// TECHCRUNCH — FINANZA
No agenda, no rush, no leaving San Francisco: Benchmark’s partners on investing in a frenzied market
The players sometimes change. I sat down with four of Benchmark’s partners three years ago, and three of those individuals are no longer with the firm. The capital commitments have changed, too. This summer, Benchmark announced $2 billion across two funds, marking only the second time in its 31-year history that it has veered from raising a far smaller vehicle.
But at this week’s TechCrunch Disrupt, the venture firm’s five partners convincingly portrayed a close-knit team that’s not about to put the pedal to the metal, even as many of their rivals do exactly that. The world may be speeding up, but they’re investing at the pace Benchmark always has: just two or three new bets per year per partner. The world is drowning in information, yet their Monday partner meetings still have no agenda. And while economic indicators point to trouble ahead, they don’t seem too bothered, seeing many of the warning signs as products of X-fueled hysteria.
Here’s what Benchmark’s five general partners — gathered together on our stage — had to say at the show. Some of the comments below have been edited for length and clarity; you can watch the full interview at the end of the article.
Benchmark has evolved in some ways, including a bigger core fund and a new growth fund. How do you think about adapting without losing what makes you Benchmark?
Peter Fenton: The craft that hasn’t changed is the core fund: working closely with founders at the beginning. It’s usually a 10-to-15-year commitment, [working] shoulder to shoulder, and that doesn’t scale. There’s also been inflation. We held the core fund at $500 million for 20 years, and it has just inflated to be consistent with the existing economy, which we hadn’t done and that was probably a tactical error on our part.
[As for the growth fund] it’s an expansion of our mandate. In some ways, we get permission from the ecosystem to do more than just the core early-stage business. [Not having this previously] was a fork in our eye. A number of opportunities that came to Benchmark would have returned somewhere between 10 and 1,000x to Benchmark, and we were constricted by our early-stage focus.
Are you thinking to make handful of bets with that $1.25 billion growth fund?
Fenton: We all have different answers, which is the beauty of a partnership. I’d love for us to have, as that great J.P. Morgan paper puts it, the agony and ecstasy of a concentrated portfolio. If the fund is successful, one or two investments will generate 90% of the returns. So I think it’s four to six, maybe seven to eight.
Ev, you’ve worked at Founders Fund, Bond, and Kleiner Perkins. How does Benchmark differ?
Ev Randall: Every firm is ultimately a collection of the people within the firm and how they work together. Some are very hierarchical, with a 50- or 60-person investment team and investment processes are federated into product groups. And then you have small partnerships. Very early in my career, I was drawn early to small partnerships because they allow a higher level of throughput and fidelity in your conversations, where you don’t feel like you’re making decisions through some Byzantine corporate structure. You’re going out on the field together, like a sports team going out on the field together.