stage is if you are paying a high price on the entry and expect maybe multiples to come down, what is the sort of growth and strategy that's going to, you know, bridge the gap and also generate your return?

And when you're doing, you said you'll also buy secondary, like you don't care how you get on the cap table, you just want to do it. What I've seen in secondary is probably pretty limited, but I sometimes see growth investors coming in. They want to deploy 50 million, the company only wants to raise 30 million, and so they sell an extra 20 in secondary, but just help me understand the secondary markets today, and when they come into play.

It's a good question. And I do think the dynamic you described is a relevant one. Because to get you to a 50 million check, there might be 20 million from the secondary. And it could be a variety of levers these days, right? It could be an employee tender offering, right? Where you're saying, hey, our employees want to know the value of their stock and that they can generate uh, returns and get liquidity for it.
Can you just explain tender offers to me a little bit? Like how is tender different than secondaries?
It's similar, but what's different with a tender is that you're, going to the whole shareholder base and with, parameters, with saying, Hey, here's the price per share that is getting bought. Here's how much of your state you can sell. various, you know, things about it.

Right.

So it's just like a more public, secondary purchase where you'll go to anyone?

it's just more, structured, if you will. includes more people. It's not sort of one off. Hey, I buy from one shareholder and, and do a swap. It's a little bit more of a, of an offer where it's more organized. You know, kind of make the market ultimately there could be multiple buyers. It could be multiple sellers, but it's just a little bit more formal, rr, you know, we've had folks who've sold out really old funds that have been around a long time and they've had extended, extended. And now they're saying, Hey, let's let's wind this down. And so sometimes there's sales from that. So there's a whole range of, of types of secondaries. What I would say about our strategy versus maybe other pure secondary buyers is that we're typically very focused on the company itself.

And underwriting, this is a company that we're excited about, that we want exposure to and not necessarily buying like a basket of a dozen or a hundred or whatever it may be. Based on how they come together.

So when you're doing this, you're leading around, and you, Avery, are taking a board seat, what do you think makes a good or bad board member?

I would say I certainly like the boards that I work with and those folks I've seen, you know, strong impacts. but part of me entering at the growth stage is I didn't have to see them help them navigate that. Can we get to product market fit? Can we get our next big partnership? Can we get our next round of investor? You know, at that point, they're already sort of some level of engine that's built. And so it's about the late stage kind of company building. I wouldn't want to miss think about experiences that I've had about board members. I do think there are certain board members that might kind of parachute into a business right during the board meeting or during their updates.

And then sort of say here this is what you should do and kind of point to that and sort of be very prescriptive on the actual blocking and tackling and oftentimes that might be tougher for entrepreneurs who live and breathe their business to take that sort of feedback. And so, you know, I think board members who asked topical questions and to help illuminate, Hey, you're thinking about this. But have you thought about this? Or have you spoken to someone who has this relevant experience? And maybe I can introduce, you know, that I do think is valuable. But I think being like super prescriptive and just, you know, saying this is the right way to do things.

Often it's tough. Now, there are great operators who've been there and you've seen a lot of things and they can be probably more prescriptive, but you know, I would say oftentimes that's, that's not always the case.

Yeah. So what's the growth stage today? What are you seeing? Like, are just as many deals getting done? Are there just as many companies raising? Are valuations lower? Have they come back up? Like, what's the state of things?

It's definitely a dynamic time in the market, I would say definitely deal counts are down, right? And I think 2023 was a much lower year compared to even 2022. Cause I had the sort of first half. Where it was still pretty exuberant and then certainly down from 21 and 20 when there was a ton of deal making, and it felt like every company was raising every six months, right?

The dynamic you've seen play out in the last year and a half or so is really that companies have had the cash to sort of make it work and figure out, hey, Okay, I'm reorienting towards more efficient growth, now, many of those companies had enough of a cash balance where they didn't need to think about raising, or they ultimately have done in the last couple of years, maybe a bit of an extension.

I think maybe those companies now, at least the ones that are starting to pick their head up and say, Hey, I'm actually might be ready for a growth round. And I think it's starting to happening more this year. I think it will happen more in the second half of this year as well, is that those companies have said, Hey, even in this environment where there's more scrutiny on let's say software spending or seats or growth, we found ways to efficiently grow.

One of the things you said there, which is like software spend being down like their customers are spending less. Is that still a true statement? And where do you think spend is the most up or the most down? And where is that going?

The part of the spend dynamic was driven by per seat business models, right? If you're a software company that sells based on a number of sales people that company has for the number of people folks have as engineers or in I.T. There was some right sizing of those accounts, and so, it felt like 23 was a year where most budgets were pretty flat, was a lot of scrutiny there.

You know, one of the areas where I do spend time investing is in cyber security and in IT, and that is one that's been pretty resilient. I would say, though, there are oftentimes is consolidation between vendors and people might have tools that do parallel things, and there might consolidate to one platform.

What I would say is that, you know, in some of the CIOs that we engage from our LP base and otherwise, is that level of spend will should grow a bit more this year, particularly in cyber.

And so is that consolidation, like in cyber, I mean, sometimes that's good because you're getting exits, but sometimes that's bad. as in, you know, you want to know that this is a big standalone business when you're investing, how do you evaluate that, like in cyber or otherwise?
It's the right question, particularly because cyber oftentimes is a very inquisitive category. And you have people who make great features or great elements of a product that ultimately roll into some of the larger platforms. And that happens over and over. And so as a growth stage investor, some of the underwriting needs to be, Hey, can this be a large standalone business?

And can I be the one who, consolidates other elements of workflow or is really valuable to my customers? And so I oftentimes look for cyber products where its a little bit more workflow oriented. It's actually something where they're engaging with daily that actually really ties to their business. And now I can drive some of the stickiness and allows you just have the right to layer in other products to those same customers. And so that's a natural dynamic with some of the cyber investments we've done over the years where they're able to have a natural expansionary motion because they have bigger suites or bigger products or other things that they can do for those customers.

What else do you see for exits? Like people aren't doing IPOs and you're doing later stage rounds. No one has IPO. So, who is doing the acquiring given that, you know, Google meta or not able to do big acquisitions?

There's certainly more scrutiny around that, and I think it's, it's interesting because obviously now we have a few, yeah, so ones that are filed now, and there's maybe starting to be some momentum there. But I think you're right. Typically, above a certain scale, it is harder for the big tech folks to be buying things you're seeing. And we already alluded to cyber. But some of these acquisitions, maybe in, let's say, the 300 million to a billion dollar range are still happening.

Companies in Palo Alto have been very acquisitive, Checkpoint and Zscaler about, you know, as well. And so I think you'll see more of thatI would say the other Related buyers are certainly selling to private equity firms. And that's been more of a buyer of businesses and whether those are take privates from the public markets, where you've seen quite a bit of that, but also companies that, Hey, I wanted to go build up IPO ready company, but ultimately realize, Hey, I should probably be orienting around the rule of 40 that we were talking about and thinking about efficient growth and thinking about maybe I'm a platform that can be a consolidator of other businesses that have adjacent capabilities.vAnd those are oftentimes better in the homes of private equity firms.

Yeah, I've never totally understood why PE firms do so well with companies because they do seem, you know, let's just take a growth stage company with smart venture capital or growth equity investors around the table. And I think it, as I understand from this conversation, you talked about like they have different financial instruments that they'll bring to bear PE firms will um, and they'll reorient the company around different goals as I understand it. But I still don't totally understand why PE can sort of change the trajectory so dramatically.

It's a great comment. And I think the way to think about it most simply is around the orientation of the business. And so you might have a company that only thought, Hey, to grow, I need to hire people and hire more sales reps and open more markets and do other things to grow.
And if you were to think about a company that might spend 40, 60 percent of their revenue on sales and marketing, well, what happens if they spend 20 percent of revenue on sales and marketing or even less than that, and, if you're coming growing 35 percent and you're able to cut from, you know, 50 percent of spend to 20 percent of spend being on sales and marketing and only grow 5 percent less, that is really the leverage in because a lot of that flows through the bottom line.

What are you seeing, what's sort of the interplay right now between the public markets and the late stage private companies and how you think about the differences and the interplay?

What I would say is the pre IPO markets, right, the latest stage sort of growth rounds without many IPOs happening, it's really hard to get a calibration of like, here's where I can invest.

But I also would say, Okay. There are examples of, hey, here are companies with 100 million, 200 million of revenue. Maybe their growth has certainly come down a lot more now that they're a public company.

And, add to that, you know, with the larger numbers and they're not trading at huge multiples, right? You might hear about companies in the private markets that trade at much higher multiples than, but average sort of NTM or, or kind of even ARR style multiple is about six times, right?

And maybe the median is more like five times. And that's, you know, creeping back up a little bit. but still kind of approaching the, the historical averages. And so when you think about getting on the scale and saying, what does the company actually worth? you do have to project out to like, what would I be worth in the public markets?

When you think about the different kind of quartiles of public companies in the range of, you know, three times to 13 times you know, kind of ARR multiples. it's definitely illuminating, so that will affect what the kind of late stage growth routes are able to be priced at.

You know, I mean, I know this is a hundred years ago, but like, companies used to go public when their valuations were like a billion dollars, like one billion or something. Why don't companies do that now? And like, what do you advise your companies as they get close to scale?

It’s really interesting, and I think it just depends. Partly we will see how these next number of IPOs happen, you know, and unfold, and some of the first ones to go out are the ones that are up some real scale. They're the ones. That maybe are 500, 600, 700 million of ARRAnd so they should be pretty highly valued, I would think, but we'll have real sense.

Part of what happens when you're in a billion dollar IPO valuation, or even below that, oftentimes there's a whole ecosystem around going public and the coverage that happens with it and the types of investors who are able to purchase your stock when there's not that much float, right? When there's not that many shares trading, you can't necessarily bring in a ton of new investors.

I've heard that before, you need coverage. It never, like, it didn't naturally follow for me. Coverage is good because you need float, which allows you to, you know, have more people interested. Is that just the basic way it works?

There's a variety of ways to think about it, but as you think about communication with investors, there's, you know, when your cap table is very small and it's just the folks locally or the people on your board, you're able to keep in touch with them on regular cadences or in board meetings.

And oftentimes I think there's a bit of a graduation from private companies that are used to, you know, I'm doing it my way and I'm communicating what I want to share and to just a small group.

To actually saying here why, you know, why of all the opportunities and all the, all the companies out there that, I'd want to own uh, in technology or in, in any sector. Why choose yours? And why engage with yours?

And you mentioned sort of the coverage and the other people who support that ecosystem. I think it's, it's spending time with the shareholders, it's going to the related events. Getting to know the people who are actually, you know, owning the stock, it matters.

That's interesting, because it's not like you, your IR person, telling the story as directly, maybe because it now has all these analysts and others who almost tell the story on your behalf.

It's a good point, part of the coverage is, if you are able to be in the story, or in the narrative, or in the related trends, or in the, you know, if, if your category is of interest that might give you some natural attention.

But, if it's hard to even discover your business or to hear about your business or to think that your trends are part of growing sectors or whatever it may be, it might be harder to attract new investors. And so I think that's part of why it all kind of feeds into itself.

Yeah. I also want to make sure I ask you about vertical SaaS, you do vertical SaaS yourself. Do you think about it kind of the same as what you said about cyber, which is if you've got the workflows, you're more embedded. Or how are you evaluating what makes a good vertical SaaS company?

I think you're totally right. I really do like investing in workflow software. Particularly ones that are focused on verticals. I think you're able to be pretty embedded into those workflows. You're able to maybe even be collaboration and facilitate that workflow between various team members.
Which was probably the key thing I'm typically looking for in an investment that customers love using it. And that's, it's inherently sticky. People want to use it more over time. Uh, But then I think with vertical market software, you're really able to. Have earned that trust to hopefully then be able to layer in those issued products.

And I think that's a really key piece of the puzzle to say, Hey, we do this for you really well. Here's our next, you know, part of the, of your process. Here's our offering for that. Do you want to adopt it? And then being able to see that sort of multi product attach rate over time
What do you think vertical SaaS investors get wrong?

So I would say it's gotten you know, maybe over the last decade, it's certainly become an area where there's a lot more focus, I think over that decade, part of the thinking is, Hey, this is a really narrow market, limited market, not many people to sell to incumbents that are already sort of bended or sold through this category.

And oftentimes the thing that you might miss about that is that, Hey, by doing what you do and doing it well, and then maybe consolidating other elements of the workflow, such as payments, right? Payments has been a big lever to layer in with vertical software. You're able to actually grow your market and grow your opportunity in a way that's really, really meaningful.

But I think that's probably the most interesting element of vertical market software investing is saying, Hey, what other. Parts of the platform or the workflow do we have a right to win it and right to serve it?

What have been some learnings? Like, how have you, Avery, evolved as an investor?

I appreciate the question. And I would say, look, one of the key areas I would say grown is I'm someone who's really drawn in by customer love, right? When a customer is raving about a platform, I get really excited about it. I think that's a great validation of, that. the thing that you might get stuck in is you do have to sort of think through those next layers of evolution.

So I think those additional layers of probing to understand, hey, this Not only do you love what they do for you today, but will you buy more from them over time? do they actually have that right to serve in, whether it's payments or whether it's some other element of the platform. And to say, Hey, well, we thought we'd get this level of attachment, but actually they already use another vendor for that. And they're pretty happy with that vendor too.

Even some customers don't always think through that next era and the next chapters of when push comes to shove and someone says, okay, you have five vendors doing things that are adjacent, which stay, you have to be a part of the, who stays category. And so I think that's a really important piece of the puzzle too.

Yeah, I like that. Let's talk about you for a second. You're in Santa Barbara now, so part of the Southern California ecosystem, but you're from LA. You Went to Harvard Westlake?

Went to Harvard Westlake and I'm a third generation from LA.

Did you like Harvard Wesleyan?

I, yes, I really did.

Is it the same or has it changed?

I would say certain things about it probably are pretty similar. Like, I think 1 of the things that's definitely changed is these campuses have gotten renovated and they're beautiful. I was on both of them, but there's definitely been upgrades both respects. It still is a very competitive environment, and I would typically folks ask me about Harvard West.

Like I say, you kind of have to be self motivated and a self starter, right? If you're just feeling like, oh, I've got to keep up with everyone else. And I got to take the hardest classes and do all these extracurriculars. It can feel really intense. For me, I have a lot of different interests. I did sports. I did performing arts. I took those classes and those advanced classes. Physics and math classes, and really were drawn to those, and so I really enjoyed my time there,

I like to ask people how your friends would describe you, but I'm going to add, yours is going to be more complicated. So like, how would your friends describe you, and is it the same as they would have said in high school? What they'd say now?

I'm sure they would say I talk fast, which you probably noticed in this conversation. I lead with a lot of energy and I think Gary probably could hear that as well. I get Passion about things that I care about. I try to be a leader.

I'm very active with Israel. I'm on the board of birthright Israel's foundation, I actually did an early stage venture capital in Israel, which also got me my start in investing. And so I'm a leader in Israel. for other, you know, young Jews to be able to go to Israel and see the truth about it and be able to see the innovative culture there and all the amazing elements to it.

Great. Avery, it's been really good to get to know you. Should we all be sending companies your way as they mature, or are you like, oh, we're all outbound nowadays?

No, I'd love to, obviously I'd love to hear about great companies. I typically, you know, most of the investments we're doing are about 10 million and above it and revenue. Maybe they're, you know, 20, 50, 100. You know, they're probably later stage. I do like to meet them when they're in the 5 to 10 million ARR range, right?

That's kind of that inflection point stage, but I love to try to get to know them and try to help in advance. Oftentimes, it's very hard when someone lifts their heads up and says, I need a term sheet in two weeks. And that's oftentimes a sprint. And we do those too. But I'd like to get to know folks and like to try to help up front. So welcome the chance to meet high growth companies. once we're our network and can add value.

Well, it's great to see you in the Southern California ecosystem and really building out the Southern California presence and it's amazing growth and I've really appreciated the chance to get to know you and Lead Edge better.

Thank you Minnie, I really appreciate it. A lot of fun to chat with you.