Lessons from Benchmark: Navigating the AI Funding Frenzy to Avoid the Microsoft Trap

Yesterday in Helsinki, the editor interviewed four general partners at Benchmark. The interview took place at Slush, a European startup event. Victor Lazarte, a Benchmark general partner and gaming company entrepreneur, admitted that there was no business reason for Benchmark to attend Slush. The conversation also touched on the topic of soaring valuations and the impact of Benchmark’s investment in a gaming company, Wildlife Studios. The conversation also focused on the current AI investing boom and a general downturn. Partner Miles Grimshaw commented on the sweeping trend of AI in everything, predicting that user expectations of what’s possible will increase rapidly. The team expressed a clear view that today’s high-flying but closed large language models aren’t going to be the breakaway winners that many expect them to be. They had not invested in such LLM companies, including OpenAI and Anthropic.

Peter Fenton added that capital-intensive businesses and venture-backed companies have historically not been great partners for Benchmark. The conversation also touched on the topic of a big miss by Benchmark with regards to Airbnb. The team also talked about what makes a Benchmark company in 2023, with GP Sarah Tavel saying the focus remains on investing in nascent teams. Finally, the conversation touched on counsel from Benchmark to its startups regarding valuations, with Lazarte sharing his experience when partnering with Benchmark in 2019. They discussed the impact of follow-on valuations on earlier investors and the founders themselves.

Author photo
Publication date:
Author: admin