By Alex Konrad
October 23, 2024
Mark Goldberg, Ethan Kurzweil and Kristina Shen left top jobs at blue chip VC firms to launch Chemistry, a new equal partnership focused on backing Series A startups.
After quitting his partner job at venture capital firm Index Ventures in a surprise move last December, Mark Goldberg headed out on holiday vacation with his family, promising his wife that no work call would interrupt time with their two small kids. Then, like clockwork, Ethan Kurzweil rang. “This is an exception, a friend calling!” Goldberg, 39, insisted. He picked up.
But Kurzweil, a partner at another established firm, Bessemer Venture Partners, wanted to talk shop – more specifically, a seed that Goldberg had planted weeks before, that perhaps they should team up. “I can’t stop thinking about this,” Kurzweil, 45, told him. “This idea is like sand between my toes.”
Their next call was to Kristina Shen, a former colleague of Kurzweil’s and a partner at a16z. Shen, 37, had first heard about Goldberg’s plans in the final days before heading to the hospital for the birth of her third child; now, she was atop both of Goldberg’s and Kurzweil’s lists for a third cofounder. “It’s a little crazy, but this is the time,” Goldberg pitched. “Let’s go play offense with a focused fund.”
Over the next couple of months, the trio graduated from weekly catch-ups to a daily WhatsApp channel, mock investment discussions and, after what the partners estimated was 200 hours of test collaboration, a multi-day offsite at Stinson Beach, north of San Francisco, where they fully committed. Axios first reported on their plans for a new firm in April.
“It’s incredibly rare for people to come together who are in the right stage of their career to do this,” Shen said. “It felt obvious.”
The result is Chemistry, a new venture capital firm that has raised $350 million for a debut fund. An equal partnership between Goldberg, Kurzweil and Shen, Chemistry will focus on early-stage investments, especially at Series A, in mostly business-to-business startups in areas like fintech, work software and developer and infrastructure tools. Chemistry will look to make concentrated, hands-on bets with the fund, with each partner backing about two or three companies in each of the next three years.
Chemistry’s pitch: offer founders the experience and track records they’d expect from a bluechip VC firm, with the extra attention that can be difficult to consistently receive from a larger fund. All three investors can leverage that big-firm experience, they said, without the bureaucracy of a more complex, multi-stage firm with dozens of active investments (which Goldberg described as “running with a parachute on your back”). “Founders are like, ‘oh wait, you can actually just make this intro and not have to triage it by asking 10 people internally first,” said Shen.
Chemistry’s partners bring a long track record of startup successes to the new fund. While at Bessemer, Kurzweil, the son of famed futurist Ray Kurzweil, invested in unicorns LaunchDarkly and Intercom, as well as now-public PagerDuty ($1.7 billion market cap) and Twitch, acquired by Amazon for just under $1 billion. At Index, Goldberg invested in unicorns Persona, Pilot and Plaid, as well as Bridge, the crypto startup that Forbes first reported was recently acquired by Stripe for more than $1 billion. Shen, an alumna of the 2016 Forbes 30 Under 30 list for venture capital, sourced ServiceTitan, the service management provider valued at nearly $10 billion, while at Bessemer. Later joining a16z, she was an early investor in unicorn Pave, startups Tennr and Wrapbook, as well as Decagon, a startup offering AI agents for customer service that recently raised $65 million.
Northwestern University has signed on as a limited partner, as have Howard Hughes Medical Institute and TrueBridge Capital Partners. Chief investment officer Amy Falls said that it was rare to see a first-time fund with the combined track records of Chemistry’s trio. “We were particularly impressed with the very thoughtful approach from having three different people with different DNAs, coming from different fund styles, that could work together,” she said. “That felt very powerful.”
The obvious, if aspirational comparison for Chemistry would be Benchmark, the storied firm that has managed an equal partnership across a rotating cast of investors across the past three decades, most recently raising a $425 million fund in June. Other relatively smaller partnerships, including Midas List investor Fred Wilson’s USV in New York and the Bay Area fund Amplify, also served as inspiration, the partners said.
Founders who worked with each investor credited Goldberg for his relationship skills and high-quality introductions, Kurzweil for his stabilizing presence and market insights, and Shen for her always-responsive hustle. “She was the closest thing I had to a cofounder for a year and a half, talking pretty much every single day,” said Matt Schulman, CEO of compensation manager Pave, who counted both Shen and Goldberg, who invested later, as board members. “I was definitely sad when I heard the news they were leaving us. But when I found out they were working together, I thought, ‘hell yeah, this is amazing.’”
The challenge for Chemistry, Falls and industry peers noted, will be for the firm to prove that its partners can work well together over a long period, while winning deals head-to-hand against the greater firepower of established firms like those they left. Many emerging managers or first-time funds start small, collaborating with bigger players before moving up to competitive lead checks. But Chemistry is sized to go head-to-head from the start.
Esteban Castaño, cofounder and CEO of blockchain intelligence firm TRM Labs, said he’d taken investment from Bessemer specifically because of Kurzweil and his experience. “If you’re in Silicon Valley longer than a year, you’ll soon see dozens of startups that have been backed by the fanciest brands and still died,” Castaño said. But he agreed that for particularly early-stage or less experienced founders, top tier VC firms carry brand clout. “It’s extremely tempting, because you desperately want an easy button. The unfortunate reality is that there is none,” he added.
Chemistry’s partners conceded that it might be more difficult to immediately impress founders unfamiliar with their reputations. “Our awareness as a fund is virtually zero today, and we’re used to having call cards that people recognize,” Goldberg said. Chemistry will look to build that reputation by initially investing in startups “where we have a good shot of winning,” Kurzweil added, before branching out
The new firm hopes to add two or three partners over time, but the trio said they will need to balance that growth with the danger of getting sucked into competing with multi-stage, multi-billion-dollar funds. That means not increasing fund sizes too much, Chemistry’s partners said, and drawing a line at investing in later-stage deals.
“You have to play the game in front of you, but we believe that by being focused, we can play that game better,” said Shen.
As for whether Chemistry’s partners can work together, that’s what all those hours of debate were for, they said. Then, there’s a leap of faith. “It takes a lot of guts to leave a top-tier fund in the first place,” said CEO Michelle Valentine, a former colleague of Goldberg’s whom he later backed through her tax compliance startup, Anrok. “They’re basically jumpstarting the process, and that is a risk,” added Northwestern’s Falls. “It just means we’ll know sooner if they can make the leap or not.”
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