Benchmark GP Peter Fenton explains Benchmark's lean partnership structure and rapid decision-making turnaround to Acquired hosts Ben Gilbert and David Rosenthal.
Insight
Fenton: Late-stage investing dilutes venture fund return multiples
“If we start, all we're doing, we're investing more money in late stages. We're lowering our returns. That's all we're doing because our commitment is fixed. It's not like we're going to be more committed. So we're, you could say we're getting more cash on cash…”
Prediction Open · timeframe Oct 2052
Fenton: Benchmark probably won't be around in 30 years
“Benchmark probably isn't going to be around in 30 years.”
Assertion Partly supported
Fenton: Docker's valuation plummeted from $1.5B to zero, stranding Benchmark
“So last time I did an all hands meeting at Docker was three years ago, and there were 60 employees that, that we'd spun out of the prior company, and the valuation was zero. So we'd gone from over a 1,000,000,004, 1,000,005 to zero, and I was working with some…”
Insight
Fenton: A VC's true customer is the founder's purpose, not the founder
“Our customer isn't, it's not the founder. We say it is, but it's really the purpose of the founder, and it turns out that purpose, if that's the customer, One of us may be deviating from that, and we can keep each other accountable, and that happens internally…”
Insight
Fenton: Every 2–3 years a $100B company is founded regardless of cycles
“We have faith that every year, some number above zero companies will be founded that are going to be worth more than ten billion dollars, and then about every two or three years, a company's going to be found out it's going to be worth more than a hundred bill…”
Disclosure
Fenton: Benchmark GPs pay standard LP fees and carry on personal commitments
“As an LP. And that's, well, that's crazy. And this is-... But for this, for the super majority of my investment in benchmark, I'm paying limited partner rates and management fees.”