The partners of US venture capital firm Sevin Rosen have decided to split the firm and pursue different investment practices. A similar rift recently occurred at US middle-market buyout firm Thoma Cressey Bravo.
Sevin Rosen was founded in 1981. Last November, Sevin Rosen cancelled fundraising for its tenth fund, and returned the roughly $300 million it had drawn from investors, citing an excess of VC capital in the market and a weak exit environment.
Since then, the firm has “explored a number of different alternatives to investment stage, sector, geography, organisation, and fund size”, according to a letter sent to limited partners.
It became clear this summer that Sevin Rosen’s partners would not reach a consensus and as a result the Dallas, Texas-based partners will soon raise Sevin Rosen Fund X, “while the four California partners have chosen to purse other investing paths”, the letter reads.
According to the firm’s website, its Palo Alto-based partners are Steve Dow, Steve Domenik, John Oxaal and Nick Sturiale.
The two sets of partners will continue to jointly operate existing funds and manage and fund their 50-some portfolio companies. To do so, they have “created an agreement that maintains the alignment of economic interests for all of the partners in the active portfolio, funds V through IX”, according to the letter.
Sevin Rosen is best known for backing some of today’s largest tech companies, including Compaq and Citrix. Its current portfolio includes YouSendIt, a web service that allows for the transfer of large files between users, and Cytokinetics, a biopharmaceutical company.
Limited partners in the firm’s previous funds have included Carnegie Melon University, Johnson & Johnson, General Mills, Grove Street Advisors, Rice University, West Midlands Pension Fund, VCM Venture Capital Management and Bessemer Trust.
Sevin Rosen did not immediately return a request for comment.