Hoffman, a co-founder of LinkedIn and a member of the “PayPal Mafia,” has decided to focus on artificial intelligence (AI), leading to his departure as a general partner for Greylock’s $1 billion fund being raised, The Wall Street Journal (WSJ) reported Wednesday (Aug. 30).
Greylock Partners did not immediately reply to PYMNTS’ request for comment.
Hoffman’s decision reflects a generational change in the venture capital industry, according to the WSJ report. This move follows similar transitions by other prominent investors in Silicon Valley venture firms, such as Michael Moritz of Sequoia Capital and Jeff Jordan of Andreessen Horowitz.
Despite stepping back from his role as a general partner, Hoffman will remain engaged with Greylock as a strategic partner and colleague, the report said. He may continue to make occasional new investments for the firm. Hoffman’s interest in AI is well-known, as he was a founding investor in OpenAI and co-founded another AI-focused startup called Inflection AI.
Greylock Partners’ new fund will be run by six general partners, according to the report. As one of the country’s oldest venture firms, it has traditionally focused on backing early-stage startups and has chosen not to raise growth funds for later-stage companies. The $1 billion fund being raised by Greylock reflects the firm’s return to the size of its previous funds, acknowledging the challenges faced by venture firms in the current market conditions.
It was reported in July that venture capital (VC) outfits are shrinking their megafunds after years of building them up. These cuts illustrate the way tech investors are scaling back their goals even as tech stocks rebound in part because of the recent AI boom, the WSJ reported July 16.
About two weeks after that news, on July 27, it was reported that Silicon Valley venture firm Sequoia Capital had downsized two major funds due to the downturn in the startup market. In addition, the company changed its focus from larger companies to younger startups, the WSJ said at the time.