Emergence Capital hasn't lost a single partner in 22 years. Here's how other VC firms can fix their 'revolving doors,' according to an investor

Emergence Capital, a prominent venture capital firm based in San Francisco, has made headlines with an impressive statistic: it has retained every one of its partners for the past 22 years. In an industry where turnover is increasingly common, this achievement raises questions about how other firms can address their own partner retention challenges. The venture capital landscape is fraught with anxiety as partner departures can lead to significant losses for firms and the startups they support. When a partner leaves, they often take with them vital relationships, deal flow, and crucial knowledge, leaving a void that can disrupt portfolio companies at critical moments. Emergence Capital has positioned itself uniquely in this context, having invested in industry giants like Salesforce, Zoom, and Box. With a firm belief in the potential of artificial intelligence, Emergence has backed innovative companies, including the $3.3 billion LLM infrastructure platform Together AI, and the $2 billion AI hiring firm Mercor. The firm’s model involves a compact team of just seven investment partners managing approximately $3.2 billion in assets, including a recently closed $1 billion fund. Since its inception in 2003, Emergence has seen only nine investing partners, with only two retiring. Remarkably, no partner has transferred to another firm, a stark contrast to the common 'revolving door' seen in many VC firms today. Kevin Spain, a general partner with 17 years at Emergence, attributes this retention success to a deliberate and thoughtful firm structure. The firm has established clear pathways for promotions and a fair distribution of deal economics, fostering a sense of long-term commitment among partners. Spain highlights that when a team member is promoted to partner, it comes after years of close collaboration, creating a bond of mutual understanding. Emergence's investment strategy is characterized by a high-confidence, low-volume approach. Each partner typically engages in only one or two new investments annually, allowing them to build deeper relationships with the founders they support. This strategy contrasts sharply with the common practice of spreading investments too thinly. To ensure thorough diligence, Emergence mandates that every partner conduct their own primary research on potential investments, cultivating a rich array of perspectives in decision-making. This collective ownership of investments enhances the firm’s culture and problem-solving capabilities, creating a supportive environment for founders. Emergence’s impressive track record speaks for itself, reporting over $8 billion in realized gains from less than $2 billion invested. Spain reflects on the importance of hard work in achieving success, emphasizing that dedication leads to meaningful outcomes. However, he notes that the success of limited partners doesn’t encompass the entire picture. Drawing from his experience at Microsoft, Spain recalls a pivotal employee survey question that predicted retention: "How would you rate the deal you’re getting?" He believes this principle applies equally to the venture capital realm, where unclear compensation and advancement paths can drive talent away. While Spain refrains from detailing Emergence’s compensation structure, he emphasizes the firm’s commitment to an egalitarian approach. This strategy allows partners to share economic benefits equitably as they advance within the firm. He acknowledges that not every VC firm can adopt this model, but warns that those with hierarchical structures risk alienating top talent, potentially pushing them toward other opportunities or even out of the industry entirely.