- Index recently parted ways with five out of nine investors in its San Francisco office.
- The firm just announced $2.3 billion in new funds despite a fundraising drought.
- Index is doubling down on "key investment team members," a spokesperson told BI.
From the outside, things are looking rosy at Index Ventures.
This week, the 28-year-old venture capital firm debuted a new pair of funds totaling $2.3 billion, a substantial sum during an abysmal time for the industry's fundraising efforts.
However, a series of departures at the firm paints a darker picture of Index's state.
Last week, the firm parted ways with five investors in its San Francisco office, including mid-level dealmakers and a senior dealmaker, according to four people familiar with the matter. The turnover came during management's midyear check-ins with staff.
Two of the people said the firm is thinning the team as part of routine performance management. The closing of new funds is generally a natural point in time for a firm's managers to assess investors' performance and determine how committed they are to stay on.
However, two people familiar with the departures said some of the employees left willingly. Those investors had expressed a lack of confidence in the firm's direction during their meetings with managers, one of the sources said.
"With the launch of the new funds, we decided to double down on key investment team members and parted ways with others," a spokesperson for Index told Business Insider. "We are grateful for their work and contributions to Index and wish them the best in the future."
Two sources said the employee exodus leaves four investors on the West Coast: partner Vlad Loktev, a former Airbnb executive whose seven months with the firm makes him Index's newest partner; partner Nina Achadjian, who runs the San Francisco office with Loktev; partner Sofia Dolfe, who recently relocated from Index's London office; partner Ishani Thakur, who joined a year ago.
The firm has another six investors in New York, where it opened an office in 2022, and 12 more in the London office, according to the Index website. The European-born firm is structured in a way that investors across continents invest out of the same funds.
The exits are just the latest in a line of departures for the firm. In April, Erin Price-Wright, who led the firm's investments in Twelve Labs, and Alpaca, walked from the firm to take an opportunity on Andreessen Horowitz's American Dynamism team.
Mark Goldberg, a longtime partner who led many of the firm's fintech investments, and the firm mutually agreed to part way in December. He's now linking arms with Ethan Kurzweil, formerly of Bessemer Venture Partners, and Kristina Shen, an alumna of a16z, to form their own fund.
Another Index fixture, Mike Volpi, began phasing out his role late last year. The general partner who set up the firm's San Francisco office 15 years ago, moving the firm's center of gravity west of Europe, told The Information he will not make investments out of the new funds but will keep his board seats.
Layoffs were once a rarity in venture capital but are becoming more common as the industry reels from one of its worst years for fundraising in a decade.
Greycroft let go of five investors in October after it fell short of fundraising targets and shifted resources away from healthcare and fintech investing. Shortly after, two partners stepped back at Menlo Ventures, which had a new $1.35 billion fund earmarked for artificial intelligence companies, as it moved away from fintech investing.
Index's latest $2.3 billion haul is significant during such a dry spell for new funds. The new funds include $800 million to invest at the early stage and $1.5 billion to invest in growth.
Those figures are slightly down from the firm's last fundraise, when it collected $900 million for an early-stage fund and $2 billion for a growth fund. To be sure, it raised those sums in 2021's pandemic heyday, when firms needed to put more capital to work to get into deals. That year, Index saw seven portfolio companies go public at a market cap of more than $1 billion, including Roblox and Robinhood.
