While many top venture firms continue to raise massively larger funds, Greylock Partners, one of Silicon Valley’s oldest and most prestigious venture firms, is purposefully bucking the trend of increasing fund sizes.
On Tuesday, the 61-year-old company announced that it had raised an 18th fund of $1.5 billion. The number is 50% higher than its previous $1 billion vehicle from 2023 and roughly matches the capital the company raised from seed and flagship funds during the pandemic. However, Greylock partner Saam Motamedi told TechCrunch that Greylock could easily raise a “multiple” of that amount, suggesting the partnership decided restraint was the best path at a time when fund sizes across the industry continue to rise.
“Our mission is to be the most important partner for the most important entrepreneurs,” said Motamedi. The company prides itself on introducing its portfolio companies to top engineers and potential customers, as it did for Baseten, an AI infrastructure startup now valued at $13 billion, after first investing in its Series A in 2022. But Motamedi said Greylock can only provide that level of support by keeping the number of companies it backs small.
The firm’s 10 partners make only one or two new investments each year, a pace that Motamedi said will lead to about 25 portfolio companies from this fund.
Like its predecessors, the new fund will focus mainly on incubating companies from the early stages and on the top series of seed rounds and Series A. This is where Greylock has built its reputation; the company has a strong track record of starting companies from scratch, most notably security giant Palo Alto Networks, which started in Greylock’s offices 21 years ago, and email security startup Abnormal, which Greylock incubated in 2018 and was last valued at. to $5.1 billion.
Even so, Greylock doesn’t strictly adhere to agreements at an early stage. It will also back high-potential, later-stage companies, even if it “lost them early,” Motamedi said. The firm’s 17th fund included three such growth-stage bets: Anthropic, Revolut and Wiz.
The firm made its first investment in Anthropic when the artificial intelligence company raised its Series F at a $183 billion valuation. “It’s the biggest investment in the company’s history,” Motamedi said.
Motamedi estimates that about 15% of the new fund will go to later-stage startups, but maintains that Greylock remains essentially an early-stage investor.
As proof, Motamedi said that when the partners meet every Monday to review their investment pipeline, the agenda consists mostly of people’s names rather than company names.
“We know people even before they start a company. It’s really a gamble on the individual,” he said. “Often the company doesn’t even exist.”
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