Invest Like the Best• Mar 24, 2026• 1:00:38Interview

Why Now is the Best Time to Buy Public Software Companies

From Invest Like the Best

Mitchell Green•Founder, Lead Edge Capital

Executive Summary

Lead Edge Capital operates like a 'machine', using a disciplined, process-driven approach to growth equity investing, heavily influenced by firms like Bessemer and Insight.
The firm's primary strategic asset is its unique Limited Partner (LP) base of ~800 world-class executives, who are actively leveraged for sourcing, diligence, and portfolio company support.
Lead Edge utilizes a strict eight-point investment framework (the 'Lead Edge 8') to filter opportunities, focusing on metrics like >$10M revenue, >25% growth, >70% gross margins, and high capital efficiency.
Founder Mitchell Green is currently bullish on public software, believing it offers the best risk-adjusted returns, while being bearish on the AI infrastructure build-out, which he views as a bubble.

12 quotes

Concerns Raised

The current AI capital expenditure cycle is a bubble poised to end badly.
Venture growth funds from the 2020-2021 vintage are likely to underperform significantly.
Over-leveraged, private equity-owned software companies are vulnerable to disruption.

Opportunities Identified

Publicly traded software companies offer the best risk-adjusted returns in the current market.
Creative deal structures, particularly secondaries, are a booming area due to the market's need for liquidity.
Incumbent software companies with strong distribution networks have a defensible competitive advantage.

Key Themes

The Investment 'Machine'

Lead Edge Capital is built around a highly systematic and repeatable process for sourcing and evaluating companies. This includes a large team of junior analysts making thousands of cold calls annually and filtering opportunities through a strict quantitative framework, the 'Lead Edge 8'. The goal is to remove emotion and subjectivity, focusing on consistent 'singles and doubles' rather than chasing home runs.

This process-driven approach is designed for scalability and consistency across market cycles and personnel changes, aiming to deliver reliable 2x-2.25x net MOIC fund returns.

LP Network as a Strategic Asset

Approximately 95% of the firm's capital comes from a proprietary network of around 800 executives and entrepreneurs. This network is not just a source of capital but a core part of the investment engine, used for sourcing introductions, conducting expert diligence, and providing post-investment support and customer connections for portfolio companies.

This creates a powerful, self-reinforcing ecosystem that provides a significant competitive advantage in sourcing, winning, and accelerating the growth of deals.

Disciplined Framework, Creative Execution

While the firm uses a rigid set of criteria to identify high-quality businesses, it is highly flexible and creative in how it deploys capital. Approximately 70% of their investments are through non-traditional structures like secondaries, special situations, and buying out LP stakes in older funds. This allows them to find attractive entry points and provide liquidity solutions in various market conditions.

This dual approach of a strict filter and flexible execution enables the firm to access high-quality assets at potentially better valuations than in competitive primary rounds.

Contrarian View on AI and Public Markets

Mitchell Green expresses a strong contrarian view on the current AI landscape, calling the capital expenditure cycle a 'bubble' and predicting the eventual commoditization of AI models. Conversely, he believes the best risk-adjusted returns are currently found in publicly traded software companies, which are often overlooked by growth investors but meet many of their core criteria.

This perspective guides their capital allocation away from hyped sectors and towards areas they believe are undervalued, highlighting a value-oriented discipline even within growth investing.

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Topics

Lead Edge Capital Venture Capital Growth Equity Investment Framework Lead Edge 8 Limited Partners (LPs)LP Relations Sourcing Strategy Cold Calling Due Diligence Software Investing SaaS Metrics Public Markets Secondary Markets Special Situations Capital Efficiency AI Bubble Return on Investment (ROI)MOIC

Processed Apr 3, 2026 yt-dlp + mlx-whisper + Gemini