📶 14 Lessons From Bob Kagle (General Partner @ Benchmark)

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Good morning 👋

This week’s deep dive is on Bob Kagle, a VC legend and one of the original General Partners at Benchmark.

Benchmark is one of the best-performing funds of all time, and they have set the venture standard over the past three decades.

Benchmark operates differently than most funds.

They split carry evenly among all partners. They have deliberately kept their fund sizes small instead of scaling up and earning more through fees. They do not hire massive operations teams. They do not care for branding (this is their website).

Thinking different has served the fund well, and Bob is a large reason for their success.

Here are 14 takeaways from studying Bob and his career.

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Lessons

• Equal work, equal pay. The idea of anything other than an equal partnership disgusted him. All of the partners at Benchmark have equal carry, and all GPs own the management company without paying for it; it is given to them from the previous GP class. If you get anything from this piece, this is it.

• The winning formula: name brand founders create name brand funds which attract capital and talent. Once this flywheel gets going, it is hard to stop. Winners keep winning.

• You succeed by helping others succeed. Benchmark took this approach even before capital was a commodity, and it has served them well.

• The balance between brains and courage. Often the best VCs are the ones with strong curiosity paired with strong humility. The biggest risk for these types of investors is overthinking things.

• The venture capital industry does not scale well. This is part of the reason Benchmark deliberately stays small. In Bob’s view, VCs are supposed to bring support and be steady; it is not their role to bring on dozens of platform people.

• Choose opportunity over obligation. The people building the future are able to trade short-term obligations for long-term opportunities.

• Elite recruiting is the ultimate multiplier. Find great people, bring them together, and stay out of their way.

• The only way to earn good judgement is through periods of bad judgement. View failure as an invitation to try again with better experience and better judgement.

• If you want quick wins, venture capital is the wrong career for you. It takes years to know if you’re any good, and it can take a decade to realize returns.

• Small funds win. Kagle strongly believed that smaller funds outperformed larger funds (he was right).

Quotes

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