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Yet another investor is stepping down at Greylock Partners, the 50-year-old venture capital firm that is famous for an investment in Facebook but which has struggled to hand the wheel to a newer generation of investors.
John Lilly became the third high-profile person to leave full-time employment at Greylock within the last year. Lilly, the former CEO of Mozilla, said on Thursday that he would no longer be a general partner at Greylock. He is energized primarily by politics these days and plans to spend most of his time on political initiatives.
Venture capital firms rely on small, tight-knit partnerships to agree on which startups to back, so it’s not a great sign when you see a steady exodus of talent. Much of a firm’s success requires personal chemistry and long relationships. Greylock has long been seen as one of the most storied investing firms in technology, with decades of history and business titans like LinkedIn co-founder Reid Hoffman in its leadership.
But more than other firms, Greylock has had some challenges finding the right personnel to steer it, sources say. Succession planning is a classic problem in Silicon Valley.
In addition to Lilly, Greylock’s highly regarded head of talent, Jeff Markowitz, said last month that he would be leaving his role at the firm for a job directly advising Google CEO Sundar Pichai — a plum gig, for sure, but one that also was a huge blow to Greylock given his stature. (He’ll still advise the firm.) In addition to serving as the firm’s talent partner, focusing on recruiting, sources say Markowitz sat on Greylock’s management committee.
Josh Elman, a general partner with prior stints at Facebook and Hoffman’s LinkedIn, last year left as a Greylock general partner for a VP role at Robinhood, the stock-trading company. That was about a year after Greylock lost a different general partner, Sarah Tavel, to rival VC firm Benchmark.
The sample size is small, but that’s a lot of turnover for a small partnership.
Greylock has added one general partner since Tavel’s departure in May 2017 — an internal promotion.
The firm by all accounts is still doing well financially: It owns a small sliver of Airbnb, which is valued at $31 billion and should return hundreds of millions of dollars to Greylock when it eventually goes public. Other holdings that could pay off well include Aurora, Nextdoor, and Discord. One particular star, by all accounts, is general partner Asheem Chandna.
Greylock said it had distributed $2 billion to its own investors — its limited partners — since 2015.
But the talent losses have stacked up a bit now. The firm’s consumer practice in particular could use new people to help Josh McFarland, who the firm hired from Twitter as a general partner in late 2016.
Greylock’s leadership has slowly been trying to pass the reins to this younger generation. Hoffman, one of Silicon Valley’s biggest celebrities, typically does one or two deals a year but is spending much of his time now on politics — becoming one of the Democratic Party’s largest and most controversial contributors in the age of Trump. David Sze, who led the firm’s landmark investment into Facebook back in 2006, has only made two new disclosed investments in the last three years and has been gradually scaling back at the firm.
The firm’s other leader, James Slavet, invests but is focused on internal operations.
Lilly, for his part, is a longtime friend of Hoffman’s and had been at Greylock for eight years. But in the wake of the Democrats’ convincing but to him slightly disappointing results in the midterms, Lilly felt he had to dedicate himself more to activism and told the firm of his plans last week.
“For those of you who know me personally (or via Twitter, I guess!), you know that I care an awful lot about improving the state of our country and world,” he said, “and it’s crystal clear that 2019 & 2020 are crucially important years — certainly the most important time in a generation, but maybe much longer than that.”
This article originally appeared on Recode.net.
