Gurley says Benchmark is not judged on IRR and would not necessarily pursue every 20% IRR opportunity.
“Like if there's an opportunity where we can make a 20% IRR someone might go, oh you should do every one of those,”
Gurley explains venture firms must maximize upside because IRR depends on hot cycle performance, which may accelerate collapses.
“And that's where we came up with this phrase that the best way to protect yourself against the downside is to enjoy every last bit of the upside.”