Greylock held its new fund to $1.5B on purpose

Greylock Ventures says bigger is not always better. On Tuesday, the 61-year-old Silicon Valley firm announced its 18th fund, totaling $1.5 billion — up 50% from its $1 billion fund in 2023, but deliberately smaller than what partner Saam Motamedi said the firm could have raised.

Motamedi told TechCrunch Greylock could have easily raised a “multiple” of that amount. Instead, the partnership chose to limit the fund as many venture firms continue to grow larger pools of capital.

“Our mission is to be the most important partner to the most important entrepreneurs.”

The logic is straightforward: Greylock says its model depends on backing relatively few startups and working closely with them. The firm’s 10 partners make only one or two new investments each year, which Motamedi said should produce roughly 25 portfolio companies from this fund.

The new vehicle will focus mostly on incubating companies from the earliest stages and leading seed and Series A rounds. That has long been Greylock’s core strategy. The firm points to company-building efforts such as Palo Alto Networks, which launched inside Greylock’s offices 21 years ago, and Abnormal, the email security startup Greylock incubated in 2018 and which was last valued at $5.1 billion.

Greylock also highlighted Baseten, an AI infrastructure startup now valued at $13 billion, after the firm first invested in its Series A in 2022. Motamedi said that kind of support — including introductions to engineers and customers — becomes harder to maintain if the portfolio grows too large.

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Still, Greylock is not limiting itself strictly to early-stage deals. Motamedi said about 15% of the new fund will go to later-stage startups the firm believes still have major upside, even if it did not invest earlier. The firm’s 17th fund included growth-stage investments in Anthropic, Revolut, and Wiz. Greylock made its first investment in Anthropic during the company’s Series F round at a $183 billion valuation.

“It’s the largest investment in the firm’s history.”

Motamedi said Greylock’s Monday partner meetings are still centered more on people than on company names, reflecting a strategy of getting to know founders before a startup even exists.

“We’re getting to know people even before they start a company. It’s really a bet on the person. Often the company doesn’t even exist.”