By Titik Puspa 
Devin Parekh, a driving force behind the venerable investment firm Insight Partners for over a quarter-century, offers a rare glimpse into the strategies and philosophies that have propelled his firm to the upper echelons of venture capital. While many in the VC sphere actively cultivate public personas through social media and podcast appearances, Parekh and Insight Partners have consistently opted for a more understated approach, allowing their impressive track record to speak for itself. In a candid sit-down at TechCrunch’s StrictlyVC event in New York, Parekh delved into the firm’s significant wins, including leading numerous funding rounds for data analytics giant Databricks and holding stakes in pivotal AI companies like OpenAI and Anthropic. He also candidly discussed deals they’ve missed, such as the buzzy AI legal-tech startup Legora, the complex landscape of conflicts of interest in venture investing, and the rationale behind Insight’s enduring commitment to a diversified investment strategy, even as the industry has witnessed a frenzy of investment into frontier AI labs.
Addressing the burgeoning concerns surrounding artificial intelligence risk, exemplified by the recent widely publicized departure of a researcher from Anthropic, Parekh acknowledged the potential for misuse but firmly positioned the opportunities as vastly outweighing the threats. "Sure, there’s a risk some non-state actor gets access to an open-source model and creates a biological weapon," he stated, "But there’s an even higher probability we get a massive decrease in the time it takes to develop new drugs and cure diseases. I’ll take that bet." He drew a parallel to the development of new technologies throughout history, noting that each era brings its own set of risks, yet humanity has consistently adapted and improved living standards. Parekh underscored the indispensable role AI will play in addressing the escalating demands on healthcare. "We’re going to need AI to scale healthcare – the population is aging and there aren’t enough medical professionals to go around," he emphasized, citing his board position at NYU Langone where AI is already revolutionizing the analysis of patient data, enabling earlier and more accurate disease detection.
With a formidable $90 billion in assets under management, Insight Partners maintains a notably quieter public profile compared to firms of similar stature. Parekh attributed this to a deliberate strategy. "Every venture capitalist thinks they’re an expert on everything now – epidemiology during COVID, geopolitics during the Iran war," he quipped. "I’m not sure we’re all experts on everything. Our attitude has been: Let the portfolio do the talking. We’re investing in founders and companies. We have to communicate enough that people know who we are, but our performance should speak for itself – and that’s driven by the portfolio, not by us being loud." This philosophy reflects a deep-seated belief in the power of fundamental business success to generate recognition and trust.
Insight Partners employs a multifaceted investment approach, encompassing early-stage ventures, growth-stage companies, buyouts, and secondary market transactions. Parekh clarified that the firm’s allocation across these strategies is fluid and dictated by market conditions rather than rigid quotas. "It’s temporal, not fixed – we invest globally, so there’s no set geographic or strategy allocation," he explained. "Look at our last seven funds and you’d see different percentages of early-stage, growth, and buyout in each." He observed that buyout opportunities are currently less attractive due to high interest rates and a challenging debt market for software companies, coupled with compressed exit multiples. "Buyouts aren’t great right now – rates are high, debt markets aren’t receptive to software, exit multiples have come down. We haven’t done a major buyout since 2024."
On the venture capital front, Parekh expressed caution regarding the current valuation landscape, drawing parallels to the unsustainable surge seen in 2021. "Valuations are rising at a pace we saw before, in 2021 – and that didn’t end well," he warned. He elaborated on the disconnect between increased valuations and reduced risk, noting that typically, follow-on rounds provide more data, justifying higher prices. However, the current rapid pace of funding rounds leaves little room for incremental data acquisition, leading to higher valuations without commensurate risk reduction. Insight’s strategic response has been to lean into earlier-stage investments. "The logical response is to go earlier," he stated. "With a scale fund, you can make smaller bets – write a $20-$25 million check instead of $500 million – and double down on the winners. That’s where our returns have disproportionately come from." He cited Wiz, a cybersecurity company, as a prime example, where Insight’s early and sustained investment led to significantly amplified returns compared to a single, larger investment. "With Wiz, we wrote a Series A and kept writing checks, so our gain was much larger than if we’d stopped at the first check. And if Wiz hadn’t worked out, it would have barely dented a fund our size."
As a global investor, Parekh acknowledged that while talent has become more geographically dispersed, certain sectors exhibit distinct concentrations. He recalled a competitive bid for Legora, an AI legal-tech company based in Stockholm, where a partner flew to pitch the founder, ultimately losing the deal to General Catalyst. "We competed for Legora – my partner Jeff Horing flew to [Stockholm] to pitch the company, because that’s where the founder was. We lost that one to General Catalyst." However, he noted that AI infrastructure talent remains heavily concentrated in San Francisco, citing his own son, a venture capitalist, who is relocating there due to the perceived necessity of being physically present to invest effectively in the AI space. Conversely, talent for sectors like financial services, exemplified by Ramp, is concentrated in New York, making vertical AI investing potentially more geographically diverse than pure AI infrastructure plays.
Regarding the loss of Legora, Parekh offered a philosophical perspective. "I don’t know the specific reason, but I think they sold their value proposition better than we sold ours that time," he admitted. "There are plenty of examples where it went the other way. It’s a big world; we don’t need to win every deal." This pragmatic outlook underscores the competitive nature of venture capital and the importance of effective founder engagement.
Insight Partners’ investment in both OpenAI and its competitor Anthropic, a practice once considered taboo in venture capital, did not elicit significant internal turmoil. The firm’s primary debate centered on whether they should have participated in earlier funding rounds. "The internal debate was more about whether we should have gotten into earlier rounds," Parekh explained. He differentiated between early-stage investments, where active board participation and governance are involved, and later-stage investments, which are viewed more akin to acquiring a valuable stock position. "It’s very stage-dependent. Khosla did OpenAI’s Series A, and there’s no way they could have then invested in Anthropic, and if we’d done Anthropic’s Series A, we likely couldn’t have done OpenAI either. Once you’re at a later stage, off the board, not driving governance, you’re just buying a great stock." Insight initially perceived OpenAI as the dominant consumer play and Anthropic as possessing a clear enterprise strategy, though he acknowledged these distinctions are fluid. As both companies have required substantial capital raises, exclusivity has become less feasible. "As these companies needed to raise $30-$100 billion, they stopped being able to dictate exclusivity." He also clarified that at earlier stages (Series A/B), information-sharing restrictions are in place, and directly competing companies are avoided, though some founders are sensitive to even minimal revenue overlap.
Parekh expressed a cautious stance on "physical AI" or robotics, viewing current ventures as largely "science projects." While acknowledging their potential to evolve into viable businesses, he highlighted the inherent layered risk: betting on the timing and eventual widespread adoption of robotics. "Physical intelligence companies are still largely science projects. It’s not that they won’t become real businesses, but you’re making a bet on when robotics adoption happens, layered on top of a bet on whether it happens at all." He mentioned his son’s enthusiasm for the space, contrasting it with his own measured approach. "My son thinks it’s the hottest space around and that I’m crazy to ignore it, which is exactly what I’d expect from a 23-year-old."
Regarding the concentration of venture capital dollars in leading AI firms like OpenAI and Anthropic, which accounted for roughly half of all VC funding in the first half of the year, Parekh stated that it’s not an issue for Insight due to their diversified approach. However, he acknowledged the trend’s implications for limited partners (LPs) and other funds. "We’re not overly concentrated, so it’s not an issue for us. But I’m an LP in other funds, and I know two funds right now – raising their entire fund in a month – whose pitch is literally ’35-40% of this fund is going into one of those two companies.’" He reiterated that while these companies may perform exceptionally well, long-term success in venture capital has historically favored diversification. "This business has always rewarded diversification over a long horizon. We’re on fund 13, so we have to think in terms of ten funds, not one." He conceded that in the short term, such concentration might boost returns, but the data over time does not support excessive concentration.
Parekh sees secondaries as an attractive liquidity mechanism, particularly given the substantial capital raised between 2021 and 2023. He emphasized the importance of returning capital to LPs, a factor he believes many first- and second-time funds have neglected. "The bigger issue is a lot of funds raised a lot of money and haven’t returned any of it to LPs. Many first- and second-time funds won’t raise a next fund because they didn’t prioritize liquidity." He advises fund managers to prioritize liquidity, even if it means exiting a position with significant unrealized gains. "I tell fund managers I advise: if Anthropic’s going to triple from here, fine – take your basis out anyway. LPs want to know you can turn positions into cash; that’s the job." Insight Partners has demonstrably prioritized liquidity, returning over $20 billion to LPs through strategic sales and IPOs in the past two years, with more anticipated. "DPI matters, even on fund 13. Secondaries are really a liquidity mechanism, often for early venture investors more than employees."
Echoing the sentiment of venture capitalist Elad Gill, Parekh acknowledges the concept of a "narrow window" for founders to sell their companies at peak valuations. However, he notes that founders, like his own children, don’t always heed his advice. "We’re always having that conversation, though founders listen to me about as much as my kids do." He advocates for strategic de-risking by selling a portion of their stake when offered at a frothy valuation. "It’s case by case, but when a founder gets an offer at a frothy valuation, I ask them what happens when the market corrects, because it will, even if I can’t tell you when. You don’t have to sell everything; de-risk 10 or 20%." He cautioned against the assumption that current rapid valuation increases will continue indefinitely, stating, "Right now valuations are rising so fast people assume the trend continues, but you can’t compound $40 billion at 50% every two months for two years without becoming the world economy. That math doesn’t work."
The impending IPOs of major AI players like Anthropic and OpenAI are poised to reshape the public market landscape. Parekh notes that while the scale of these companies is unprecedented – Anthropic already larger than Salesforce at four years old – their public offerings may not set a direct precedent for every other company. "You’ll have three companies – SpaceX, Anthropic, OpenAI – going public within six to eight months, each north of a trillion dollars in market cap, and the market absorbed SpaceX just fine." The true impact, he suggests, will be on the valuation expectations for the next tier of companies. "If you’re a public-market investor watching something go from zero to $65 billion in four years, ‘double, double, triple, triple’ no longer looks that exciting by comparison." He anticipates more significant IPOs in the coming 18 months, as these companies transition from hyper-growth to more normalized growth trajectories, requiring public market capital.
The influx of LP money returning to the market, Parekh observes, often mirrors personal investment behavior, leading to boom-bust cycles. "We all do this in our personal lives – stay out of an expensive market until we can’t stand it anymore, and pile in right when we should be pulling back." He notes a resurgence of LPs re-entering the market after a period of caution post-2021. This cyclical behavior, he believes, is hard to avoid, evidenced by the proliferation of large venture-growth funds.
Regarding companies with challenging capital structures, Parekh emphasizes a case-by-case assessment and the firm’s rigorous portfolio review process. "It varies enormously." He highlighted Wonderful, an enterprise AI agent platform, as an example of rapid doubling down, securing two rounds and reaching a $5 billion valuation in less than two years. Conversely, some 2021 investments took several years to find product-market fit. Insight’s portfolio reviews, which recently involved assessing 300 companies over three days, aim to identify inflection points for further investment or potential divestment. He cited Armis, a security company, as a testament to their strategic approach. Despite losing the initial deal to Sequoia, Insight maintained the relationship with a modest check. Subsequently, they acquired the entire cap table, including Sequoia, for a nine-figure sum, before selling to ServiceNow for $7 billion. "Sometimes you make money with small checks, sometimes with big ones. The goal is finding the best founders in the best markets."
