The sheer number of LPs is a staggering figure for any venture firm, and especially one with a relatively modest $5 billion of assets under management. But Nimay Mehta, Lead Edge’s managing partner, swears by the strategy, even as he gears up to raise the firm’s seventh fund this year, which will entail more than 700 calls. He affectionately referred to the labor-intensive process as “an insane amount of brain damage.” But in the increasingly competitive field of software investing, it’s what sets Lead Edge apart from its peers.
Mehta was a Harvard undergraduate in 2007 when he saw a job listing at an entrepreneurship club for a part-time internship at General Catalyst. He cold-called the person who put up the listing and got the job: an unglamorous position paying about $15 hourly devoted to putting leads in a database, as he recalls. He moved to New York in the fall of 2009, with the financial crisis raging around him, and parlayed his experience at GC into an analyst position at Insight, joining the “dialing for dollars” team, as he put it. “It’s some of the best training you can get in investing,” Mehta told me about cold calling startups. “Your love and appreciation for really great businesses was entirely born out of talking to bad companies.”
“It’s like going to the gym,” he added. “Every single phone call is a rep.”
During his time at Insight, Mehta was introduced by a classmate to a former Bessemer analyst who was starting a venture firm and looking to make his first hire on the investment team. Mehta joined in May 2011, and Lead Edge launched its first fund the next month.
While Lead Edge does still raise around 50% of its capital from institutional investors, 95% of its limited partners by logo are individuals—and that was part of the initial design of the firm. Lead Edge wanted to build its LP base around people who could be helpful to its portfolio companies. “It was really a function of just my sourcing experience and having spoken to so many founders and CEOs myself,” Mehta told me.
The number also ballooned over the years, from around 100 LPs in the first fund to 750 today—a who’s who of Fortune 500 executives, entrepreneurs, and advisors to major companies, from the former CEO of Macy’s to the CFO of Workday. “Building a firm like ours is like trying to get a satellite into orbit,” Mehta says. “Objects in orbit stay in orbit, but getting them to orbit is really, really hard to do.”
He points to Lead Edge’s growth investment in the tax software company SafeSend in 2021 as an example of the strategy’s success. After the firm acquired a 65% stake in the platform, Lead Edge asked its LPs to demo the software to their accountants, which resulted in millions of revenue. Lead Edge sold the business to Thomson Reuters for $600 million earlier this year. Other notable exits for the firm include Asana and Uber.
The bigger question for the firm, especially with its Insight and Bessemer DNA, is size. Lead Edge is a fraction of the size of its progenitors, with around 80 people on its team. Still, it is trending in their direction, with the goal of raising an even larger fund than Lead Edge’s sixth, which totaled nearly $2 billion. When I asked Mehta whether his goal is to reach Insight’s scale, he gave a diplomatic answer: “My ambition is great returns.”
Though Mehta insisted that Lead Edge doesn’t have a master plan, the firm’s army of backers is only growing, especially as its portfolio executives have successful outcomes and join the LP base—70 in total. “That’s the flywheel,” he says.
