Benchmark Is Raising A New $425 Million Fund For The AI Startup Era

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Benchmark Fund,Benchmark Raises New Fund,Venture Capital

I'm a senior editor at Forbes covering venture capital and startups, especially in cloud and AI, out of New York. I edit the Midas List and Under 30 for VC, and created the Midas List Europe and Cloud 100 lists. I've written more than a dozen cover stories on business leaders including Marc Benioff, Patrick Collison and Melanie Perkins.

Benchmark's Peter Fenton, Eric Vishria, Sarah Tavel, Chetan Puttagunta and Victor Lazarte will all serve as equal partners in its new fund.Venture capital firm Benchmark is raising $425 million for ‘Benchmark 1,’ its eleventh fund, per a letter sent to limited partners obtained byVenture capital firm Benchmark is raising $425 million for its eleventh fund amid an artificial intelligence boom, according to an investor letter obtained by.

Benchmark has raised the same size funds since at least 2013, when it raised its Fund VIII, although its pace of investing those funds has fluctuated. Its ninth fund was raised in 2018, five years later, and its most recent, Fund X, was raised two years after that in 2020, as Reutersat the time. Benchmark finished investing out of that fund “recently,” per the letter, meaning it took about four years to deploy.

The model is costly: any investor hired by Benchmark, even midway through a fund cycle, is cut into the firm’s considerable profit-sharing overnight, at the expense of its other partners. But it’s also proven highly lucrative when it works. Backing only one or two companies per year, Benchmark’s partners typically take 20% or more of the equity in a startup, alongside a seat on its board of directors.

 

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