Gross Retention is the single most fundamental metric for determining the long-term value of a software company, as it directly correlates with potential cash flow margins and durability.
The most effective venture capital strategy for Insight Partners has been to make significant follow-on investments into its proven winners, generating the firm's largest exits.
Net Retention is a highly misleading and 'uninformative' metric for evaluating software businesses, despite its popularity with Wall Street.
AI's primary impact on established software companies will be as a 'massive TAM accelerator' that expands their market, not as an existential threat that disrupts their core business moats, which are based on deep business knowledge.
A centralized, in-person operational model is superior for investment decision-making, as proven by the failure of a past geographic expansion and negative experiences with remote work.
1999
Insight Partners executed one of the earliest software buyouts with its acquisition of Vertifor, establishing an early presence in the strategy.
2000
Insight Partners attempted to scale geographically with a European fund, which Horing describes as a failure that led the firm to centralize its investment operations in New York City.
Post-2000s
The firm honed its strategy of making significant follow-on investments ('double down checks'), which Horing identifies as its best-performing strategy, leading to major exits like Monday.com and Encino from initial investments under $25 million.
COVID-19 Pandemic
Horing notes a negative experience with remote work for decision-making, solidifying the firm's conviction in a centralized, in-person operational model.
Present
Horing describes Insight Partners as managing a ~$12 billion fund, deploying over $3 billion annually, and actively investing in AI, viewing it as a market accelerator rather than a fundamental disruptor to incumbent software companies.
▶Contrarian Valuation MetricsApr 2026
Horing champions what he considers to be fundamental, predictive metrics over those popular on Wall Street. He argues that Gross Retention is the single most important driver of exit valuations and that the change in net new bookings (the 'second derivative' of growth) is a better predictor of success than overall revenue growth, while dismissing Net Retention as uninformative.
Investors following Horing's philosophy would prioritize companies with durable, non-discretionary products (high gross retention) and accelerating market adoption over those that rely on upselling existing customers to mask underlying churn.
▶Insight Partners' Investment PlaybookApr 2026
The claims outline a scaled, multi-stage investment strategy fueled by a large sourcing team and centralized in New York. Key tenets include making early bets (e.g., Wiz at zero revenue), executing software buyouts, and systematically deploying 'double down checks' into proven winners, which have become the firm's best-performing investments.
Insight Partners' model appears to be a highly structured, repeatable process designed to leverage scale and operational control, favoring disciplined capital concentration over a 'spray and pray' venture approach.
▶The Evolving Scale of Venture CapitalApr 2026
Horing observes a significant shift in the private markets, where a $1 billion exit is no longer a major victory for top VCs. He points to mega-deals like VMware's $60 billion sale and the rise of large, IPO-like private funding rounds for companies like Databricks and OpenAI as the new standard for success.
The bar for a top-tier venture return has been raised exponentially, suggesting that firms must not only identify unicorns but also have the capital and conviction to hold and concentrate their positions for much larger outcomes.
▶Pragmatic Perspective on AI's ImpactApr 2026
Horing views AI not as an immediate disruptor to incumbent software companies but as a 'massive TAM accelerator.' He believes AI's primary value is in augmenting the deep business knowledge moats of companies like SAP and expanding user bases for products like Photoshop, rather than in simply reducing code development costs, which he has found to be minimal so far.
Horing's analysis suggests the most immediate investment opportunities in AI may be with established software players who can leverage the technology to deepen their customer relationships and expand their market, rather than with startups aiming for direct disruption.