Benchmark Capital: Open For Business

Posted on December 1, 2008. Filed under: Internet, Uncategorized, Web/Tech | Tags: , , , , |

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“People see you having fun
Just a-lying in the sun
Tell them that you like it this way”
     – BTO, Takin’ Care of Business

The seemingly chronic state of our economy, combined with the thundering sound of dire financial news has left many in a state of shock.  This unprecedented moment in time has resulted in unprecedented questions, such as, “Do you think California Municipal bonds are safe investments?”  Hard to imagine in the past, but with the country’s richest state begging for a federal bail-out, who knows? 

There have been similar questions raised about the VC industry, and perhaps many of them are equally unprecedented.  Do VCs have money to invest?  Are they pulling back?   Do they have access to their money?  Do they have enough capital for follow-on investments?  Are the LPs pulling back for their own liquidity?  The list goes on and on, and if you read the popular press you might think we are all under our desks dreaming of 1999.

I can’t speak for other firms, but make no mistake about…Benchmark Capital is wide open for business and we are eager to invest new capital behind great entrepreneurs.  Right now.  In this environment.  Today. 

You may wonder why I feel the need to make this pronouncement, and you many even consider this a stunt.  It is not.   We have made fourteen new investments this year, and are actively considering new investments each and every day.

What is driving our enthusiasm to be optimistic while the general perception is that we should be “scared”?  Here are four answers on a roll:

1)   We make money investing, not sitting on our money.  Innovation and disruption are constant and not subject to the whims of the overall economy.

2)   We believe that environments like this tend to sort out the true entrepreneurs from the pretenders.  When money is easy in Silicon Valley, it tends to attract short-term opportunists looking to make a fast-buck rather than build a lasting company.  Only the best entrepreneurs set sail in rough seas like this.

3)   We like the probability for startups (especially Series A deals) in this environment.  Consider that people are easier to hire and rent is cheap.  Incumbents are cutting their R&D budgets, and there will be fewer startups in each space, all of which means less competition.  These are good things. 

4)   Graham and Dodd said it first and best, but one “… should try to be fearful when others are greedy and greedy when others are fearful.”  Pretty clear what time it is.

If you hear anyone asking if VCs are “puling back” and unwilling to invest, please tell them to call us.  We are open for business.

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10 Responses to “Benchmark Capital: Open For Business”

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A business which has a good foundation, would
sail smoothly even at times of calamity too. Business that was built in a fortnight would disappear one
night.

Great Article. Nice Work.

[…] and Dodd, as oft quoted: Be fearful when others are greedy, and greedy when others are […]

That’s good too know!!
-Jonathan Kleiman, Probook.ca

So Bill .. what about investing an European Startup ? 🙂

Of course we will. MySQL was indeed just that.

as an entrepreneur that had bill as in investor during the last downturn, i can assure anyone reading this post that he means it. Time to see who’s the real deal..

[…] Benchmark Capital: Open For Business “People see you having fun Just a-lying in the sun Tell them that you like it this way”      – BTO, […] […]

Great post Bill

It’s about time we heard this from a VC – as it is a great time to “buy” as an investor or even as an entrepreneur (people, assets, competitors)

BP

[…] Here is a post from Benchmark partner Bill Gurley. I first met Bill when he was an analyst years ago before he joined Hummer Winblad then Benchmark. Bill not that technical but is very skilled at analyzing and reading the market. I think his views are right on the money (pun intended). […]


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    …focusing on the evolution and economics of high technology business and strategy. By day, I am a venture capitalist at Benchmark Capital.

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