Gurley, who spoke on a panel of venture capitalists at Goldman Sachs' annual Technology and Internet Conference in San Francisco, was asked why he'd invest in a startup with no revenue model. Benchmark led a $13.5 million investment in the app, valuing Snapchat at $60 million to $70 million, which was first reported by The New York Times.
"If you look at the past 15 or 20 years of the consumer Internet," said Gurley, "most of the pillars were all venture funded when they had no revenue model -- Yahoo, LinkedIn, Facebook."
More to the point, he said, startup investing is not about backing ideas -- it's about backing a team that can execute. And Benchmark was impressed by twenty-something co-founders Bobby Murphy and Evan Spiegel, whose app is now sending more than 60 million short-lived photos or messages daily.
"Two 21-year-olds, working in their parents' garage, wrote a simple piece of code but created a network that has to be paid attention to," he said.
Mark Zuckerberg apparently agreed. The Snapchat crew told the Times that the Facebook CEO met with them in December, not long before his company banged out a Snapchat knockoff, called Poke, in a couple of weeks.
It's worth noting that Benchmark was also a big investor in Instagram. Its lack of business model didn't stop Zuckerberg from scooping it up for a price that ended up at more than $700 million when it closed last fall.