The Benchmark Way: Five Partners Who Make Other VC Firms Look Outgunned And Overstaffed by Alex Konrad

TL;DR - Benchmark Capital, one of the top VC firms in the world, has a very egalitarian and lean organisational structure unlike many other VC firms.

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Tags - Benchmark Capital, venture capital, VC, top VC firm, startup investing

Questions answered:

  • What are some things that differentiate Benchmark Capital from other VC firms?
  • What is the organisational structure of Benchmark Capital like?
  • How well has Benchmark Capital performed?
  • How do the partners at Benchmark Capital operate?

Summary:

  • Each partner at Benchmark Capital is given an equal voice; there are no junior or senior partners, only partners, and no one plays a CEO-like role and the firm’s winnings are divided equally.
  • Benchmark is decidedly minimalist; there’s only a small staff to support the partners.
    • Has performed extremely well.
      • Examples of its successful investments: Dropbox, eBay, Instagram, Yelp, Zillow, Twitter, Snap, Uber
    • Over the past decade, its eight funds have paid out $22.6 billion to investors; its backers received an approximately 1000% - which beats out most billion-dollar funds raised larger firms
    • Its small size forced Benchmark to be “scrappy, hungry, and fast”.
  • Benchmark focuses on a company’s first or second institutional rounds of funding and likes to take the biggest stake of any outside investor and a board seat (to include the direction of its portfolio companies)
  • For competitive deals, its partners often operate as a pack; each has a different role and brings his own experience to the partnership .
  • It has avoided the generational struggles that have hobbled many firms; all the founding partners made way for fresh, new talents.

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