Discord and Mercor investor Niko Bonatsos departs General Catalyst, plans new VC firm

Niko Bonatsos, who has played a pivotal role in shaping the seed investment strategy at General Catalyst, has officially announced his departure from the firm. Renowned for his investments in promising companies like Discord, which is eyeing an IPO, and the $10 billion startup Mercor, Bonatsos shared with TechCrunch his plans to establish a new early-stage venture capital firm in collaboration with a group of close colleagues. His exit marks a significant moment for General Catalyst, which has recently diversified its approach beyond traditional venture capital. The firm has introduced a wealth management division and initiated strategies that include private equity-style AI roll-ups and a Customer Value Fund (CVF) aimed at providing non-dilutive financing to late-stage startups based on their recurring revenue. Bonatsos is not alone in his departure; he joins a wave of recent exits from General Catalyst, including notable figures such as Deep Nishar, Kyle Doherty, and Adam Valkin. While many of his peers have opted not to comment on their exits, Bonatsos characterized his departure as a mutual decision, expressing gratitude for his time at the firm, which he described as an 'awesome experience' that offered invaluable insights. Though he has not yet settled on a name for his new venture or initiated fundraising efforts, Bonatsos hinted at recruiting top-tier founders and investors for his team. He is particularly passionate about supporting young entrepreneurs, recognizing a trend he identified years ago that has now gained momentum in the industry. This focus on youth aligns with the current landscape where many influential AI founders are young innovators, including college dropouts like Mercor's Brendan Foody. Additionally, Bonatsos aims to invest in consumer business founders, a niche he perceives as 'underappreciated' amidst the prevalent emphasis on enterprise-focused AI startups. While General Catalyst evolves into what it terms an 'investment and transformation company,' it continues to engage in seed-stage investments, recently enlisting Yuri Sagalov, a former partner at Y Combinator, to spearhead its U.S. seed investing efforts.