The sudden death of former SurveyMonkey CEO Dave Goldberg in a treadmill accident nine years ago shook Iconiq Capital founder Divesh Makan. He had first met Goldberg and his wife, former Facebook chief operating officer Sheryl Sandberg, in 2002, when all three of them were still “nobodies,” as Makan puts it.
“It was the first real death that I had in my life,” Makan told Fortune in an interview. “It was the first death I felt.”
Goldberg had been an important client at Iconiq Capital, the investment firm that Makan had cofounded after leaving Morgan Stanley in 2011 with a roster of wealthy tech and celebrity clients. But most significantly, Goldberg had been a close friend and mentor to Makan. Right up to his passing, Makan says he and Goldberg spoke via phone, text, or email almost daily—and the intimate dinners Goldberg hosted at his house shaped how Makan thought about the word “community.”
It was Goldberg who encouraged Makan to launch Iconiq Growth, the investment firm’s now venture capital arm, in 2013, and who would write the fund one of its largest initial checks. He helped convince Will Griffith, who had worked at the venture investing shop TCV for nine years, to join and launch it (and schooled him in poker in the meantime, Griffith says). Goldberg also helped the fund land some of its first deals, and he sat on the firm’s first advisory board, too.
“He was our biggest reference source. He was our biggest critic. He was our biggest advocate. And he was our biggest cheerleader—all in one,” Makan says of Goldberg.
Makan has never spoken publicly about Goldberg and the instrumental role he played at Iconiq until now. For that matter, he almost never speaks publicly about Iconiq at all. Apart from an interview with Carlyle cofounder David Rubenstein last month for Bloomberg Wealth and a podcast with business management speaker Simon Sinek, Makan has steered clear of media, declining or ignoring requests from journalists for more than a decade, and he’s directed his firm to do the same. “I'm the person fighting it,” Makan admits.
But Iconiq gave Fortune a rare look inside the venture capital fund attached to the wealth management firm that caters to affluent clients and their relatives. It came just two months after Iconiq Growth closed its seventh fund—the firm’s largest ever at $5.75 billion, and 42% larger than its previous one.
To stay competitive, Iconiq will need to put that capital to good use and get early entry into the hottest deals, such as in buzzy sectors like AI. That’s particularly true when it goes head-to-head with A-list venture capital shops with better-known brands, such as Khosla Ventures, Andreessen Horowitz, or Sequoia Capital.
With the private markets in a period of transition and pre-IPO valuations in free-fall, Iconiq Growth relies on the strength of its high-profile network—and, it says, going to “uncommon” lengths for the founders it works with—to stay in the game.
Musicians, artists, chefs, and techies
When Makan spoke with me via Zoom in between meetings, he was bubbly and seemed at ease, though he told me he was uncomfortable. Makan, who is 50 and originally from South Africa, says he’s always found talking about himself to be a “weird thing.”
But there’s a reason Makan may be hesitant to talk to reporters—and why Iconiq Growth general partners tiptoe around questions about their wealth management arm. After all, Iconiq Capital clients include some of the wealthiest Americans—many of whom would rather keep quiet about where they park their money.
The Iconiq wealth management firm manages some $60 billion in assets for fewer than 300 families—with more than $80 billion in total across both the wealth management firm and venture fund. The typical family client has more than $250 million to invest with the firm and more than $1 billion in assets. Iconiq Capital has some 500 people on staff—working on everything from tax planning to real estate to philanthropy—with 80 people focused on Iconiq Growth, the venture capital arm.
Some of these client relationships are no secret. It’s well-known that Makan made his name within the Facebook universe, managing the wealth of Facebook cofounders Mark Zuckerberg and Dustin Moskovitz. And Makan had started working with Sandberg before she joined Facebook, when she was still an executive at Google. Other clients—like Twitter cofounder Jack Dorsey, Microsoft CEO Satya Nadella, General Motors CEO Mary Barra, and Ryan Reynolds and Blake Lively—have been reported over the years by the Wall Street Journal or Business Insider. And sifting through non-profit documents points to others in the Iconiq network—whether it be limited partners or wealth management clients—like Napster founder and Facebook’s first president Sean Parker; American film producer David Geffen; and Zynga founder Mark Pincus.
Iconiq Growth's partners repeatedly declined to speak about who are or aren't clients. However, the firm did share the 10 people who sit on its advisory council: Mark Zuckerburg, Tiger Global hedge fund manager Chase Coleman, Yahoo cofounder Jerry Yang, KKR co-Executive Chairman Henry Kravis, and General Motors’ Barra, among others.
When Iconiq launched its growth fund in 2013, Griffith and the firm had already been doing one-off venture capital investments for Iconiq’s wealth management clients for some time. For example, Iconiq had invested in the seed round of Figma, the design startup cofounded by Dylan Field and Evan Wallace in 2012, after an introduction from Jeff Weiner, LinkedIn’s executive chairman. Launching a fund would be a way to formalize and build a strategy around these investments. The capital for that first venture fund—a total of $509 million—came predominantly from Iconiq clients: About two-thirds of the limited partners were from the wealth management side, according to Griffith.
Today, it’s a much smaller concentration: Less than 20% of capital in Iconiq Growth’s latest fund came from wealth management clients, according to Griffith. However, many Iconiq Growth founders have become clients of the wealth management arm after a major exit, or limited partners in Iconiq’s growth funds.
“I know the team there, and I think they’re doing great. And selfishly, I think it's a good investment,” says Olivier Pomel, cofounder and CEO of Iconiq portfolio company Datadog, who started investing in Iconiq funds after his company went public in 2019. He declined to comment on whether he’s a client of the wealth management firm.
While many wealth management firms invest their clients in venture capital funds, it’s unusual for a firm to have its own affiliated, self-managed venture funds. Andreessen Horowitz has recently become a notable exception—adding its own wealth management arm called Perennial and raising funds inside of it.
But it’s Iconiq’s wide ranging network that it has built over the last two decades—spanning musicians, artists, chefs, authors, athletes, and techies—that its partners say has given its growth fund an edge in Silicon Valley. That is what has convinced founders and executives at winners in its portfolio like Adyen, Datadog, Snowflake, Procore, Coupa, and GitLab to work with them.
Reid Hoffman, the cofounder of LinkedIn and one of Silicon Valley’s best-known venture capitalists, is on the firm’s advisory council and has worked with the fund since the beginning. He tells Fortune that Iconiq Growth's partners have introduced him to a handful of portfolio company founders, including Andrey Khusid, cofounder and CEO of visual workspace startup Miro. “I have my choice of which firms to work with, so obviously I choose those that I think are among the strongest,” Hoffman said via email. “As a network person — consider LinkedIn — I particularly value the deep value in their network and community.”
Taking clues from Goldberg, Iconiq hosts frequent dinners—around a couple hundred a year—to bring people together in smaller, more intimate settings at Makan’s house or at restaurants, wineries, or event spaces worldwide. But there are also more formal events and gatherings like its flagship Ideas Conference and CEO retreats, organized by Iconiq’s specific events and content team called “Iconiq Studio.” Councils set up by the firm advise founders and help Iconiq’s partners with their due diligence when thinking about investing in a company. One example is its health care council, which includes former Johnson & Johnson CEO (and now Iconiq Growth general partner) Alex Gorsky and former Cleveland Clinic CEO Toby Cosgrove.
In total, Iconiq Growth says it has raised $21 billion and backed more than 140 portfolio companies since 2013, building out a niche for itself in enterprise software, infrastructure, fintech, consumer internet, and healthcare IT. Twenty-seven of those portfolio companies have gone public.
‘Hold it up’
Every venture capitalist talks about introductions they make. The social circles you are in and the people you can get on the phone are a form of currency in Silicon Valley. But how Iconiq partners talk about introductions sounds almost religious—certainly obsessive.
Each introduction between a customer or mentor is documented in Salesforce, typically used by companies to track their sales leads. Each executive hire they help with is noted. Each event a founder attends is listed. All these data points are tracked, tallied, and shared with founders they work with. Last year, there were more than 1,150 intros made and the team helped with more than 90 executive or board searches, according to the firm.)
Iconiq Growth wants the people it works with to hold it to a high standard, according to Griffith. “Each day, every day, all day long: Hold it up. We want to earn it. We want to deliver. We want to make sure we really deliver against every one of the commitments that we've made,” he says.
Of course, these introductions work the other way around, too. Frank Slootman, chairman of cloud-based data platform Snowflake, was brought into the fold after a hedge fund manager introduced him to Makan. Slootman visited Makan’s house and says he found him to be “a very charming, captivating guy,” and was compelled by the wealth management firm’s reputation from people he knew. Iconiq Growth first invested in Snowflake in 2017, before Slootman had joined the company, putting $55 million into Snowflake’s Series D round. In total, Iconiq has invested $361 million in Snowflake, which went public in late 2020 at a near-$68 billion valuation, over several of its funds. When the company’s shares were listed, Iconiq Growth owned nearly 14% of the company, according to SEC filings.
As its investors have built deeper relationships with tech founders, the firm has put more and more focus on investing at the earlier stages. About half of the time, it makes its first investment when a company is at its Series B stage and the startup is making about $10 million in annual revenue. That’s when a company has found traction in the market, but still has plenty of room to grow, and when Iconiq thinks its customer introductions could help boost its top line.
But what the partners hope to really set them apart from other VCs is what they refer to as “uncommon care,” or when their investors have gone beyond what’s typical for their jobs. General partner Matt Jacobson said the firm had orchestrated getting founders’ family members out of floods and other natural disasters, for example, and that the firm is prepared to offer “any resource possible at our disposal” when necessary. “Nothing is too much to ask of them,” Snowflake’s Slootman says.
A new era
Two years ago, the venture capital market collapsed as interest rates climbed and the market for initial public offerings froze. Iconiq’s partners gathered in early 2022 and decided they “need to do things differently,” according to Jacobson, a former TCV and Battery Ventures investor who has been with the fund since its launch in 2013.
“In 2022 we made zero new investments. Zero,” Jacobson says, adding: “That was a dramatic change.” (Afterward, Iconiq Growth clarified that two investments had closed in early 2022 that had been committed to in 2021.)
During Iconiq’s step-back from new venture investments, it made a higher number of bets than previously in public companies that Iconiq Growth had originally backed when those companies were private, such as cloud-based monitoring and analytics company Datadog or customer engagement software company Braze. It also upped its stakes in its pre-existing portfolio companies, sometimes from buying secondary shares that other investors were trying to sell. Griffith says that, while there have been few exits via M&A in its private portfolio since early 2022, Iconiq has been selling off shares in the portfolio companies that went public before 2022 that has allowed for a “steady distribution of capital” over the last three years.
But the amount of capital going out the door and into startups shrunk significantly. Iconiq Growth had already raised most of its seventh fund way back in 2022—and most of it was committed by April 2023. But Iconiq kept delaying the close date for clients to participate in the fund, which Griffith says was because the firm wasn’t spending the money as quickly as it had expected.
Iconiq declined to disclose performance figures for its investments with Fortune. But a person familiar with the firm’s performance, who asked to speak anonymously because the information is not public, shared the returns of the firm’s first four funds. Its first fund in 2013 returned net multiples of 2.7 times the invested capital; the 2014 fund did 5.5 times; the 2017 fund did 5.4 times, and the 2019 fund has so far returned 1.9 times on its investments. These are high marks: All of these funds are in the top quartile of global venture capital firms, and the 2014 and 2017 funds are in the top 10%, according to annual benchmark data from PitchBook.
With the billions in new capital for the new fund, Iconiq Growth has acquired secondary stakes of design unicorns Figma and Canva, and since 2023, it’s made several new investments. Business planning software Pigment, medtech startup AcuityMD, enterprise AI company Glean, and wealth management custodian Altruist are just a few.
Like just about every growth fund these days, Iconiq emphasizes how it’s investing early in the startups it backs. And AI has become a “core focus” at Iconiq Growth over the last year and a half, according to Griffith, who says the fund has made six new investments in AI companies in the last year, all around the Series B stage, including generative AI startup Writer and vector database startup Pinecone. Additionally, some 15 of its pre-existing portfolio companies have made meaningful moves into that sector, including the open-source development platform GitLab and customer service platform Intercom.
‘Everyone else is telling our story’
When speaking with Makan, I asked him what had changed his mind—why, after all this time, he had started talking publicly about Iconiq, and was taking a call with me.
Makan says that the partnership kept getting feedback from entrepreneurs that they wanted Iconiq to talk more about itself. While Makan didn’t address whether the firm’s secrecy has hurt the fund’s efforts to get into hot deals, he said that founders told them that “every other firm” had a brand people recognized, while Iconiq Growth did not. “We left a white space that, if you don't fill it, someone else fills it for you,” Makan says. “So suddenly, everyone else is telling our story.”
The irony is that the founders I spoke with liked that Iconiq had kept its cards close to its chest. Snowflake’s Slootman told me he was “surprised” to see the firm was speaking with Fortune. Historically, Iconiq “saw no need to be very public with anything they did and how they did it,” he says.
He adds: “Most of us like that—because we have no need for this to be a high-profile thing.”
Correction, July 22, 2024: This story has been corrected to reflect that the seventh fund was 42% larger than the sixth, and to clarify that Iconiq invested in Figma after Will Griffith joined the firm and that Iconiq Growth had invested in Snowflake before Frank Slootman became chairman.
