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This is Benchmarkâs website.
Itâs just one page.
No scrolling.
No âcontact usâ.
No âapply for investmentâ.
No âabout usâ.
Nothing.
But they can get away with it.
Itâs Benchmark.
The firm was early to Asana, Docker, Dropbox, eBay, Friendster, MySQL, OpenTable, Optimizely, Snap, StitchFix, Twitter, Uber, WeWork, Zendesk, Zipcar, and Zillow, to name just a few.
The firm and many of its partners past and present are iconic â Bruce Dunlevie, Bob Kagle, Andy Rachleff, Bill Gurley.
Heck, Gurley was immortalized in the Showtime TV series Super Pumped, on the battle for UBER.
Since its founding in 1995, the firm has lived up to its name and intention, becoming the benchmark in venture capital.
The firmâs brand is so strong that they now consider investments through warm referrals and by invitation only.
They donât have issues with deal flow.
But chances are, you are not Bill Gurley and your firm is not Benchmark.
If youâre a new venture capital firm, you canât afford to sit on your hands like Kevin Costner in Field of Dreams, and expect that if you build it â a one-page website like Benchmarkâs â that they will come.
And hereâs why.
There are thousands of increasingly global venture capital firms in the world competing for the best deals. And if you subscribe to StrictlyVC, youâll notice that several new funds are closing each and every week, even in a down market like the one we find ourselves in 2023.
Historically, 50% of venture funds donât return 1X their investorâs money.
Over the past 20 years, the average firm has failed to beat the NASDAQ Composite (12% annual return).
Heck, 25% of firms didnât even beat the S&P500 annual return (6.79%) over the ten years to 2018, a boon period for tech startups.â
Data Source: Cambridge Associates
The best founders want to work with trusted brands.
As a new firm, chances are youâre not one.
You need to do everything you can to build brand awareness and reputation, if you are to stand a chance of getting on the cap table of the handful of great companies that generate the lionâs share of venture returns.
As our analysis of the best venture deals in US history below shows, unless you have a solid brand, youâre unlikely to get in on the seed, series A, or series B rounds of companies that can return a fund not just 3X over, but 10X+ over.
Data Source: Crunchbase
Except for Benchmark, our analysis of VC deal flow and website traffic finds that the firms with the busiest websites also happen to be the best-performing firms.
There are numerous reasons for this, but firms like a16z, FirstRound, Bessemer, Blackbird, and numerous others are investing heavily in content to build brand awareness, relationships, and drive inbound dealflow.
The worldâs biggest and most successful incubator, Y-Combinator, has incubated well over 3,000 companies. But its 137 Top Companies (5%) account for most of its returns. And if YC missed out on just three companies, Airbnb, DoorDash, and Stripe, more than half of its Top Companies returns would be wiped out.
Data Source: Y-Combinator
The cost of content is tiny relative to management fees, but the potential upside is almost uncapped.
Letâs say youâre a seed stage fund and spent just $200,000 over three years on a modest content strategy with the subsequent visibility and brand leading to a $1M investment in one seed stage company whose valuation grew by 10X.
At a $10M seed valuation, your 10% ownership stake, undiluted, would be worth $10M at 10X. Assuming a 20% carry, you would have made $2M for the firm on the back of a $200K investment.
You might have unique expertise in your chosen sector. You might have a secret sauce that can help your startups succeed. But unless they know this and believe it, itâs kind of pointless.
In a sea of venture firms, having a truly valuable differentiator can be key to building relationships with other firms, and getting the best deal flow.
Content can help you package your value add and broadcast it to the world in a way thatâs compelling and not self-promotional.
Whatâs the alternative? Attend countless conferences, spending tens of thousands of dollars in the process, taking days and weeks out of your calendar, to shake hands, exchange business cards, and probably not hear from anyone ever again?
Not only that, but if you fail to build a solid brand you might get deal flow, but it will all be bad deal flow. Youâll have to plow through hundreds of terrible and unsolicited emails, messages, and pitch decks, making it almost impossible to do your job and driving you crazy in the process.
Most funds fail to raise a Fund II. Thatâs because Fund I performed so badly that it sacrificed the trust of existing LPs and signaled to the market that this fund manager doesnât know what theyâre doing â steer clear.
As a first-time fund manager, you need to get early runs on the board â markups, to build confidence amongst existing and prospective investors to help you raise a second, third and fourth fund and build a truly enduring VC brand.
Content might seem like a nice to have, but if you are in the business of VC, and you are a new firm with no real brand yet, itâs hard to see it as anything other than a must.
Get more content marketing insights for VCs at SonicBoom.vc
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Steve Glaveski is on a mission to unlock your potential to do your best work and live your best life. He is the founder of innovation accelerator, Collective Campus, author of several books, including Employee to Entrepreneur and Time Rich, and productivity contributor for Harvard Business Review. Heâs a chronic autodidact and is into everything from 80s metal and high-intensity workouts to attempting to surf and hold a warrior three pose.