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No agenda, no rush, no leaving San Francisco: Benchmark’s partners on investing in a frenzied market
Policy2 min read
Benchmark, a Silicon Valley venture capital firm, shared at TechCrunch Disrupt how it is staying calm and careful while many rivals rush to invest. Its five partners said the firm will keep its slow, close-knit way of working.
A slow and steady firm in a fast market
Benchmark is a venture capital firm. Venture capital firms give money to new startups in return for a share of the company. This summer, Benchmark announced $2 billion across two funds. That is a big change for a firm that usually raises a much smaller fund. At TechCrunch Disrupt, its five general partners said they are not speeding up. They still invest in only two or three new companies per partner each year. Their Monday meetings still have no set agenda.
Key numbers and facts
- Benchmark is 31 years old.
- This summer, it announced $2 billion across two funds. It is only the second time in its history it has raised a much larger fund than usual.
- The core early-stage fund was held at $500 million for 20 years before being increased.
- The new growth fund is $1.25 billion.
- Partners plan to make about 4 to 8 bets from the growth fund, so a few wins can earn most of the money.
Why the change happened
Benchmark has always worked closely with founders at the very start of their companies. This takes a long time, often 10 to 15 years, and it is hard to do with many more companies. The firm also let its core fund stay the same size for two decades while costs rose. Partner Peter Fenton called this a probably tactical error. The new growth fund lets Benchmark invest in later-stage companies too, which it could not do before.
Why it matters
Many investors are racing to put money into artificial intelligence and other hot areas. Benchmark is choosing a different path: fewer bets, closer teamwork, and a calm pace. Its partners also say that many warning signs about the economy are overblown. If their approach works, it may show that patience can still win in a fast and frenzied market.
What to watch
- Whether Benchmark keeps to two or three new bets per partner each year.
- How the $1.25 billion growth fund performs and whether a few big winners drive most of the returns.
- How the firm's new partners, such as Ev Randall and Jack Altman, fit into its team.
Glossary
- Benchmark
- A venture capital firm that invests money in young startups in exchange for a share of each company.
- venture capital
- Money given by investors to new, fast-growing startups, often in return for part ownership.
- growth fund
- A pot of investor money used to back companies that are already past the earliest stage.
- core fund
- Benchmark's main early-stage fund, used to invest at the very beginning of startups.
- TechCrunch Disrupt
- A large tech conference where startup leaders and investors speak and share news.