Lessons from Peter Fenton

Peter Fenton, a general partner at the venture capital firm Benchmark, is renowned for his early and successful investments in companies like Twitter, Yelp, and Zendesk. Over the years, he has shared a wealth of knowledge on venture capital, entrepreneurship, and building impactful companies.

On Venture Capital and Investing

On the core of venture capital: "Venture is a shoe-leather business, you can only be great if you are out looking engaging and hustling." [1]
On investment decisions: "If you're investing in a company because of its business model, I'm not so sure I should trust your instincts. If you're investing because of the people, I think we should invest." [2]
On valuation: "Never turn down a company on valuation. It's a mental trap, and allows for weak thinking." [1]
On the nature of the business: "This firm [Benchmark] destroys the idea that you are better than anyone else. As soon as you start to think that, you get destroyed." [1]
On finding the next big thing: "Once every 5-7 years, a company emerges that changes not just the technology industry, but the world." [3]
On his investment style: Fenton's investing style has been summarized as, “Wait until right before the company's rising 'adoption curve' meets the declining 'risk curve.'” [4]
On the importance of people: "It centers almost entirely, at least in my case, on the quality of the entrepreneur." [5]
On risk: "So when I look at an investment... we of course have risks in our mind around things that could go wrong. But we don't obsess on them in a way that's like staring at the guardrail when you're driving." [5]
On market timing: He reflects on the observability market in 2008 when New Relic's Series A took place, noting the perception of the developer tooling market as limited in potential. He highlights the importance of unlocking consumption and tapping into latent demand with a compelling product experience. [6]
On the long-term perspective: "You must be long-term and short term-focused. Bite off what you can chew, while having in the background, the most absurdly radical ambition. It's insanely hard to keep both. If you only focus on the long term, you lose your team and investors. If you only focus on the short term, you lose your purpose." [1]
On open source: "In open-source in general, the power lies in connecting the author of the software directly to users, eliminating the middleman." [3]
On product quality in open source: "If you don't have the best product, you're not going to make it in open-source." [3][7]
On learning in venture capital: "I think that's one of the great assets that we can bring is that curiosity to a company." [8]
On humility in VC: "One of the things we aspire to do in our business is to accept humbly that we don't know a whole lot. But, we do have an ability to learn quickly." [8]
On the changing landscape: "What Google did in Web 1.0 was take a feature, which was search, and built an entire business around that utility. In Web 2.0, Twitter took a feature, which is sharing, and built a utility that allowed people to do that on a massive scale." [3]

On Entrepreneurs and Founders

On founder motivation: "Is the founder's joy insatiable, or does it end when they get their private jet? The outcome probabilities have to have a human story." [1]
On character over experience: "Experience is a weak proxy for character." [1]
On founder-investor fit: "No one picks you cause you're better at anything, they are gonna pick you because of who you are. It's a career bet for them." [1]
On authenticity: "If you tap into what is deeply your expression, and it's truthful, a great entrepreneur will respond to that level of depth." [1]
On self-awareness: "Acute self-awareness reveals what you need as your partner. I think that self-awareness is humbling, because you have to admit what you're not great at, and then you have to play your game." [8]
On attracting talent: "The ability to attract great people. It's not as simple as build a great team." [8]
On the entrepreneurial mindset: He looks for founders who are "not likely to profoundly change the world" if they are "very much in the linear mindset." He seeks a "fearsomeness" and a sense that "this person oh my god you know I'll never be able to control this." [9]
On the importance of starting: "The most important advice I have for people founding companies is so simple and stupid is just start... take the first step." [10]
On founder resilience: "Great entrepreneurs I think you know uh tend to thrive in these more stressed environments." [2]
On the best time to be a founder: "It's much better to be a founder now than I'd say four years ago or 5 years ago." [10]

On Leadership and Building Companies

On the role of a director: “One of the roles of a director is truth, and truth seeking. Truth seeking is almost never socially rewarded. You don't make someone feel good if there's a truth they don't want to see. The relationship side of the business is important, but isn't what creates greatness. What creates greatness is truth seeking.” [1]
On decision-making: "CEOs that freeze in decision making quickly cause politics in their teams." [11]
On resolving conflict: Fenton and former Polyvore CEO Jess Lee discussed resolving differences and conflicts between founders, executives, and directors, with Lee explaining that differences of opinion can be productive. [11]
On the danger of inaction: In a discussion with Jess Lee, Fenton highlighted the danger of inaction for CEOs. [11]
On focus: "We should be elevating consciousness for the entrepreneurs we work with around the stuff that really matters, and we shouldn't elevate the stuff that doesn't matter." [1]
On purpose: "I don't believe anyone mechanically forces their purpose on the world. I think you are responsive in a way." [12]
On storytelling: "I think we are storytelling animals. Our narratives carry not just an interpretive power in our experiences, but they can shape those experiences." [12]
On building a team: He emphasizes the importance of a company's scale and the attraction of top talent. [6]
On board dynamics: He stresses the importance of creating trust and safety with entrepreneurs and acknowledges the challenge of establishing trust within a governance structure like a board. [6]
On embracing what doesn't scale: Fenton's approach at Benchmark focuses on deep relationships over scaling, believing that depth beats breadth in VC success. [13]

On Life and Career

On personal growth: "I've found that experiences that break out of your common patterns, that are perhaps uncomfortable at times but invite something outside your day-to-day routines, can awaken that sense of purpose." [12]
On seeking new experiences: "My advice to young people is to seek experiences that will allow that [sense of purpose] to rush in." [12]
On career choices: When given the advice to pursue his passion for venture capital, the advice was: "Listen. if you have really a you know sense of awe like butterflies in your stomach that that wonder of like wow that would be great for me you got to do it. and you got to do it now." [14]
On curiosity: "As a philosophy major... I actually view philosophy as a provocation to go into any of the subjects of the university and then ask the question of why." [14]
On empathy in venture capital: His father, also a venture capitalist, told him "there's a way to do this job more empathetically with more compassion and more to be more relatable to the entrepreneurs." [14]
On finding your calling: "If you're lucky I think in a life you you find something that has a purpose that is insatiable. it's not extrinsic it's not you know if I achieve this if only then I'm going to have that." [2]
On mentorship: He learned by observing and internalizing the styles of more experienced board members, making those learnings true to himself. [2]
On overcoming insecurity: Early in his career, he felt inadequate and questioned why anyone would want to work with him. [2]
On embracing the journey: "The idea that you have to do A before B before C it's like you know just just go and and go get a job and venture whatever job you can get." [14]
On competition: "One of the attributes of I think many of the successful career venture capitalists are they are hyper curious and hyper competitive. and competitive doesn't mean necessarily beating the person next to you oftentimes you know the biggest competitor we have is ourselves." [14]
On the power of narrative in life: "As I look back at my time at AMIGOS, there's that narrative impact of the story I tell myself. I perhaps over-remember and amplify the aspects that I most enjoyed." [12]
On personal transformation: Speaking of his time in the AMIGOS program, "By blowing up that construct, it allowed me to have so much personal growth and perspective. And I don't think that my life would have been the same without that having happened." [12]
On the value of discomfort: He recommends experiences like the National Outdoor Leadership School (NOLS) where you learn in a "liminal state from the comforts that you leave behind." [12]
On authenticity in expression: "Authentic is what you'd find in a great poem." [1]
On the human element: "My own investment style evolved from a truth: there are parts that activate you uniquely, where you lose your sense of self... I'm principally relating to a human being. That's what compels me.” [1]

Learn more:

Lessons from Peter Fenton

On Venture Capital and Investing

On Entrepreneurs and Founders

On Leadership and Building Companies

On Life and Career

Written by Antoine Buteau

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