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 Benchmark uses the phrase long term greedy and is not judged on IRR.
“We have a phrase that not all the partners like to use, say we're long term greedy. You know, we're luckily in a business where we're not judged on IRR per se.”
Gurley says Benchmark turns down twenty percent IRR opportunities because LPs invest for beta and home runs, not steady returns.
“Like if there's an opportunity where we can make a 20% IRR someone might go, oh you should do every one of those, but we're limited by the number of board seats we can take and our LPs are investing in us to get beta and so they want the home runs”
Gurley explains Benchmark isn't judged on IRR and would pass on 20% IRR deals due to board seat limits.
“You know, we're luckily in a business where we're not judged on IRR per se.”
Gurley calculates five-year delay from year ten to fifteen requires $160 instead of $100 just from compounding cost.
“Let's say you were expecting to get a $100 back from investment in year ten and you wanna delay it to year fifteen.”