Greylock Partners announces fresh $1 billion fund

SAN FRANCISCO — Venture capital firm Greylock Partners has raised a $1 billion fund. Partners David Sze and Reid Hoffman announced the closure of its 14th fund onstage today at TechCrunch Disrupt.

David Sze is a full-time partner at Greylock. Reid Hoffman is the billionaire cofounder of LinkedIn who joined Greylock in 2009.  Together, these two influential investors have led the funding of public companies like Facebook and Pandora.

They sat down with Michael Arrington to chat about the firm, its funds, and its plans.

“We spent about half of fund 13,” Sze said. “Seed and A round investments represent 84 percent of our investments, and with this fund we can be more aggressive about supporting follow on rounds.”

Hoffman said the firm won’t necessarily invest $1 billion; this is the capital commitments that the firm could spend.

“It’s up to us to be good custodians,” Hoffman said. “The cost of doing software startups has gone [up] so far, and part of why we have a job is to sort which can work and which won’t, which of those have potential or possibilities early and can grow into something industry-transforming.”

Sze said that Greylock analyzed its decision-making process to gain more insight into the connection between the firm’s votes and company outcomes.

“When we all voted a company was bad, it was bad,” Sze said. “The interesting thing was when we all loved it, the returns were mediocre. Its the ones in the middle with lively debate that have the big outcomes.”

Greylock recently announced that it is dedicating a $100 million of its funds to online marketplaces.