Benchmark’s Peter Fenton, Eric Vishria, Sarah Tavel, Chetan Puttagunta and Victor Lazarte will all function equal partners in the brand new fund.
Forbes illustration, portrait photos courtesy of Benchmark
Venture capital firm Benchmark is raising $425 million for its eleventh fund, Benchmark 1, in keeping with a letter to limited partners sent Forbesfor a brand new “technological age”.
Venture capital firm Benchmark is raising $425 million for its eleventh fund amid a man-made intelligence boom, in keeping with an investor letter obtained ForbesBenchmark plans to make around 30 early-stage investments from the fund, which has not yet been closed.
“We are at the beginning of a technological era that makes everything that has come before seem like a prelude,” Benchmark partners wrote within the letter sent in mid-June to limited partners invited to speculate within the fund, a source accustomed to the offering said. Forbes“We are a handful of equal partners with the hunger and ambition to build something great.”
Benchmark’s five partners within the fund – “equal” within the sense that they share gains and profits equally, no matter length of service – include Midas Listers Peter Fenton, Eric Vishria and Chetan Puttagunta, in addition to Sarah Tavel and Victor Lazarte.
Benchmark declined to comment through a spokesman.
The firm is maintaining the identical fund size to “enforce discipline and responsibility and focus on what matters,” the partners wrote within the letter, “to provide the best possible service to its founders and LPs.”
Benchmark has been launching funds of the identical size since not less than 2013, when it launched its Fund VIII, although the pace of investing those funds has fluctuated. Its ninth fund was launched in 2018, five years later, and its most up-to-date, Fund X, was launched two years after that in 2020, Reuters reports. reported at the moment. Benchmark accomplished investments from this fund “recently,” in keeping with the letter, meaning the investment lasted about 4 years.
The recent fund might be called “Benchmark 1” and is an element of a reboot for the era of generative AI, the letter added. All of the firm’s partners are expected to have a look at AI firms of their typical focus areas, reminiscent of consumer technology, cloud computing or crypto, said a source with knowledge of the firm’s pondering. Retrieved 2018-08-18.
Benchmark has already made a variety of AI investments, including Sierra, the AI agent startup led by former Salesforce co-CEO Bret Taylor; the automated employee startup 11x, in keeping with a Business Insider report; the AI board manufacturer Quilter; the legal software manufacturer Leya; and the video generator HeyGen, by which Lazarte recently led a round of $60 million.
And while the firm is not expected to write down many checks that big, Benchmark could have barely more capital available than Benchmark 1’s official figure, in keeping with the source. The token $425 million figure doesn’t include the numerous amount of capital the firm’s partners are putting into the funds, the person said. Taking those partner commitments under consideration, Benchmark will effectively have greater than $500 million available.
Benchmark is thought for its early investments in firms reminiscent of Uber and Twitter and has long set itself aside from Silicon Valley rivals with its tailored approach, which has raised billions of dollars in funding and significantly expanded its investment teams. As reported in a Forbes profile In 2015, The Benchmark Way foregoes such growth and as an alternative relies on a small, close partnership of 4 to 6 investors who don’t write checks often.
The model is expensive: Any investor Benchmark hires, even in the course of a fund cycle, gets an overnight cut of the firm’s sizable profit share on the expense of its other partners. But it has also proven extremely lucrative when it really works. Benchmark’s partners back only one or two firms a yr and typically take 20% or more of a startup’s equity, in addition to a seat on the board. For an organization like ride-sharing app Uber, that meant an initial investment of little greater than $10 million become nearly $7 billion on the 2019 IPO.
“We do not believe there is another company that will execute our strategy,” Benchmark partners claimed within the letter.
This model has also inspired Benchmark to be more thoughtful in its generational planning. Of the five partners mentioned on this 2015 report, Forbes Profil, Fenton and Vishria remain. Former Midas List investors Matt Cohler and Mitch Lasky stepped down in 2018, while Bill Gurley, one other long-time list constituent and the firm’s lead Uber investor, stopped investing within the firm in 2020. Tavel joined in 2017 and Puttagunta the next yr. The firm’s most up-to-date partner was Brazilian gaming entrepreneur Lazarte, who joined in 2023.
They were to be joined by investor Miles Grimshaw, who got here from Josh Kushner’s Thrive Capital in 2020. But in March returned to Thrive, largely because he wanted more flexibility to speculate across different stages and check sizes than was possible inside Benchmark’s rigid portfolio structure, in keeping with three industry sources. Grimshaw didn’t reply to a request for comment.
One query stays for Benchmark, Fenton, who has pushed investments reminiscent of Twitter and Yelp and, more recently, Taylor’s controversial Sierra AI. If Fenton, 51, were to retire, the sustainability of the partnership with Benchmark would face a greater challenge, industry colleagues said. However, the letter didn’t mention that Benchmark 1 might be Fenton, 51,’s last project; he could move on to 1 or more other funds afterward, a source accustomed to the project said.
Other former partners, including Cohler and Gurley, have remained involved with the corporate through board seats and as advisers, the person added.
