Discord and Mercor backer Niko Bonatsos leaves General Catalyst, intends to launch a new venture capital firm

Niko Bonatsos Departs General Catalyst to Launch New Venture Firm

Niko Bonatsos on stage at TechCrunch Disrupt in San Francisco, October 20, 2022. Photo by Haje Kamps / TechCrunch

After years of steering General Catalyst’s seed investment strategy, Niko Bonatsos has exited the firm. Recognized for his early support of companies like Discord, which is eyeing an IPO, and the rapidly growing startup Mercor, Bonatsos shared with TechCrunch that he plans to establish a new early-stage venture capital firm with a group of close associates.

Bonatsos joins a list of notable investors who have recently left General Catalyst, a firm that has been evolving beyond its traditional venture capital roots. In recent years, General Catalyst has launched a wealth management division, adopted a private equity-inspired AI roll-up strategy, and introduced the Customer Value Fund (CVF), which offers late-stage startups non-dilutive funding backed by recurring revenue.

Other recent departures from the firm include Deep Nishar and Kyle Doherty, who co-led the late-stage ‘Endurance’ initiative, as well as Adam Valkin, who previously managed the early-stage fund alongside Bonatsos and Trevor Oelschig, according to a TechCrunch report from last year.

While his former colleagues have chosen not to discuss their exits, Bonatsos described his departure as a mutually agreed-upon decision. He reflected positively on his tenure at General Catalyst, calling it a “fantastic experience” that offered valuable lessons.

Bonatsos has not yet selected a name for his new venture or started the fundraising process. He declined to reveal the exact size of his future team, but mentioned that he is considering top-tier founders and investors as potential partners.

Investment Focus and Future Plans

• Supporting Young Founders: Bonatsos aims to continue backing emerging entrepreneurs, a trend he says he recognized before it became widespread. Many prominent leaders in the current AI boom, such as Mercor’s founder Brendan Foody, are young and even include college dropouts.
• Consumer-Focused Startups: He is also interested in investing in founders building consumer businesses, a segment he believes is overlooked in a market dominated by enterprise AI startups.

Despite General Catalyst’s shift to what it now calls an “investment and transformation company”, the firm remains active in seed-stage investing. Last year, General Catalyst brought on Yuri Sagalov, a former YC partner and founder of Wayfinder Ventures, to oversee its U.S. seed investments.