AI & ML

Inside Bessemer’s operating model

Dive into Bessemer’s origin story and how it shapes the way the firm makes investments today — embracing collaboration, intellectual honesty, and rethinking traditions.

_{The original 2023 interview for this article occurred on Invest Like the Best. Listen here.}

With over 20 investing partners and eight offices around the globe, Bessemer’s footprint extends from Silicon Valley, New York and Boston all the way to London, Israel, Bangalore, and beyond. So what’s the secret to the operating model that runs one of venture capital's most tenured institutions? Paradox.

Bessemer is highly decentralized, driven by independent thinkers, and yet, remains a close knit partnership that holds intellectual honesty and collaboration as core values in its code of conduct. Because the firm doesn’t have a single owner at the helm, partners can make decisions autonomously while still benefiting from the collective wisdom of peers and mentors, as well as insights from past generations of Bessemer investors.

“We work in a highly disaggregated, empowered manner where any partner who puts in the time, effort, and capital can make investments in what they believe will become the next great technological invention, business, or trend,” explains Jeremy Levine, a partner who has spent more than two decades in Bessemer’s New York City office.

“Autonomy is so important to us,” adds Bessemer Partner Brian Feinstein. “Conventional wisdom says you can't scale venture capital, and that's often true with a consensus decision-making model. We like to think we've cracked the code on scaling by enabling each partner to pursue investment areas as they see fit and make the best decisions they possibly can.”

Within this model, questioning the status quo isn't just allowed, it’s seen as a positive signal of the firm’s healthy functioning. “In the 17+ years I’ve been at Bessemer, our operating system has changed in major ways, multiple times,” says Kent Bennett, a partner who’s invested in software at Bessemer since 2008. “Our most long-standing tradition is actually rethinking traditions.”

Bessemer has always valued reflection and transparency — in fact, we even open-source our research on the industries and trends where we invest, as well as our investment memos from the last quarter century. But it’s still rare to hear three partners go in-depth on the dynamics and values that have defined Bessemer for over a century.

Here, Jeremy Levine, Brian Feinstein, and Kent Bennett discuss the firm’s history, evolution, and operating model, and the impact of those foundations on the firm’s culture, talent, and investments. The partners also share what they look for in companies, the conviction driving more than $1B+ into AI startups, and other VC insights from a combined 55+ year tenure at Bessemer.

What makes Bessemer Venture Partners different from other venture capital firms?

Technology over ego: From its origins with Henry Phipps naming the firm after the Bessemer process rather than himself, Bessemer’s culture has always celebrated invention and enduring progress over personal glory.
Radical autonomy: With no CEO or central investment committee, each partner has true decision-making authority. This model ensures durability beyond any one leader and enables conviction-driven investing.
Intellectual honesty: Because no one must “sell” ideas upward, investment memos are written for clarity, not persuasion. Partners give candid feedback without politics—fostering rigorous, truth-seeking debate.
Apprenticeship and continuity: Generations of investors have grown within the firm through mentorship, learning directly from senior partners before becoming mentors themselves. This continuity sustains Bessemer’s institutional wisdom.
Conviction over consensus: Partners develop deep, long-term “roadmaps” in areas like cloud, healthcare, and AI rather than chasing trends—an approach that enabled early, contrarian bets on companies like Shopify, Toast, and Procore.

A brief history of Bessemer

Bessemer origins trace back to the family office of one of the lesser known co-founders of Carnegie Steel, Henry Phipps. “None of us were even born when what became Bessemer Venture Partners started, but its history has been passed down over the years and decades,” says Jeremy.

“Back in the 1890s, Andrew Carnegie, Henry Phipps and Henry Frick commercialized the Bessemer process — a then newly invented way of making steel at high volumes very cost effectively. Phipps took his earnings and put them into a trust for his descendants, with a goal of creating a really long-term family office.”

In 1975, the department of Phipps’s family office responsible for making high-risk, high-growth investments began focusing on high-tech projects, opened its office in Silicon Valley, and officially became Bessemer Venture Partners.

“The family understood that performance will go naturally up and down over years and decades, which allowed Bessemer to invest in five, 10, and 20-year projects. That ultimately drove fantastic performance and created the stable capital base that we benefit from today,” explains Jeremy.

That’s not the only influence of Phipp’s legacy on the firm. “Phipps was a private individual and named his own family company Bessemer in a nod to the brilliant inventor who created the process that generated all of his wealth,” explains Jeremy. “The focal point was always the technology, not the individual, and that’s very much in line with our ethos today.”

Bessemer’s unique operating model

With no living founder, Bessemer’s operating model is set up to endure past any one individual. The firm’s commitment to autonomy and independent thinking has driven its longevity through market cycles and decades of technological advancements.

“It’s unique that there’s no one partner in charge of investment decisions at Bessemer. In the 22 years I've been at the firm, I've seen just one investment get shot down,” recalls Jeremy. “We don’t need to ask anyone permission. Instead, we ask each other for feedback on investment decisions that we have the authority to make and the responsibility to make well.”

Each partner is free to make investments based on their convictions and roadmap strategies. In other words, months and years of deep research in emerging areas of technology — from cloud and quantum to healthcare and artificial intelligence — underpin the decisions to back certain audacious founders and startups.

In weekly partnership meetings, investors present opportunities, share memos and due diligence, and often have the founders present to the firm. Then, in a roundtable discussion, others ask questions and share feedback and recommendations to the lead investor. Given the autonomy each partner has in driving investments, these meetings are not a function to get permission. The decision to invest rests to a large extent with the partner and the teaming working on the deal. However, honest feedback helps sharpen each other’s thinking and roadmap development.

“We're asking each other for feedback on what we individually want to do, so we feel the responsibility and the authority to make the decision,” explains Jeremy. “We want to be able to tell each other gee Brian or gee Kent or gee Jeremy, that doesn't look like a very good decision you're making.”

These rigorous discussions culminate in a 1-10 vote that represents collective feedback on the investment, not necessarily an official ruling.

The impacts of this decision-making model are diverse and wide reaching. During their tenures, Jeremy, Kent, and Brian have observed how it has shaped culture, investment outcomes, talent, and relationships, both among colleagues at Bessemer and with founders and other operators.

Intellectual honesty

“One of the first things you’ll notice at Bessemer is that people just say what they are thinking. There's no politics or salesmanship because there’s no founder of the corner office that you have to worry about offending by giving your honest opinion,” says Kent. Jeremy recalls an onboarding meeting with a new employee where he asked if anything had been a departure from what she had expected, and she immediately brought up Bessemer’s investment memos.

“She couldn’t believe how honest they were. At her previous firm, memos were written to convince those who ran the investment committee. In contrast, it was very clear to her that the partners at Bessemer wrote the memos to really explain their decision, not to ask someone else to make that decision for them.”

Investor tenure

Many investors — Brian, Jeremy, and Kent among them — joined the firm early in their careers, received mentorship from senior partners, and have since paid that mentorship forward to newer recruits over the course of their long tenures.

“I spent several years listening to my first mentor, Felda Hardymon, talk to companies,” recalls Kent. “I sat next to Jeremy on two boards. I sat next to Bob Goodman, a senior partner, for 200 hours of meetings. There's no shortcut to learning what you learn over that amount of time, surrounded by people with that level of expertise and experience.”

This apprenticeship model and the ability to have ownership over investment decisions attracts new generations of talent to Bessemer. “As a young person growing up here, it’s wildly exciting and empowering to know you’ll get to establish your own track record and reputation,” says Jeremy.

Investment outcomes

Investors' ability to make their own decisions based on research, expertise, and past experience allows for more variability in the type of investments being made and reduces the chance that great but unconventional investments are passed over.

“Over time, each partner picks up over time a number of essential themes — we call them roadmaps — and does a bunch of homework on them. Then, they bring the insights to the team and start investing in companies,” explains Kent.

“You quickly see that the goal is not to invest in what’s popular,” adds Brian. “It's not about chasing momentum. It's not about pursuing the consensus opportunities. It's about developing a thesis and pursuing ideas that might be off the beaten path.

“Three of our most successful vertical software investments — Shopify, Toast and Procore — were all relatively unpopular investments when we first discussed them in a partnership meeting. Our autonomous decision-making model made them possible.”

Improved relationships

Investor autonomy also leads to more transparency in relationships — both among partners, who can give and get honest opinions, and with the portfolio companies that they invest in, who save time and get more hands-on support because they’re working directly with a decision-maker.

“When I show interest in investing in companies, founders usually expect they’ll have to jump through a series of hoops back at the firm,” says Kent. “I love getting to tell the actual process: ‘We meet, and then I’ll go back to the team and decide whether we want to invest.’

“You get similar benefits when you sit on the board of a company and the company is facing a tough decision. The co-investors around the table will say things like, ‘I have to go ask my partners what I can do here.’ It’s really empowering as an investor to be able to just say, ‘I’m the one with the most context, and here’s what we can do.’”

Distinct styles, collective approach: Bessemer’s investment philosophy

The principle of autonomy extends to partners’ investment interests. “Many associate Bessemer with software, but we also have investments in life sciences, frontier tech, fintech, now, artificial intelligence, and beyond. We make speculative seed investments and late-stage growth buyouts of mature companies generating profit. The breadth of our investments is really extraordinary,” says Brian.

What each partner weighs most in investments varies too. “The thing I fall hardest for is wild capital efficiency,” says Jeremy. “At the earliest stages, that manifests as scrappiness and the willingness to do things that are the opposite of gold plated. That’s been the case for many of my investments. But I believe it’s important to be willing to break your own rules. One of my most successful investments, Pinterest, ended up raising $1 billion of equity capital before its IPO.”

Kent is laser-focused on product differentiation at the early stage. “The investments that succeeded had products that were clearly superior to the existing alternatives. The ones that failed had a product that was more of a question mark — either because it wasn't fully formulated or because it wasn’t a slam dunk in the eyes of consumers. Over time, I’ve honed an ability to identify products that are radically advantaged from day one.”

Brian assesses companies based on their path to market leadership and defensibility. “In vertical software and AI, there are these virtuous cycles where first movers have a huge advantage. In terms of founders, I tend to work with leaders who have a deep empathy for the domain and customers. In vertical software, I find this translates to long-term success.”

Each partner has specific stages, geographies, and roadmaps where they might have more expertise and therefore invest in more. Still, no one lays claim to any one area. The firm has a strong culture of sharing and seeking feedback, so ideas are circulated widely, and when a fertile area of investment is discovered, other partners typically get involved.

“A great example is Brian’s investment in Mindbody. He discovered the company when he was an analyst and I was a partner, and we ended up investing,” recalls Jeremy. “When we realized that Mindbody’s payments product for fitness and wellness businesses could drive significant revenue growth, we tried to find every other company doing something similar in other categories.

“Ultimately, we had 70 vertical software companies invested in by nine different partners. If one partner had called it off limits (to the others), we would have been maybe 10% as productive. However, it’s our practice to help each other by sharing our ideas and research, and benefit from each other's execution against the best ideas.”

Adaptation to technological shifts, especially in the AI economy

Venture is a game of spotting the technological waves before they crest and, eventually, define a generation. This strategy not only informs Bessemer’s investments in new areas but also ensures its portfolio companies leverage these advancements to remain competitive and hopefully grow into market leaders. Many partners currently at Bessemer were investors during recent waves — cloud, mobile, and vertical software — witnessed first-hand how these shifts transformed the world’s digital economy.

“With the benefit of hindsight, the importance and massive impact of new technologies like cloud and mobile are obvious. But when they first emerged, I’m not sure they felt all that different from VR and blockchain. All these things feel incredibly exciting in the moment, and we’ve seen some of them make it, while others don’t,” says Jeremy.

As a leader in the cloud revolution, Bessemer believes tech is now transitioning from an era of CPUs to GPUs, in the dawn of the AI-era. In 2023, Bessemer first announced its commitment to backing AI-Native founders everywhere: “We’re amidst a new and major computing revolution,” the firm shared. And then two-and-a-half years later, Bessemer made good on their promise having invested more than $1 billion into AI startups, across nine roadmap categories, including data and cloud infrastructure, vertical SaaS, horizontal SaaS, developer platforms, fintech, healthcare, deep tech, consumer and cybersecurity.

“Artificial intelligence is here and nearing escape velocity. Progress across numerous technological vectors has led us to this point—from new model architectures to specialized hardware with vast computing power to advanced machine learning techniques. There has never been a better time for small, ambitious teams to positively transform life as we know it.”

Since ChatGPT’s astonishing release into the world, portfolio companies such as Intercom, Zapier, and Canva have demonstrated how category leaders are adapting to the AI imperative by enabling their software platforms with LLM and AGI advancements.

Recent Native AI leaders have joined Bessemer portfolio, including Abridge, Anthropic, DeepL, Coactive, EvenUp, Fieldguide, and Perplexity, among others. Our partners continue to research and make predictions on ways subsectors of the AI economy could evolve — from foundational models and AI infrastructure to B2B and Vertical AI businesses, and beyond.

Stewards of capital, optimists of the future

Longevity sits at the center of everything that Bessemer is and does — from the long tenures of the parter to a stable capital base built from over a century of investments. Key to longevity in venture capital however, is staying open to change, proactively seeking out fresh and contrarian perspectives, and embracing the longview.

“We feel incredibly fortunate to have been given this platform by the prior generation,” says Brian. “When someone hands something over to you, you're the beneficiary of it, and you're able to build a great career and do incredible things. You just feel an enormous responsibility to hand it over to the next generation.

“There is no ‘one way’ to be successful in venture capital. You don't need to be like anyone else. You just need to find your path, and discover the way you can do it better than everyone else. Play to your strengths and be authentic to your character.”