Investing in Relationships with Entrepreneurs through $750 million in New Venture Capital Funds
Raising a new fund, especially in these unprecedented and difficult times, required the unwavering support of our limited partners who recognized our team-based approach, disciplined strategy and top-tier returns. We believe our success as venture capitalists is always the result of the hard work and sacrifice of entrepreneurs who choose to partner with us.
Through our two new funds, we are in a strong position to invest in the entrepreneurs of tomorrow and continue to support our current entrepreneurs with both venture and mentor capital. Mayfield XVI will continue the firm’s early-stage focus, primarily investing in companies at the ideation or early product/customers stage. Mayfield Select II follows the strategy of Mayfield Select I, to invest in later-stage rounds of our breakout portfolio companies. The firm is expanding the charter of Mayfield Select II to invest in companies outside its portfolio which are at early-growth stages with product-market fit and are demonstrating inflection in their business.
While the current climate is uniquely challenging, our firm has lived through many industry ups and downs, and over the last decade, we navigated some tough times. We were called upon to demonstrate our core beliefs again and again. Here are some reflections from our journey over the last decade that illustrate how we became a stronger firm committed to stand by our entrepreneurs through victorious and challenging times.
This is true of Mayfield’s journey over the last decade as well. The period following the 2008 financial crisis was hard for the venture capital industry. Like so many other firms, we too were impacted by the downturn. With the support of limited partners (and good timing), we raised Mayfield XIII, in September 2008 right after the financial market crash. Looking back, it is clear that it took grit, patience and a long-term perspective to get to where we are today. Similar to how we are guiding our founders and CEOs today, we had to quickly adopt a wartime leader mindset. We made moves to get back to the basics and focus on what matters. We stuck to our conviction of staying as an early-stage venture investor over four subsequent funds even as the venture industry was shifting. We went deeper into domains we were already experts in vs. following shiny new objects. We raised funds at a measured pace of every four years and built a team of investors who were company builders. Today, we are fortunate to be a top choice for entrepreneurs, a top performing venture capital firm for limited partners, and a great place to work. But we never forget that it took time for us to get to where we are today.
The 2008 financial market crash was a tough time to feel optimistic about the future. However, we were inspired by historical examples of founders who created great companies in difficult times – such as General Electric after the Great Depression, Hewlett Packard after the Second World War, Amgen after the 1980 recession, Cisco after the 1987 stock market crash, and Google after the 2000 Internet bust. So we did what we know to do best – we found and funded bold entrepreneurs. There were some great ones who chose us at that time – Rehan of Elastica; Logan and John of Lyft; Phil, Jon and Dave of Marketo; Jonah and Noah of Moat; Manish, Tracy, Chetan and Gautam of Poshmark; Hari, Athani and Dave of ServiceMax; and Lyndon and Peter of SolarCity. We are eternal believers in the power of the entrepreneur and are convinced the next wave of great companies are being formed by them as we speak.
We are eternal believers in the power of the entrepreneur and are convinced the next wave of great companies are being formed by them as we speak.
As we went into the post-2008 era, the venture industry was being transformed. The craftsman model of an investor working closely with a handful of entrepreneurs was becoming rarer. The industry moved to an assets under management model where big teams made lots of investments every year. As many of our peers raised mega-funds, it took courage and discipline for us to stay focused rather than follow the crowd. We raised a similar size fund every four years and invested in thirty companies per fund. We primarily led Series A investments and were comfortable with the fact that the companies we invested in will evolve. We worked hard to help the founding teams scale their business and kept our eye on the long term. This consistency in our strategy enabled us to deliver top-tier returns on our last four funds and put us in a strong position to raise our most recent ones. It also helped us attract and retain the right kind of people to our team – former entrepreneurs and operators who are passionate about company building. We have found that the clarity gained in tough times serves you well in good times. We are confident that the hard decisions founders are making today will help them build enduring companies.
We have found that the clarity gained in tough times serves you well in good times. We are confident that the hard decisions founders are making today will help them build enduring companies.
Over the last decade, we all benefited from the impact of industry inflection points such as mobile, cloud, social, and big data. Going forward, we are excited about innovation trends such as the future of work, biology as technology, human-centered AI, the renaissance of silicon, the rise of the developer, user-centric privacy & security, next gen consumer brands, and many more that will emerge. We will continue to invest in companies serving the enterprise, consumer and engineering biology sectors. Even though we have a prepared mind on future trends, we always make sure to treat every new entrepreneur as an adventurer who will help us climb a new hill. We believe having a prepared mind coupled with an open mind is essential.
Our motto is people first. We live by it everyday. This means combining radical candor with being loyal to a fault when we interact with entrepreneurs. This means prioritizing teamwork in making investment decisions. This means valuing everyone at our firm from the receptionist who greets guests, to the administrative staff who support us, to the finance team who provide the financial infrastructure, to our portfolio services team who amplify the impact of our companies, and most importantly, the entrepreneurs who (physically and virtually) walk through our offices and make us excited to come to work every day.
Being people first also means being a responsible member of the community, which has never been more important than today. We have a long tradition of philanthropy through our Mayfield Fund Foundation which supports local and global organizations that address health issues such as Lucile Packard Children’s Hospital and Stanford Medicine, food & literacy programs such as Second Harvest and Akshayapatra, and diversity-focused groups such as the Anita Borg Institute. We are especially proud of our Mayfield Fellows program at Stanford University which is entering its 25th year and has fostered entrepreneurship among hundreds of students. We are continuing this tradition for needy organizations today such as those assembling medical supplies for healthcare workers in New York and local community organizations for children.
Our motto is people first. We live by it every day.
We realize that we are in the midst of unforeseen challenges. Reality is changing every day. We believe it’s time to lean forward, as fear is the only thing that limits one’s potential. Economic crises can have a Darwinian effect — the fittest companies will adapt, survive and emerge dominant into a world with less competition.
We believe it’s time to lean forward, as fear is the only thing that limits one’s potential.
So if you are an entrepreneur who is looking for a committed and experienced venture investor who has partnered with successful entrepreneurs that have achieved 117 IPOs and more than 200 acquisitions and learned some life lessons over their 50 year history, our doors are open. Looking forward to our journey onward to a People-First future together.
— Navin Chaddha
