From: acquiredfm
Benchmark Capital is a venture capital firm known for its unique structure and strategic approach, often contrasting with other firms in the industry. Their model emphasizes an equal partnership, deep commitment to founders, and a focused early-stage investment strategy [01:17:19].
The Benchmark Dinner Tradition
A core element of Benchmark’s culture is its long-standing dinner tradition [01:29:08]. The idea for these dinners originated around 2006-2007, inspired by Ben Franklin’s habit of deep-dive discussions [07:11:47].
Purpose and Atmosphere
The dinners are designed to foster social connection that is “fluid, fun, and playful,” rather than transactional or rigid [00:10:10]. They have “no agenda” [00:24:26], encouraging open-ended discussions and wild explorations of topics the partners are curious about [08:58:02]. The goal is to nurture curiosity, which is seen as the “essential lifeblood of the firm” [08:40:02].
The Non-Hierarchical Table
A significant aspect of the dinner tradition is the custom-designed table, created by Ole Lundberg based on a hand sketch [10:06:01]. This organic table, which can expand and collapse, was specifically designed to “deconstruct power centers” and create a non-hierarchical, intimate environment [09:57:01]. It ensures that all conversations are “one conversation,” preventing sidebars and promoting collective engagement [11:17:19].
Partnership Philosophy
Benchmark operates on an equal partnership model, contrasting with many venture capital firms [01:16:16]. This model aims to foster a strong sense of teamwork and collective responsibility.
No Memos, No Pre-Selling
Unlike many firms that require partners to write investment memos, Benchmark does not [12:35:00]. Memos are viewed as a “crutch” that can introduce bias, allow partners to fill in blanks, and serve as a “pre-sell” artifact [14:04:00]. Instead, the focus is on “truth seeking,” where partners relay discoveries and notes from calls without ego or overarching bias [14:45:00]. This approach encourages open discussion and allows the partners to fully experience the founder’s vision [13:04:00].
Collective Engagement and Trust
The firm’s operations, including Monday discussions, prioritize an “unbounded agenda” [16:02:00], allowing partners to delve deeply into topics without being rushed [15:15:00]. This fosters a collaborative environment where stories and wisdom are shared fluidly [15:55:00]. The culture is built on the premise that “all the stories that are told at Benchmark are all about the group going and accomplishing something” [18:33:00], emphasizing collective effort over individual heroics [18:47:00]. A vital aspect of the founder-Benchmark partner relationship is vulnerability [36:44:00].
Investment Strategy and Focus
Benchmark’s strategy is characterized by a deep commitment to early-stage investing and a deliberate refusal to expand into later-stage “growth funds” [41:57:00].
No Growth Funds
Unlike many competitors who have become “life cycle Capital providers” [42:00:00], Benchmark views this as a distraction. They believe that raising more money for later stages would lower their returns and “inflame” the partnership by introducing conflicting incentives [47:30:00]. Their focus is on achieving high multiples on their funds (e.g., 20x, 50x, 100x), which they believe is diluted by late-stage investments [47:17:00].
The core reason for this focus is that the partners “love working with founders” at the earliest stages [45:05:00]. This passion means they don’t want to spend time managing larger staffs, doing marketing for LPs, or evaluating investments outside their purview [45:27:27].
“Focus is when in some ways every bone in your body thinks an idea is a really good idea but you don’t do it.” [48:28:00]
This focus allows them to maximize the probability of meeting and partnering with the next iconic company [01:00:01].
Founder-Centric Support
Benchmark emphasizes “commitment” over making “bets” [33:50:00]. This commitment means being “on the field denting those odds” alongside founders [34:04:00]. They prioritize supporting the founder and empowering them [35:51:00]. An example shared illustrates a partner flying internationally last-minute to support a portfolio company during a critical emotional decision, simply by being present [32:32:00].
This approach creates a symbiotic relationship where Benchmark’s lack of a growth fund avoids conflicts of interest, allowing founders to optimize valuations for future rounds without pressure from their early investor [57:31:00].
”Good Failures”
Benchmark embraces the idea of “good failures,” like Webvan, which they consider a “really good failure” and an investment they would make “a thousand times” [02:26:00]. They believe that even if a company doesn’t succeed financially, it can still be a worthwhile endeavor and a good use of venture capital, provided it’s a “worthwhile Endeavor an entrepreneur pursuing that should get funded” [01:21:26]. This shows a tolerance for high-risk, potentially “crazy” [01:19:01], investments based on deep conviction [01:19:09].
Firm Architecture and Evolution
Benchmark maintains a small team, typically five partners [00:29:29], who are all generalists [01:39:57]. They intentionally avoid developing specialized “swimlanes” or rigid sector focuses [01:51:43].
Partner Recruitment
New partners are typically brought in after extensively working together on boards or competing for investments [01:29:36]. The process is organic, focusing on individuals who embody Benchmark’s values and show a deep love for the craft of venture capital [01:32:05]. They seek individuals who are “roving curious” [01:32:05] and aspiring to be wide dynamic range investors [01:41:36]. The firm evolves naturally with the market and entrepreneurs leading the way, rather than through intentional hiring for specific sector expertise [01:38:05].
Flexibility in Roles: “Principals” and “EIRs”
Despite their commitment to an equal partnership, Benchmark sometimes employs roles like “Principals” or “EIRs” (Entrepreneurs in Residence). This is explained as a way to “surround ourselves with a person who we want amongst us all who pushes us” [01:47:01]. They don’t have a formal “principal program” but rather find ways to work with “special people” who embody their values and are at a different stage in their careers [01:48:51]. These arrangements are often “experiments” or “trials” [01:50:08], allowing for organic development and flexibility in how they engage with talented individuals [01:51:21].
Ethos and Culture
Benchmark’s core ethos is built on a “deep commitment to equality” that permeates everything they do [01:54:27].
Anti-Incumbent and Constant Rejuvenation
The firm operates with an “anti-authoritarian” and “destroy the incumbent” mindset [02:42:00]. They do not want to become the incumbent themselves and embrace “violent rejuvenation” [02:49:00], which includes partners “firing themselves” when they feel they can no longer give more to the firm than they take [02:53:00]. This ensures the firm remains fresh and focused on “collective joy in serving entrepreneurs” [02:56:00].
Humility and Accessibility
Partners consciously avoid arrogance and maintain a flat hierarchy, even booking their own meetings [01:54:42]. They are “highly available to meet” and “quite responsive” [01:04:19]. They believe the best introduction to a company is an entrepreneur telling another founder that Benchmark provides a “gold plated, high-quality experience” that helps “stretch their thinking” [01:09:34].
Gut-Driven, Not Analytical
Benchmark describes its investment process as “very like gut driven” rather than analytical [01:15:56]. They don’t perform extensive outcome scenario analyses or rely on traditional metrics like viral coefficients in the early stages, as these can often lead to the “wrong way” [01:18:31]. Instead, they seek a deep connection with founders who “see something that other people don’t see” [01:19:15]. The commitment comes from instinct, emotion, and the belief that the company serves a great purpose, with financial returns being the outcome, not the input [01:16:01].
Relationship with Past Partners
Former Benchmark partners become “LPs” (Limited Partners) in the firm, maintaining an official financial relationship similar to other investors [02:58:00]. Emotionally, they are seen as “uncles and aunts” [42:42:00] rather than parents or overlords [01:14:00]. They are deeply invested in the current partners’ success, offering their network and insights when called upon [02:30:00]. There is also a belief that the firm’s model endures partly because former GPs become the new LPs [01:53:00].