Ben Gilbert: belief

Transcript context

…You got three pretty good folks. I believe it was Bruce who says, hey, look, we're having a tough time convincing other venture guys and other GPs to come join us, but we might actually want to look somewhere else. It might actually be a good thing for us if we bring in some entrepreneurial DNA into the firm. We've got all these problems with the way traditional venture works and all these other folks out there are reluctant to join us. Maybe it'd be good for us to actually bring in some different perspectives. He says, I think I know just the guy, a former entrepreneur who I worked with and sat on his board. We actually went to Rice together, Kevin Harvey. Kevin after Rice had started two companies, the first one Apple had acquired, and then the second company, Approached Software, Bruce had invested at Merrill Pickard. He was on the board. They just sold it to Lotus and had a decent outcome. Bruce thought, hey, Kevin might make a pretty good VC. They approached him and he's like, great, this sounds way easier than starting another company. There you go. You've got Bob, Bruce, Andy, and Kevin, the four well-known founders of Benchmark. But four wasn't actually the number they were going for. They thought they needed at least five people to have a viable firm. They go and actually recruit a fifth founding member, the fifth co-founder of Benchmark, a guy named Val Vaden. Val had also gone to GSB and worked in a venture, but he had moved on from two early-stage ventures. He was doing software company buyouts. I'm thinking of Thoma Bravo and Vista, the precursor to that at a much smaller scale. They bring Val on as the fifth partner. Here we are now at the end of 1994. We got the five members of the band: the drummer, the guitarist, the bassist, the lead singer, and the rhythm guitarist. Bob, Bruce, Andy, Kevin, and Val put together a prospectus to go out and raise their first fund. The first thing they need to put on the prospectus is a name. It's quite an audacious name that they come up with, of course, Benchmark Capital. Yeah. They went all in on signaling something to the market. I think what you're about to get into is how they signaled that in the form of the economics that they were asking for, but they certainly signaled it in the name. It was, you haven't heard of us, but we're already important. Yes. Our aspiration is to set a new benchmark for performance in this industry and how venture capital is done. This is featured prominently supposedly in the Benchmark fund one prospectus. It says, "There is always room at the top." Then, what you're talking about, Ben, typical economic terms of venture funds especially in those days was a standard management fee and carry management fee of 2% and standard carry performance element of the fund of 20% of the net profits of the fund.…

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