Navin Chaddha, the storied investor running Mayfield Fund, doesn’t want to be running a billion-dollar fund like many of his peers. “Everyone wants to be Sequoia or a16z,” he said, in an interview with TechCrunch. “We want to be who we are: just copying somebody else is strategy for disaster, strategy for failure.”
“We could have raised $2 billion, but what will we do if we don’t believe in it -- you just need a billion to be called a unicorn VC fund? There’s no such need, “Chaddha said.
He’s getting closer to riding a unicorn, nonetheless.
Mayfield Fund announced today that it has raised a total of $955 million across two venture capital funds: $580 million Mayfield XVII, which will back seed and Series A companies, and $375 million Mayfield Select III, which will back Series B companies. The new capital comes after Mayfield has invested in more than 550 companies across 120 IPOs and 225 acquisitions. Top investments include Poshmark, which was acquired by Naver for $1.2 billion; Mammoth Biosciences; Lyft; and SolarCity, which was acquired by Tesla.
Despite an increase in capital, Chaddha says that Mayfield’s goal will not change -- they still back roughly 30 companies per fund, and stick largely to early-stage companies. The consistency is part of why he thinks they lost no LPs in this fundraise, despite a dark economic backdrop that has some venture investors struggling to close. Today’s pair of funds closed in less than a month, with a 10% carve out allocation for new LPs.
It’s good timing: Mayfield only made six investments in 2020. Less than halfway into 2023, Mayfield has already made six this year, four of which are in AI companies. The capital, Chaddha explains, will be used to ramp up the firm’s investment cadence in a more realistic market. He also admits that Mayfield has missed out on a lot of opportunities because of high valuations, but that he’s okay with it.
Chaddha, who has been on the Midas List 15 times (almost as many years as he’s been running Mayfield Fund), is exuberant, but in a calm, authoritative way. One of the things he asks founders during initial meetings is where they see themselves 10 years from now, he tells me. “If the answer is, I’ll be in my third company, it’s a pass for Navin,” Chaddha said. Mayfield likes backing founders who think that their company will be their last job, he said.
As Chaddha described a culture at Mayfield of not wanting to get lost in “FOMO” and stay disciplined, the firm has clearly responded to higher prices and pricier valuations. Today’s duo of funds are 27% larger from Mayfield’s last pair of funds, announced back in March 2020, and up 82% from the pair before that.
Mayfield allocates 1% of fees to help sponsor students from historically overlooked backgrounds to land internships at tech companies. The firm also has a summer fellows program. These two programs show a focus on diversity, but the firm is still behind, Chaddha admits. Mayfield doesn’t yet have a female partner, for example. “I think the diversity of age, background and gender is very, very important. But at the end of the day, you can't just make somebody a partner. We are behind in the last few years because of COVID. It's been hard.” He said that Mayfield plans to hire aggressively in the next two years, including for at least one new partner role.
“History has shown that when public markets are at their peak, venture funds are the worst performing,” Chaddha said. “When public markets come low, and when you invest over those years -- the period we’re in right now -- those are the golden years. It’s time to lean forward.”