Why Greylock capped its new fund at $1.5B when it says it could have raised more

In a bold move that sets it apart from many leading venture capital firms, Greylock Ventures has opted to raise a $1.5 billion fund, its 18th, despite the industry's trend towards ever-larger fund sizes. This amount represents a significant 50% increase from the firm's previous $1 billion fund launched in 2023, and aligns closely with the capital raised during the pandemic across both seed and flagship funds. Saam Motamedi, a partner at Greylock, shared insights with TechCrunch, revealing that the firm had the capacity to raise a considerably larger amount but chose to exercise restraint. 'Our mission is to be the most important partner to the most important entrepreneurs,' he stated, emphasizing Greylock's commitment to providing focused support to its portfolio companies. Greylock prides itself on its ability to connect startups with top talent and potential customers. A notable example is Baseten, an AI infrastructure startup that has skyrocketed to a valuation of $13 billion since Greylock's initial investment during its Series A in 2022. However, Motamedi pointed out that such substantial backing is only feasible by limiting the number of companies in their portfolio. With ten partners, Greylock typically makes just one or two new investments each year, leading to an anticipated total of around 25 portfolio companies from this new fund. The new fund will maintain Greylock's historical focus on nurturing early-stage companies, particularly in seed and Series A funding rounds. The firm has built a strong reputation in this domain, having played a critical role in the inception of companies like Palo Alto Networks and Abnormal, the latter of which was valued at $5.1 billion after being incubated by Greylock in 2018. Despite its early-stage emphasis, Greylock does not completely shun later-stage investments. Motamedi noted that the firm considers high-potential companies even if they missed the opportunity to invest in them earlier. The previous fund included investments in growth-stage firms such as Anthropic, Revolut, and Wiz. Notably, Greylock's investment in Anthropic occurred during its Series F, which was valued at $183 billion, marking the largest investment in the firm's history. Motamedi estimates that about 15% of the new fund will target later-stage startups, but he reaffirms that Greylock's core identity remains as an early-stage investor. He illustrated this by explaining that during their weekly partner meetings, discussions primarily revolve around individuals rather than companies, highlighting their focus on building relationships even before a startup is founded. 'It’s really a bet on the person,' he remarked. 'Often the company doesn’t even exist.'