Lightspeed's Michael Mignano: "ARR is fake"

So is that the primary moat you look for? Like, how are you evaluating these companies?

So one of the things that I take a little bit of an issue with right now in venture is there's so much of a focus on this ARR number, which—

Oh my God, it's fake. Yeah.

And it's not even defined properly half the time, right? Like you might just take some of, some of these companies are literally just taking like yesterday's subscription rate and like multiplying it by 365, whatever. I think it doesn't say anything about the durability or the quality of the revenue. One of my partners says this thing that there's like high caloric revenue and low caloric revenue, and it's like you want, you want the healthy revenue, right? So I think a lot of rounds are getting done right now based on this revenue. But what I'm really looking at and what all my partners are really looking at is the same stuff we've always looked at, which is retention. You know, how sticky is the product? How often are people coming back? In addition to retention, is it growing organically? Is it growing word of mouth, or have they just figured out a way to go viral on TikTok a few times? Because if you do that, if you can figure out how to go viral on TikTok and you have a very well-optimized conversion funnel, you can quickly run up your revenue rate. Like it's, it's actually like not that hard. That's how good TikTok is, but it doesn't really say anything about the durability or the quality of the product or business. And so For me, it all comes back to the fundamentals. Is the product retaining users? Is it growing organically?