Benchmark (venture capital firm)

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Benchmark is an American venture capital firm founded in 1995 by Bob Kagle,<ref name=bob/> Bruce Dunlevie, Andy Rachleff,<ref name=forbes1/> Kevin Harvey,<ref name=kevin/> and Val Vaden.<ref name=val/> The firm is known for its equal partnership structure<ref name=nyt/> and focus on early-stage investing, typically leading the first institutional round of funding while taking a board seat with each company it invests in.<ref name=forbes1/>

Founding, partner structure

Benchmark was founded in 1995<ref name=nyt/> by five partners: Bob Kagle,<ref name=bob>Template:Cite news</ref> Bruce Dunlevie, Andy Rachleff,<ref name=forbes1/> Kevin Harvey,<ref name="kevin">Template:Cite news</ref> and Val Vaden.<ref name=val>Template:Cite news</ref> The firm is noted for creating the first equal ownership and compensation structure for its partners,<ref>Template:Cite book</ref> where there are no "junior partners" or "senior partners," and there are also no CEO-like position held,<ref>Template:Cite news</ref> differing from other VC firms which are named for their founders and are structured hierarchically.<ref>Template:Cite news</ref> The firm has stated the reason for maintaining this approach is to "force discipline and accountability to focus on what matters" for its founders and limited partners,<ref name=forbes1>Template:Cite news</ref> as their profits are driven by investment performance as opposed to management fees.<ref name="nyt">Template:Cite news</ref> The collective decision-making structure also means that Benchmark shares responsibility for the performance of the companies the firm invests in, not just the single partner who joins the company's board of directors.<ref name=forbes1/><ref name=nyt/>

Prior partners with the firm include Bill Gurley (who stepped back from his position after serving with the firm for twenty-one years),<ref>Template:Cite news</ref> Mitch Lasky, and Matt Cohler (who each stepped back from their roles as partners after each spending more than a decade with the firm).<ref>Template:Cite news</ref>

Investments

The firm's most successful investment was a 1997 investment of $6.7 million in eBay for 22.1% of the company.<ref name=eBay>Template:Cite news</ref> In 2011, it invested $12 million for an 11% stake in Uber, worth $7 billion in 2019 and $9.4 billion in 2023.<ref>Template:Cite news</ref>

Benchmark’s first eight funds, raised and invested between 1995 and 2019, returned more than seven and a half times the money invested, net of fees and carry.<ref name=nyt/>

The firm has made exits from several companies,<ref>Template:Cite news</ref> including Amplitude,<ref>Template:Cite news</ref> Asana,<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Confluent,<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> eBay,<ref name=eBay/> Elastic,<ref>Template:Cite news</ref> New Relic,<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite news</ref> Nextdoor,<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite news</ref> Red Hat,<ref>Template:Cite news</ref> Snap,<ref>Template:Cite news</ref><ref>Template:Cite news</ref><ref>Template:Cite news</ref> Stitch Fix,<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite news</ref> and Uber.<ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

List of investments

Business	Source
1-800-Flowers	Template:Cn
Airtable	citation	CitationClass=web }}</ref>
AOL	Template:Cn
Art.com/Allposters.com	Template:Cn
Benchling	citation	CitationClass=web }}</ref>
CTERA Networks	Template:Cn
Cerebras Systems	citation	CitationClass=web }}</ref>
Chainalysis	<ref>Template:Cite news</ref>
Cockroach Labs	citation	CitationClass=web }}</ref>
CouchSurfing	<ref>Template:Cite press release</ref>
Demandforce	Template:Cn
Digits	<ref>Template:Cite news</ref>
Discord	<ref>Template:Cite news</ref>
Duo Security	<ref>Template:Cite news</ref>
Domo, Inc.	citation	CitationClass=web }}</ref><ref>Template:Cite news</ref>
Docker	<ref>Template:Cite news</ref>
Dropbox	citation	CitationClass=web }}</ref>
EBags.com	Template:Cn
Friendster	Template:Cn
HackerOne	<ref>Template:Cite news</ref>
Instagram	<ref>Template:Cite news</ref><ref>Template:Cite news</ref>
JAMDAT	Template:Cn
Juniper Networks	Template:Cn
Marin Software	citation	CitationClass=web }}</ref>
Metacafe	Template:Cn
Minted	Template:Cn
Modern Treasury	<ref>Template:Cite news</ref>
MySQL	Template:Cn
OpenTable	Template:Cn
Optimizely	citation	CitationClass=web }}</ref>
Palm, Inc.	Template:Cn
ResearchGate	<ref>Template:Cite news</ref>
Seeking Alpha	Template:Cn
ServiceSource	Template:Cn
Sketch	citation	CitationClass=web }}</ref>
Solv	citation	CitationClass=web }}</ref>
Twitter	citation	CitationClass=web }}</ref>
Tellme Networks	<ref>Template:Cite news</ref>
Vessel	<ref>Template:Cite news</ref>
WeWork	<ref>Template:Cite news</ref><ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation	CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation	CitationClass=web }}</ref>
Xapo	<ref>Template:Cite news</ref>
Yelp, Inc.	citation	CitationClass=web }}</ref>
Zendesk	citation	CitationClass=web }}</ref>
Zillow	citation	CitationClass=web }}</ref>
Zipcar	<ref>Template:Cite news</ref>
Zuora	<ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation	CitationClass=web }}</ref>

Controversies

Founder Relations and Board Actions

Benchmark Capital has faced scrutiny regarding its relationships with company founders and its role in leadership changes at portfolio companies. The firm's actions have raised questions about the balance between investor oversight and founder autonomy in venture capital.

Uber Litigation

In August 2017, Benchmark filed a lawsuit against Uber co-founder and former CEO Travis Kalanick, alleging that he had misled the board in order to gain control of additional board seats.<ref>Template:Cite news</ref> The lawsuit sought Kalanick's removal from Uber's board of directors and was described as "unprecedented" in Silicon Valley venture capital circles.<ref>Template:Cite news</ref> The litigation was eventually dismissed in January 2018 as a condition of SoftBank's investment in Uber.<ref>Template:Cite news</ref>

Pattern of Founder Departures

Beyond Uber, Benchmark has been involved in leadership changes at multiple portfolio companies. According to media reports, Benchmark partner Bill Gurley assisted the board at Nextdoor in replacing founder Nirav Tolia as CEO.<ref>Template:Cite news</ref> Additional reports have documented the firm's involvement in leadership changes at other portfolio companies, including solar technology company Nanosolar, where founder Martin Roscheisen was removed from his position.<ref>Template:Cite news</ref>

Roscheisen later characterized Benchmark as "the backstabber of all founders" and stated he would never accept investment from the firm again.<ref>Template:Cite news</ref>

Impact on Startup Community

The Uber lawsuit and other founder departures generated significant criticism within the startup community. Following the Uber litigation, several entrepreneurs expressed reluctance to work with Benchmark. Gabriel Puliatti, founder of startup Emptor, stated there was "no way" he would accept investment from Benchmark, saying he "empathized a lot with Travis" during the events.<ref>Template:Cite news</ref>

Venture capitalists and entrepreneurs predicted the lawsuit would have a "chilling effect" on the next generation of talent, with industry observers noting that Benchmark would have to answer "awkward questions in a lot of deals for the foreseeable future."<ref>Template:Cite news</ref> Investor Hazem Awad commented that "any entrepreneur would naturally feel nervous about working with Benchmark, at least for the time being," citing concerns about "what will happen if things get that bad."<ref>Template:Cite news</ref>

The controversy prompted discussion on social media, with entrepreneurs expressing concerns about Benchmark's approach to founder relations. One entrepreneur in Hong Kong, Larry Salibra, wrote that the "cost of accepting investment from Benchmark just went through the roof in minds of founders everywhere."<ref>Template:Cite news</ref>

Delian Asparouhov of Founders Fund criticized Benchmark's approach, stating: "I don't know how you explain to founders, 'Hey, the way I do early-stage investing is — I bet on founders,' and then you have this track record of explicitly not betting on founders."<ref>Template:Cite news</ref> Asparouhov argued that venture capital firms with a history of removing founders could lose access to the most sought-after deals.

Some industry observers defended Benchmark's actions as necessary corporate governance. Mark Suster of Upfront Ventures stated: "There are people who are old enough and wise enough, to have a long enough lens, to say, 'You know what, governance matters.'"<ref>Template:Cite news</ref>

In popular culture

Benchmark Capital was featured in the Apple TV+ original TV series WeCrashed starring Jared Leto and Anne Hathaway. In the show, Anthony Edwards portrays Benchmark co-founder Bruce Dunlevie, who became WeWork's first major investor on the 1st of April in 2012 when Benchmark led WeWork's $17 million Series-A seed funding.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Benchmark was also featured in the Showtime original Super Pumped starring Joseph Gordon-Levitt. In the series, Kyle Chandler plays former Benchmark general partner Bill Gurley, portraying his involvement in leading Ubers' $11 million round of fundraising in February 2011.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

See also

• List of venture capital firms

External links

• Template:Official website