📶 a new shark in the water

Partners from Bessemer, a16z, and Index are (allegedly) teaming up on a new fund

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TL;DR:

NEWS
The new kids on the block 🆕

Ethan Kurzweil (Bessemer Venture Partners), Kristina Shen (Andreessen Horowitz), and Mark Goldberg (Index Ventures) are rumored to be starting a new early-stage investment firm according to Axios.

Why it matters: 

This is still a rumor (for now), but there are a few signs that things are real.

  • Shen announced her departure from a16z to start her own venture firm, months after The Information reported the same about Goldberg.

  • Kurzweil announced last week that he was leaving Bessemer to form a new firm.

  • Kurzweil and Shen previously worked together at Bessemer for several years.

  • Shen and Goldberg know each other from being on the board of compensation management startup Pave together, while Kurzweil and Goldberg served on the board of customer support chat company Intercom.

What happens next: 

Like everything else, the venture capital world runs on incentives, and carried interest is the primary incentive driving career decisions.

Splitting up carry is easy when you’re starting out, but it becomes a lot more complex as you scale AUM. Bringing in A players means you have to split up more of the pie, and that split comes out of the pockets of the existing partners.

Kurzweil was one of the first investors at Bessemer; today it has close to 400.

Shen joined a16z when it had <400 employees; today it has close to 700.

Goldberg was one of the first at Index; today it has close north of 100 employees.

Each of those firms today are drastically different than when each of them started, and there is simply less carry to share among more people. Not saying that’s the only reason that established names leave a fund, but we imagine it’s one of the main reasons.

We’ll keep monitoring the situation, but we expect more partners at mega funds to start evaluating whether it’s the right time for them to pack it up and start their own fund.

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RESULTS

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