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Report: Bill Gurley is stepping away from an active role Benchmark, 21 years after joining the firm

According to a new WSJ report, Bill Gurley, among the most famous of Silicon Valley’s venture capitalists, looks to be stepping way from Benchmark, the early-stage venture firm that was founded in 1995 and which Gurley joined soon after, in 1999. According to its sources, he will not be investing the firm’s 10th venture firm, […]

According to a new WSJ report, Bill Gurley, among the most famous of Silicon Valley’s venture capitalists, looks to be stepping way from Benchmark, the early-stage venture firm that was founded in 1995 and which Gurley joined soon after, in 1999. According to its sources, he will not be investing the firm’s 10th venture firm, which is targeting $425 million in capital commitments.

Gurley’s apparent segue out of the firm won’t surprise many. Benchmark — which has always run a fairly small operation — has routinely groomed new investors as veterans of the firm have moved on. When Benchmark raised its last fund — another $425 million vehicle in 2018 — it parted ways with Mitch Lasky and Matt Cohler, who’d joined the firm in 2007 and 2008.

The firm’s cofounders — Bob Kagle, Kevin Harvey, Andy Rachleff, and Bruce Dunlevie — also stepped away from actively investing on behalf of Benchmark years ago, with Kagle stepping back to sail more back in 2011, while Harvey got into the wine-making business in 2004 and has since developed at least seven estate vineyards from Santa Cruz to Mendocino under his company’s brand, Rhys Vineyards.

Each continues to list himself publicly as a general partner at the firm and, on rare occasion, to represent Benchmark on a board of directors, as happened with Dunlevie, who joined the board of 10-year-old WeWork when Benchmark led the company’s $17 million Series A round in 2012. Dunlevie is now part of a special committee of WeWork’s board of directors that is suing SoftBank for alleged breaches of contract related to its recent decision to cancel a $3 billion tender off for WeWork shares.

Still, Gurley’s presence will be missed. He is the longest-standing partner of Benchmark and certainly the highest profile, thanks partly to an active presence on Twitter, along with Gurley’s highly regarded blog posts and, earlier in his career, a regular column with Fortune magazine.

He is also credited with some of the firm’s most lucrative investments, including, most profitably, a $10 million Series A bet in 2011 on a then-nascent Uber — a deal that has gone on to produce many billions of dollars in returned capital to Benchmark’s investors.

The deal also sullied Gurley’s reputation to an extent, after he engineered the ouster of Uber’s cofounding CEO, Travis Kalanick, raising questions both about how founder friendly Benchmark is and also why, if Uber was being mismanaged, Benchmark waited so long to take action.

Gurley had also become renowned in recent years for warning founders to take their companies public sooner, and to stop spending frivolously. At a Goldman Sachs technology conference in 2018, he cautioned — not for the first or last time — that easy money was making founders less and less accountable to their investors while also driving up valuations to undeserving heights. “Watch out,” he’d said on stage. “It’s a dangerous time.”

As the most senior member of Benchmark, Gurley has been credited with maintaining the firm’s unwavering focus on early-stage investments, turning down hundreds of millions of investing capital to raise fund after fund in the range of $400 million while other firms have established bigger and more numerous funds to manage — and likely had a harder time returning as much capital to backers.

In fact, Benchmark raised one $1 billion fund during the go-go dot.com days, after an investment in eBay established the young outfit as a top firm. But Benchmark quickly reverted back to smaller vehicles, deciding it was mistake.

We reached out earlier today to Gurley for comment on his plans and have yet to heard back.

Other general partners at Benchmark include its newest hire, general partner Chetan Puttagunta, along with GPs Sarah Tavel, Eric Vishria, and Peter Fenton, who will become the most senior partner on the team in Gurley’s absence, having joined Benchmark in 2006 from Accel, where Fenton was an investor previously.

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