Benchmark partners defend small team and measured pace amid venture boom
Benchmark’s five general partners say the firm will keep its small-partnership approach and measured pace of investing despite a frenzied venture market and a larger pool of capital. They described close collaboration with founders and informal partner discussions as central to the firm’s identity, while acknowledging that its funds and mandate have expanded.
Benchmark announced $2 billion across two funds this summer, only the second time in its 31-year history it has raised substantially more than its traditionally smaller vehicles. The core fund, held at $500 million for two decades, has grown to reflect inflation, and a new $1.25 billion growth fund may make four to eight investments, according to Peter Fenton. Partners say they still make just two or three new investments each per year.
- Benchmark plans to maintain its deliberate investing pace.
- The firm raised $2 billion across two funds.
- Its $1.25 billion growth fund may back four to eight companies.
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Benchmark is a US venture capital firm, which invests money in young companies in return for a stake in them. Its five general partners work closely with founders and make investment decisions through informal discussions.
The firm has traditionally raised relatively small funds and invested at a measured pace. It now manages a larger pool of money, including a new fund intended for later-stage investments, while its partners say they continue to make only a few new investments each year.
How much a venture firm raises can affect the size and number of investments it makes, and the kinds of companies it can back. Benchmark’s approach matters to founders and investors interested in how a small partnership operates as its funds and remit grow.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Keeping a small partnership and measured pace can preserve the close collaboration and candid discussion that help founders make difficult decisions. Even with larger funds, limiting the number of investments may let partners devote more attention to each company, while the expanded growth fund gives them room to support successful firms for longer.
The case against
A larger pool of capital and a new growth fund may make it harder to sustain the firm’s traditionally focused approach, even if partners keep their individual investment counts low. In a fast-moving market, a deliberately measured pace could also mean missing promising companies or leaving founders without timely support.
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Originally published by TechCrunch as “No agenda, no rush, no leaving San Francisco: Benchmark’s partners on investing in a frenzied market”.