Private Equity
We've spent a lot of time lately discussing micro-VCs, including last week's news on Floodgate ($73m fund close) and 500 Startups (new $30m fund being raised). So I spent some time discussing the phenomenon with Chris Douvos, who invests in mico-VC funds through his role as a managing director with The Investment Fund for Foundations: How long have you been investing in micro-VC funds, or super-angel, funds?? We’ve been active in this space since around 2005, and have invested over time in several of the archetypal managers. Who are those archetypical managers? Well, the main one is someone we actually haven’t given money to: Ron Conway. He’s created a fantastic ecosystem. But we’ve backed some of the people who have taken types of things he does and refined them a bit. For example, one of our earliest investments was in First Round. We think those guys have brought an aggressively thoughtful approach to the challenges of investing in seed-stage companies. I love the O’Reilly AlphaTech guys, whose differential is that they’re leveraging the larger O’Reilly ecosystem. In the case of O’Reilly or First Round or Floodgate, they’ve created brands around themselves that magnetizes interesting people. That helps them punch above their weight.
5 min read · 05 August 2010
A couple of notes from the world of institutionalized super-angels, via filings with the SEC: First up is Floodgate, the firm formerly known as (Mike) Maples Investments. It has raised $73.5 million for its third fund, which more than doubles the $33 million raised for Fund II back in 2008.
1 min read · 30 July 2010
Digital Sky Technologies reportedly plans to go public next year in New York, and already has hired Goldman Sachs as a lead underwriter. For the uninitiated, DST is a Russian Internet conglomerate known for taking minority stakes in companies like Facebook, Zynga and Groupon. It also has lots of local investments, including in leading Russian web portal Mail.ru. Matthew Ingram described DST as a “mutual fund of hot startups.” He's largely right, except that mutual funds disclose financial information on underlying portfolio companies (or at least it's easy to find, since the companies are publicly-traded). DST, on the other hand, may not be required to tell shareholders much more than company name and date of investment. In other words, a DST IPO won't open the Pandora's Box that worried so many VCs during the public pension transparency debatse of 2002 and 2003.
2 min read · 30 July 2010
DCM announced that it has raised $400 million for its sixth venture capital fund, and a RMB 200 million (approx $30m) side-fund. The firm previously raised $505 million for its fifth fund in 2005. In other DCM news, the firm has added Sling Media co-founder Jason Krikorian as a general partner. It also promoted Tokyo-based Osuke Honda to partner.
3 min read · 21 July 2010
Yesterday I asked email readers to name the latest U.S. venture firm to seriously consider raising a China fund. Their hint was that it already has some Chinese companies in its general portfolio. The answer is Highland Capital Partners, which first broached the subject in an LP advisory call last week. The basic idea would be for the China fund to have a dedicated team and its own name (probably some Mandarin translation of “higher ground”) – with Highland serving as a cornerstone limited partner.
1 min read · 20 July 2010
Founders Fund has closed its third fund with $250 million in capital commitments. The San Francisco-based firm had raised $220 million for its second fund in 2007, and $55 million for its debut vehicle in 2005.
3 min read · 20 July 2010
Draper Fisher Jurvetson has wrapped up its tenth fund, with $350 million in capital commitments. The firm posted a related press release to its website late Friday, but didn’t submit it to the newswires. “Raising a fund is no longer a newsworthy event from our perspective,” DFJ partner Josh Stein explained to me over the weekend. “We want to generate attention for our exits.” It’s an interesting argument, and one worth further discussion. Maybe tomorrow. For now, however, let’s discuss the fundraise (because that is, for better or worse, what we do here)… DFJ originally sent out books in late 2008 with a $600 million cover, which was a slight reduction from the $650 million raised in 2007 for Fund IX. But launching a venture fundraise in late 2008 was a lot like me trying to buy a Porsche. You can say you’re going to do it. You can go through the opening motions. But, eventually, some inescapable realities turn the entire thing into a farce.
2 min read · 19 July 2010
1 min read · 19 July 2010
1 min read · 16 July 2010
1 min read · 16 July 2010
