Michael B. Gilroy

70% gross margin. 10% gross margin. Same sector, same growth rate, completely different business. Most investors still value companies off a revenue multiple. That habit quietly breaks the moment you leave classic SaaS. @MBGilroy , co-founder of Marathon Management Partners, $400 million across software and fintech. "In fintech, we only use gross profit multiples, because I can be looking at a business that's 70% gross profit or 10%," he told me. "It doesn't mean the 10% gross profit business is any worse, but it does mean they're different. So taking a revenue multiple there makes zero sense." Revenue multiples work when gross margin is roughly constant across a sector, the whole premise behind classic SaaS comps. Fintech blew that assumption up years ago, with margins ranging from negative to 80% depending on the model. Gilroy now applies the same lens to AI software, where the spread is just as wide and most people are still pricing it off top line revenue. The multiple you are using might be pricing the wrong company entirely.

"Every VC says they'll help founders." Almost none are willing to structure their entire firm around proving it. @MBGilroy , Founding Partner of @MarathonMP and former GP at Coatue, built Marathon around one simple idea: "We're not reactive to trends... By saying no, we can pour time into these founders." He calls it "pre-portfolio." Before investing, his team works with founders as if they're already on the board. Customer introductions. Product feedback. Hiring. Real work. The logic is simple. If you only start adding value after wiring the money, you're already too late. The best founders don't choose investors based on promises. They choose them based on demonstrated behavior. That philosophy also explains why Marathon only invests in a handful of companies each year. Focus isn't a branding exercise. It's the product. Anyone can say they're founder-first. Very few are willing to build a business that makes it impossible to be anything else. Thank you @jrichlive for the kind introductions! We’d like to thank @AlphaSenseInc for sponsoring this episode! Full episode below 👇 youtube.com/watch?v=InuUGU…

Every VC in the market is now reading the same customer call transcripts. That is not an edge. That is a commodity. The moment diligence becomes something you read instead of something you do in person, it stops being diligence. @MBGilroy , co-founder of Marathon Management Partners, which runs $400 million across software and fintech. "If all my competitors are reading the same transcript, who cares? What am I going to learn from that that's differentiated from the market?" he told me. "You will know if I'm lying, if my eyes are darting around the room, the classic touching your nose." AI gave every investor the same call notes. It did not give anyone an edge, because an edge that everyone has is not an edge. The firms still doing customer back channels, still getting on Zoom, still watching a founder's eyes when they answer a hard question, are the ones who will actually know something the market does not. The humans who stayed in the room are about to get paid for it.

"Every VC says they'll help founders." Almost none are willing to structure their entire firm around proving it. @MBGilroy , Founding Partner of @MarathonMP and former GP at Coatue, built Marathon around one simple idea: "We're not reactive to trends... By saying no, we can pour time into these founders." He calls it "pre-portfolio." Before investing, his team works with founders as if they're already on the board. Customer introductions. Product feedback. Hiring. Real work. The logic is simple. If you only start adding value after wiring the money, you're already too late. The best founders don't choose investors based on promises. They choose them based on demonstrated behavior. That philosophy also explains why Marathon only invests in a handful of companies each year. Focus isn't a branding exercise. It's the product. Anyone can say they're founder-first. Very few are willing to build a business that makes it impossible to be anything else. Thank you @jrichlive for the kind introductions! We’d like to thank @AlphaSenseInc for sponsoring this episode! Full episode below 👇 youtube.com/watch?v=InuUGU…

My partner @MBGilroy's interview perfectly captures our philosophy at @MarathonMP. One of our core tenets is to prove to founders BEFORE we invest that we will be one of your best SDRs (i.e. help connect you with potential customers) and also one of your best recruiters (i.e. help connect you with potential talent).