While the funding size of many venture capital firms has ballooned into the billions of dollars over the past decade, Benchmark Partners, one of Silicon Valley's most successful investors, has raised approximately $425 million every few years. We have focused on raising funds for
That's what the prestigious firm said in a letter to its limited partners when it announced its latest fund this summer, according to the Information. However, Benchmark's partners do not place limits on the capital commitments they make to major investment funds. The company has now raised an additional $170 million for a fund called Benchmark Partners Founders' Fund I, according to two regulatory filings.
Benchmark isn't quietly asking its LPs to put more money into new strategies. TechCrunch understands that the $170 million is expected to come primarily from the company's past and present partners, with their friends and family potentially also able to participate. This is nothing new, according to people familiar with the fund. Partner-only funds have been a strategy from the beginning.
While it is not uncommon, and often a requirement, for partners to contribute personal funds to the main fund along with the LP, it is not uncommon for a firm to have a large separate fund comprised almost entirely of partners' own funds. Even rarer.
But Benchmark is no ordinary VC firm. The company has been an early investor in companies like eBay, Snap Uber, Twitter, and Uber, and has returned billions of dollars to backers over the years, increasing its original funding 10x, according to reports from Forbes and Information. It is said that this happened sometimes. .
So there's good reason why partners would want to double down on their investment. Using a separate fund allows you to do this in a way that does not involve managing limited partner funds. They're not the only VCs who think that way. Homebrew, the VC firm founded by Satya Patel (known for his work at Twitter, Battery Ventures, Google) and Hunter Walk (YouTube, Google), will completely stop accepting funding from limited partners in 2022. Homebrew's main funding is now their own money. Sequoia's separate asset management company, Sequoia Heritage, is well known for receiving seeds of $150 million each from partners Michael Moritz and Doug Leone, but it also receives 20 million dollars from outside investors. Accepted $50 million.
Benchmark has always operated differently than large VC firms. For example, this is an equal partnership firm, meaning each partner shares an equal share of the firm's management fees and profits. The company invests primarily in Series A stage companies with a stake of around 20%, and is so popular that its website is little more than a landing page.