The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: Benchmark's Peter Fenton on The Single Question That Defines The Art of Early Stage Venture, Marketing Timing Risk, Why The Oversupply of Capital Is Good & His Biggest Lessons from 12 Years On The New Relic Board

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Mar 29, 2021

Peter Fenton, General Partner at Benchmark, discusses his impressive track record in venture capital, including investments in notable firms like New Relic. He shares how a casual golf game sparked New Relic's Series A investment, illustrating the importance of trust in startup relationships. Fenton dives into the nuances of market timing and the concept of 'unlocking consumption' in today's investment landscape. Lastly, he reflects on the positive aspects of capital oversupply and how it can enhance innovation and collaboration within the venture ecosystem.

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ANECDOTE

Golf Course Series A

Peter Fenton and Lew Cirne discussed New Relic's Series A over golf and drinks.
Cirne, having achieved financial freedom, initially didn't want investors or a board.

ADVICE

Building Trust and Safety

Build trust with founders by creating a safe space for vulnerability.
Show compassion and view bad news as a learning opportunity, not a judgment.

INSIGHT

Unlocking Consumption

Early-stage venture capital success hinges on unlocking latent demand.
Identify potential energy in a market and make it kinetic through an easy-to-use product.

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Peter Fenton is a General Partner @ Benchmark, one of the great venture firms of the last 3 decades with a portfolio including the likes of SNAP, Twitter, eBay, New Relic, Stitchfix and many more. As for Peter, he has led deals, sits or has sat on the boards of Elastic, New Relic, Digits, Docker, Optimizely, Yelp and Zuora to name a few. Prior to Benchmark, Peter was a General Partner @ Accel Partners in San Francisco. As a result of his incredible track, Peter has been on the Forbes Midas List more times than I have done podcast episodes!

In Today’s Episode with Peter Fenton You Will Learn:

1.) How a round of golf led to Peter Fenton leading the New Relic Series A? What did the deal look like both in check size and valuation? What does Peter think that round would be in today's market?

2.) How does Peter create an environment of safety with entrepreneurs where they feel they can be vulnerable with him? How does Peter approach building relationships of trust in compressed fundraising timelines? In what way has Peter seen relationships go bad? What can been done to mitigate that and optimise the Founder VC relationship?

3.) How does Peter assess market timing when making investments today? What does Peter mean when he says, "you have to understand whether you are unlocking consumption"? What does unlocking consumption look like in reality? How does Peter think about positive or negative externalities that could impact the business?

4.) Does Peter agree with Bill Gurley that the biggest challenge today is the "oversupply of capital"? Where does the oversupply of capital become a real challenge? What does Peter advise growth-stage founders do to prevent this from damaging them? How does Peter think about capital efficiency in the companies where he is on the board?

5.) What were Peter's biggest lessons on what it takes to be a great board member from his 12 years at New Relic? How did he see his style of board membership change? On the founder side, how do the very best founders manage and navigate their board? What do most boards misunderstand or mismanage?

Item's Mentioned In Today's Episode with Peter Fenton

Peter's Favourite Book: Nonviolent Communication: A Language of Life

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