Greylock caps new fund at $1.5B despite ability to raise more
▼ Summary
– Greylock Ventures raised a $1.5 billion 18th fund, which is 50% larger than its previous $1 billion fund but still smaller than what the firm could have raised, as it intentionally resists the industry trend of ballooning fund sizes.
– The firm keeps its number of portfolio companies small to provide high-touch support, with its 10 partners making only one or two new investments each annually, resulting in roughly 25 companies from this fund.
– The new fund will focus primarily on early-stage investments, including incubating companies and leading seed and Series A rounds, building on Greylock’s track record with companies like Palo Alto Networks and Abnormal.
– Greylock also invests in later-stage companies when it misses them early on, with about 15% of the new fund allocated to such deals, including past investments in Anthropic, Revolut, and Wiz.
– Greylock’s investment approach emphasizes betting on people before they start a company, with partners reviewing individuals’ names rather than company names in their weekly pipeline meetings.
While many elite venture capital firms continue to chase ever-larger fund sizes, Greylock Ventures, a storied name in Silicon Valley for over six decades, is deliberately swimming against that tide. On Tuesday, the 61-year-old firm announced the close of its 18th fund at $1.5 billion,a figure 50% larger than its previous $1 billion vehicle from 2023 and roughly on par with what it raised across seed and flagship funds during the pandemic. Yet partner Saam Motamedi told TechCrunch that Greylock could have easily secured a “multiple” of that amount, signaling that the partnership chose discipline over expansion when many peers are doing the opposite.
“Our mission is to be the most important partner to the most important entrepreneurs,” Motamedi said. The firm’s strategy hinges on providing portfolio companies with access to top engineers and potential customers, a model that paid off with Baseten, an AI infrastructure startup now valued at $13 billion after Greylock led its Series A in 2022. But Motamedi emphasized that such deep support requires a tightly curated portfolio. The firm’s 10 partners typically make only one or two new investments each per year, a pace that should yield roughly 25 portfolio companies from this fund.
As with its earlier funds, Greylock will concentrate on incubating companies from scratch and leading seed and Series A rounds. This is where the firm has built its legacy, notably with Palo Alto Networks, which was founded inside Greylock’s offices 21 years ago, and Abnormal, an email security startup incubated in 2018 that was last valued at $5.1 billion.
Still, Greylock doesn’t limit itself to early-stage deals. Motamedi confirmed the firm will back high-potential later-stage companies even if it “missed them early on.” The 17th fund included three such growth-stage bets: Anthropic, Revolut, and Wiz. Greylock’s first investment in Anthropic came during its Series F at a $183 billion valuation, which Motamedi called “the largest investment in the firm’s history.”
Motamedi estimates that roughly 15% of the new fund will go toward later-stage startups, but he stressed that Greylock remains fundamentally an early-stage investor. He offered a telling detail: when the partners meet every Monday to review their pipeline, the agenda is dominated by people’s names, not company names.
“We’re getting to know people even before they start a company. It’s really a bet on the person,” he said. “Often the company doesn’t even exist.”
(Source: TechCrunch)
