Jeff Horing - Building Insight Partners - [Invest Like the Best, EP.440]
Episode
91 min
Read time
2 min
Topics
Productivity, Relationships, Investing
AI-Generated Summary
Key Takeaways
- ✓Sourcing Infrastructure: Insight employs 60-80 people systematically calling companies worldwide, starting with undergraduates who make 25+ calls per company. This model generates more deal flow than any competitor, with partners' calendars dictated by 24-year-old analysts who surface opportunities. The firm covers everything through technology-assisted targeting and human persistence, including showing up uninvited at company offices.
- ✓One Fund Economics: A single $12 billion fund deploys across $10 million growth deals to billion-dollar buyouts, enabling risk management through check sizing and double-down bets on winners. Insight converted $5 million positions into $1 billion stakes in companies like Monday and Vno by maintaining relationships and follow-on capacity that separate funds cannot match due to charter constraints.
- ✓Software Valuation Framework: Focus on gross dollar retention and growth rate as primary drivers. Companies with low-80s GDR face filling 20% revenue holes annually at scale, killing unit economics. The firm targets 95%+ GDR businesses unless confident they can fix retention issues. Time-to-value matters critically—SAP's three-year implementation versus OpenAI's instant value fundamentally limits growth velocity.
- ✓Perfect Investment Formula: Five ingredients define ideal deals: big ROI value proposition, large average selling price, fast time-to-value, exceptional CEO, and strong technical team. Wiz exemplifies this by doubling net new bookings annually for six years. Compare your ASP to dominant players—if Epic sells $10 million annually and you sell $500,000, best case market share is one-twentieth of Epic's size.
- ✓Scaling Judgment: Insight solved the scale problem by creating eight investment committee pods where 20-25 year veterans own every deal alongside younger partners. This prevents the mom-and-dad dynamic where senior partners half-listen and young partners get stuck with troubled investments. IC members spend three hours minimum on each team's deals, applying pattern recognition from thousands of pitches to maintain underwriting quality.
What It Covers
Jeff Horing reveals how Insight Partners built a $100 billion software-focused investment firm through systematic sourcing with 60-80 analysts cold-calling companies globally, a contrarian one-fund strategy deploying $12 billion across all stages, and operational support infrastructure that creates competitive advantages in winning deals.
Key Questions Answered
- •Sourcing Infrastructure: Insight employs 60-80 people systematically calling companies worldwide, starting with undergraduates who make 25+ calls per company. This model generates more deal flow than any competitor, with partners' calendars dictated by 24-year-old analysts who surface opportunities. The firm covers everything through technology-assisted targeting and human persistence, including showing up uninvited at company offices.
- •One Fund Economics: A single $12 billion fund deploys across $10 million growth deals to billion-dollar buyouts, enabling risk management through check sizing and double-down bets on winners. Insight converted $5 million positions into $1 billion stakes in companies like Monday and Vno by maintaining relationships and follow-on capacity that separate funds cannot match due to charter constraints.
- •Software Valuation Framework: Focus on gross dollar retention and growth rate as primary drivers. Companies with low-80s GDR face filling 20% revenue holes annually at scale, killing unit economics. The firm targets 95%+ GDR businesses unless confident they can fix retention issues. Time-to-value matters critically—SAP's three-year implementation versus OpenAI's instant value fundamentally limits growth velocity.
- •Perfect Investment Formula: Five ingredients define ideal deals: big ROI value proposition, large average selling price, fast time-to-value, exceptional CEO, and strong technical team. Wiz exemplifies this by doubling net new bookings annually for six years. Compare your ASP to dominant players—if Epic sells $10 million annually and you sell $500,000, best case market share is one-twentieth of Epic's size.
- •Scaling Judgment: Insight solved the scale problem by creating eight investment committee pods where 20-25 year veterans own every deal alongside younger partners. This prevents the mom-and-dad dynamic where senior partners half-listen and young partners get stuck with troubled investments. IC members spend three hours minimum on each team's deals, applying pattern recognition from thousands of pitches to maintain underwriting quality.
Notable Moment
Horing describes rejecting Uber after intense partnership debate, acknowledging it as a huge mistake but accepting that Insight's miss rate in consumer Internet remains too high. The firm deliberately stays within enterprise software competency despite watching massive consumer exits, prioritizing consistent returns over chasing every hot sector where pattern recognition fails.
Episode Transcript
Here's an interesting question to think about. If your finance team suddenly had an extra week every month, what would you have them work on? Most CFOs don't know because their finance teams are grinding it out on lost expense reports, invoice coding, and tracking down receipts until the last possible minute. That's exactly the problem that Ramp set out to solve. Looking at the parts of finance everyone quietly hates and asking why are humans doing any of this? Turns out they don't need to. Ramp's AI handles 85% of expense reviews automatically with 99% accuracy, which means your finance team stops being the department that processes stuff and starts being the team that thinks about stuff. Here's the real shift. Companies using Ramp aren't just saving time, they're reallocating it. While competitors spend two weeks closing their books, you're already planning next quarter. While they're cleaning up spreadsheets, you're thinking about new pricing strategy, new markets, and where the next dollar of ROI comes from. That difference compounds. Go to ramp.com/invest to try Ramp and see how much leverage your team gains when the work you have to do stops getting in the way of the work that you want to do. To me, Ridgeline isn't just a software provider. It's a true partner in innovation. They're redefining what's possible in asset management technology, helping firms scale faster, operate smarter, and stay ahead of the curve. I wanna share a real world example of how they're making a difference. Let me introduce you to Brian. Brian, please introduce yourself and tell us a bit about your role. My name is Brian Strang. I'm the technical operations lead, and I work at Congress Asset Management. How would you describe your experience working with Ridgeline? Ridgeline is a technology partner, not a software vendor, and the people really care. I get sales calls all the time, and I ignore them. Ridgeline sold me very quickly. We went from 7,000,000,000 to 23,000,000,000, and the goal is 50,000,000,000. Ridgeline was the clear front runner to help us scale. In your view, what most distinguishes Ridgeline? They reimagined how this industry should work because obviously they were operating on another level. It's worth reaching out to Ridgeline to see what the unlock can be for your firm. Visit ridgelineapps.com to schedule a demo. One of the hardest parts of investing is seeing what's shifting before everyone else does. AlphaSense is helping investors do exactly that. You may already know AlphaSense as the market intelligence platform trusted by 75% of the world's top hedge funds, providing access to over 500,000,000 premium sources from company filings and broker research to news, trade journals, and over 200,000 expert transcript calls. What you might not know is that they've recently launched something game changing, AI powered channel checks. Channel checks give you a real time expert driven perspective on public companies weeks before they show in earnings or consensus revisions. AlphaSense uses an AI interviewer to run …
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Books, tools, and gear mentioned in this episode
SignalCast may earn commission on purchases via these links.
Tools
“SPONSORS: AlphaSense (https://alpha-sense.com)”
“SPONSORS: Ramp (https://ramp.com/invest)”
“SPONSORS: Ridgeline (https://ridgelineapps.com)”
company
“Insight converted $5 million positions into $1 billion stakes in companies like Monday and Vno by maintaining relationships and follow-on capacity that separate funds cannot match due to charter constraints.”
“Time-to-value matters critically—SAP's three-year implementation versus OpenAI's instant value fundamentally limits growth velocity.”
“Time-to-value matters critically—SAP's three-year implementation versus OpenAI's instant value fundamentally limits growth velocity.”
“Wiz exemplifies this by doubling net new bookings annually for six years.”
“Compare your ASP to dominant players—if Epic sells $10 million annually and you sell $500,000, best case market share is one-twentieth of Epic's size.”
“Horing describes rejecting Uber after intense partnership debate, acknowledging it as a huge mistake but accepting that Insight's miss rate in consumer Internet remains too high.”
“Insight converted $5 million positions into $1 billion stakes in companies like Monday and Vno by maintaining relationships and follow-on capacity that separate funds cannot match due to charter constraints.”
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