Just like your typical American high school, Sand Hill Road, the heart of Silicon Valley’s venture capital community, is governed by stereotypes. There’s Andreessen Horowitz, the cool new kid on the block, and Sequoia Capital, the popular over-achiever.
One of the oldest firms, Bessemer Venture Parters (“BVP”) has cultivated a reputation of being approachable and “down to earth.”
But in 2012, the media shy firm had plenty of reasons to pop the proverbial champagne bottle. Among its portfolio companies, the firm experienced five IPOs and a series of high-profile acquisitions. The year ended with a bang when Eloqua, which went public in August, was bought up by Oracle for a massive $871 million.
While Silicon Valley’s venture capitalists are learning the promotional game, BVP’s investors have avoided the spotlight. It’s rare you’ll find them schmoozing with the media at networking events. “I put on a tie once, and my seven-year-old daughter asked what it was,” joked Ed Colloton, one of Bessemer’s partners in the New York office.
Most PR folk would put a swift end to one of the firm’s proudest traditions, its annual “anti portfolio,” where the partners ‘fess up to missing out on opportunities to fund giants like eBay and FedEx. While most VCs keep their failures under lock and key, BVP pokes fun at its screw-ups.
Above: Bessemer partner, Byron Deeter
Jeff Lawson (above, right), chief executive of Twilio, a rapidly-growing cloud communications startup, was impressed by the firm’s “no shenanigans” approach.
“Some VCs seem like they are image-concious, and you see a lot of this celebrity culture,” he said. Lawson has known Byron Deeter (pictured above, left at the Twilio office), a member of the Midas List of Top 100 investors, for over a decade.
“They may not get all the headlines, but they are hard-working and easy to work with,” he said of BVP. When Lawson decided to raise a third round of funding, two BVP partners came up with the idea to package the term sheet into an app coded on the Twilio platform.
“Even though we were seed investors early, they’re a pretty hot company, so we had to compete,” said Deeter in a recent interview with VentureBeat.
Stunts aside, the New York Times reports that self-promotion and branding are symptoms of a consolidating venture capital industry. The top firms are waking up to the fact that it’ll take more than a smile and a checkbook to win over entrepreneurs.
With a stellar year behind them, the partners at BVP are ready for a reversal in strategy. “We’ve been conservative, maybe to the extreme,” admits Colloton in a phone interview. In the past, when a reporter would give him a call, he’d immediately direct them to the CEO of one of the firm’s portfolio companies.
“Yes, the low bravado hurts us,” Deeter agreed. “We’re the roll up your sleeves, sit next to the entrepreneur and try to work through the nitty gritty problems investors.”
Both investors agree that the firm is not associated with being the largest investor in Pinterest or a founding investor in Yelp. Meanwhile, another one of 2012′s high-performing firms, Accel Partners, is well-known for being an early investor in Facebook, and Sequoia Capital has built its reputation as one of the first to invest in Google.
BVP has been around for just over a century, and it currently boasts six offices around the world. Investments range from $100,000 to $50 million hyper-growth deals. In 2011, the firm closed a $1.6 billion fund and expanded its presence in 15 countries. The firm’s hottest investments include LinkedIn, Pinterest, Oracle-owned Endeca, and Yelp.
The partners view themselves as generalists, but they won’t invest in spaces they view as over-funded, such as infrastructure-as-a-service. The partners will develop a strong thesis or idea and hunt down companies that seem interesting. When Bessemer’s David Cowan got excited about the identity theft and mobile security space, he tracked down a little-known company in Arizona called LifeLock and showed up at the founders’ doorstep.
Lifelock has experienced its ups and downs (the CEO suffered identity fraud, and the founder quit amid allegations over his checkered past), but it still raised about $141 million when it debuted on the public markets this year.
“The Bessemer story is quiet and unassuming success,” said Deeter. “If you want to see it and quantify it, just look at the ticker every day.”
BVP earned a spot among the top three VCs for total IPOs in 2012, according to the NVCA, and its total exits were valued at $15.665 billion. The highlights of the year include:
Eloqua (NASDAQ: ELOQ) went public in August. BVP invested in 2007. Oracle recently announced the acquisition of Eloqua for $871 million plus company cash.
Lifelock (NYSE: LOCK) went public in October. BVP was the first institutional investor, leading the Series A and participating in each later round. At the time of IPO, BVP was the largest shareholder in Lifelock.
Millennial Media (NASDAQ: MM) went public in March. BVP seeded the company, co-led the Series A and participated in each later round, sharing the role of largest shareholder.
Verastem (NASDAQ: VSTM) went public in January. BVP co-led the Series A financing and participated in each later round.
Byron Deeter image courtesy of Twilio
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