Benchmark

“If you look at auditing as an industry, you end up with issues like Enron, where if you have the same group who's responsible for doing the audit, as well as also consulting and supporting the company, you have a mixed incentive structure, and then it just bec…”

“Consensus status as well in the B to B world, because town, which is kind of the B to B enterprise alternative has also been funded to the tune of a billion dollar price by index. And I think it was benchmark who co led that round.”

“You definitely shouldn't raise from benchmark capital.”

“Benchmark was running a war room. They were an unspoken activist investor that was creating a once a week crisis.”

“Recently, relatively recently, in the last few years because outcomes have gotten so much bigger and these markets are bigger and everything else, The circle of high cash on cash multiple opportunities is bigger than just early stage. And it's not so, so big t…”

“You could argue we're a few years late, and I think I'd take that criticism. I think that but I think that opportunity exists for, on a go-forward basis and so, like, we should go do it.”

“Take the Cerebrus example as a good one, which is, like, we took it public this time in May, but, like, we tried to take it public in twenty-twenty-four, and it would have been taken public at a much, much lower valuation, and like, you know, it would have bee…”

“Each of us invests in one to two companies a year. I think in my 12 years, I've invested in 18 companies total. Crazy. Which is a relatively small number So it's very high conviction and very high commitment.”

“Will the CSPs do well? Yes. Yes. Will some of these neoclouds do well? Yes. Will the fireworks of the world do well? Yes. Will NVIDIA do well? Yes. Will these, like, chip startups do well? Or, you know, some set of them? Yes. Like, Are we gonna have edge infer…”

“There's so much zero-sum thinking, which is just like, okay, how do we cut up this pie, and they're gonna eat this much, and like, oh, no, no, no, no, no, Anthropic or whomever is gonna eat, 98% of the value, and they're gonna do all the drug discovery, and I …”

“There's our friends at Benchmark, they funded StarCloud, and I don't know, last time StarCloud is an orbital compute company that, like, SpaceX is kind of partnering with they're gonna, I think, let them use the Starlink laser technology, which is really impor…”

“Uber made benchmark roughly 640 X versus around 25 X with WeWork.”

“This is one of these things we manufacture, like how wonderful it is. Benchmark has a flat partnership. I mean, who cares, right? It's not disciplined. It's optimized to make the most money.”

“The thing that's changed massively in the new AI paradigm is that you can have businesses that are well over a billion dollars in revenue that haven't proven out their unit economics. They haven't proven out, you know, durable product differentiation. In many …”

“We were talking with developers and companies in our portfolio, and they're like, yeah, like, you know, we have developers that are spending, you know, 3000 dollars per month themselves, like each on cloud code. So it's like, wow, okay, so that's 36,000 dollar…”

“Because these markets are so big in AI and elsewhere and because these companies are staying private for much longer, you actually have these situations where a late stage company can have much higher upside than like a series C which is super weird.”

“But I think a lot of these firms, they have just become alternative asset managers. And like, that is what they are. And they have venture products, but they are not venture capital firms. And that's, that, that's not me being like, oh, they're not VC firms be…”

“When Chathan invested in star cloud, it was like weeks, like we closed the investment weeks before Elon started like, you know, professing his love and bullishness on overall data center.”

“They were the only company that had a GPU in space, so there was already some things that, that we saw in attraction, but it was based on the people.”

“I remember Peter Fenton was actually on his phone most of it. And I was like, kind of bummed out because I was like, damn, he's not interested. He's focusing on other things. He's doing emails. And I remember as soon as we finished the pitch, the first thing h…”

“I think it was close, but not exactly the highest.”

“I think Benchmark doesn't really have as many resources. Like these multistage funds have so many resources for founders.”

“There's a partner here at Benchmark that says any liquidity for pre-AI SaaS companies is top decile performance. Any liquidity at all.”

“No, it fucking sucks. It's terrible. It's a complete and utter failure on, on our part. And I think we, we'd all say that.”

“Very good set of data that doesn't a legal task from end to end, and we're missing this in most articles other than coding. Basically, coding is the only one that has like a good saturated benchmark.”

“I think the folks that hate benchmark from Uber, I think they deserve to hate benchmark.”

“The second one is, it really encourages development of the new people that come in, because I'm gonna take an equal part of their success when they start delivering, and so I'm not, I want them to be super successful, and I'm gonna spend time, and I, boy, on m…”

“Ah, you just, because you see, Harry, you just listen to Twitter, but if you go and you actually look up the S-one, they have eight or nine percent ownership, right? Because I do these things, because every VC reads an S-one the same way, you read the front pa…”

“Benchmark is gonna be absolutely cleaning up. They still own over 20% of Cerebrus, apparently.”

“Like, cross-border investing wasn't back. There was no window. Like, not at all.”

“This investment was extremely risky, like at the time. Like it was a Hail Mary and now it fully missed.”

“One of the benchmark partners sent out this memo about, like, you know, it was basically a wake-up call to all of the portfolio companies to, like, you know, get with the program and, like, really radically rethink how you operate your business, like, immediat…”

“And it went from something where LinkedIn was going to be the kind of major investor to being, you know, a smaller part of the round. And it went from kind of a seed investment to a series A through the course of that fundraising process. But yeah, it was, you…”

“His take, which I totally agree with is it's hard to, if Travis had stayed in the role, It's hard to imagine Uber being worth less than something like a trillion dollars today.”

“On that exact date, Benchmark's equal GP roster was Bill Gurley, Eric Vistria, Matt Kohler, Mitch Lasky, Peter Fenton, Sarah Tavel. Today, the partnership has changed dramatically. The only two that remain are Peter and Eric. And you have Chetan, Ev Randall, a…”

“I would argue like they are probably less likely to go against the founder given, given how this entire situation has played out.”

“Every partner at benchmark, it's an equal partnership. So every partner was going to make a clean one billion dollars. They were all going to be billionaires from this one deal.”

“Even in V work benchmark made money. Genchmark made money at WeWork because they invested early enough.”

“I truly think that's why Sequoia and Benchmark are great and Index are great because they help founders and entrepreneurs recruit amazing talent and people want to work for those funds portfolio companies.”

“The winners are so big at that level, you could have 80% of your portfolio fail. So it's a game that's a lot riskier, and you're searching for the really big outcomes.”

“Benchmark's never done a real estate transaction in the history of the firm, and We're about 30 minutes into the presentation. This is series eight, right? So there's almost nothing there. And I knew we were going to do the deal, like without even talking to t…”

“I think it was a clever move by a very shrewd firm. I think it's been their MO for 1520 years, which is we have a very compelling offering to make to NEGP. We'll make you broadly, we'll make you equal in a very successful partnership with a lot of autonomy. An…”

“He said when he first met him in a series A, so the company basically had nothing in existence. His company benchmark had never done a real estate transaction. That's what this guy was asking him to do. But he goes, within the first few minutes, I knew I was g…”

“It's harder to be someone like Benchmark, small and brilliant, and manage generational transition, which is why it's awesome that they do it, because the asset is the brains of four or five individual people.”

“The round, there was another firm that wanted to preempt us for the A round, and they gave a very competitive term sheet for this series, for the series seed. Much higher price than Benchmark. Benchmark was, I think, the lowest price out of any seed fund.”

“It's the same in investing. Like, there should not be a world in which every ambitious stock picker can beat the market. Of course, whenever you hear the statistics about 95% of mutual funds underperform their benchmark, I'm like, yeah, what would you expect?”

“I don't think Robbie or Hamant, or even Ben and Mark at this point, I don't think that they can go to LPs, one of those legs of the stool, and say, hey, this basket of funds that we're making you invest party pursue across, we're gonna get you five X net on th…”

“This is one of the reasons why I'm extremely excited about benchmark competitive position in today's market, because we can go to LPs, we can say, hey, we're shooting for higher than five X net. We have the historical track record to back it up, and we have th…”

“If you look at their twenty-twenty fund, they have Mercore, they have Fireworks. What's the other one? They have a bunch of, like, multi-ten baggers at this point in that fund, so they're feeling pretty good about going to LPs and saying, look, we still got it…”

“AI app companies are meaningfully different than SAS companies in like a dozen different ways. Yet we keep trying to shove all the metrics From these AI app companies into the frameworks that we created for SAS.”

“And it's such a better intellectual exercise than trying to compare it to SAS, which is just a very, very different business. And it has a very different pricing and business model that, that isn't going to be as relevant, I think over the next 10 years.”

“I definitely disagree with that. I think the moat is still fundamentally in technology, not in, in distribution.”

“Out of our last fund, our five best investments in that last fund today held at LRP last round price are about a 60 X. We have two 30 X's and we have two 20 X's. Since ChatGPT was released, there isn't an open AI round that touches That return multiple and tha…”

“The outcomes are much, much, much larger in today's in today's technology landscape than they were 10 years ago, 15 years ago, there's more bites at, you know, potential hundred billion dollar, trillion dollar companies.”

“I think sometimes people confuse the inputs for the outputs at benchmark where it's like, oh, like they have to have 20% ownership and they only want to invest at a hundred posts. All these things. And I think that's, that couldn't be further from the truth. W…”

“Like each of us is 25% of benchmark, and we work really well together, and we're a super tight-knit team, but each of us has our own styles.”

“This is one of the reasons why I'm extremely excited about benchmarks, competitive position in today's market, because we can go to LPs. We can say, Hey, we're shooting for higher than five X net. We have the historical track record to back it up. And we have …”

“There's going to be nothing better for you than if your first investment sucks. Because once you do one and it fails and you realize it's not the end of the world and like life goes on and like LP still love us and like you're not fired, then you feel really c…”

“We're like, let's constrain our fund sizes. Let's be careful about what we do. So we don't get too over our skis, where we can easily weather a crash, and LPs aren't going to go fleeing once there's a crash, because we've been very careful with our capital, an…”

“And so, if you have an opinion about how AI should work, what's the best way to get other people to work on it? And that's by launching a benchmark.”