Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

In Silicon Valley, a growing number of venture capitalists are breaking away from the larger firms to form smaller, highly specialized funds.

Sunil Dhaliwal, managing partner of Amplify Partners.

The newest is Amplify Partners; its managing partner Sunil Dhaliwal is formerly of Battery Ventures, where he invested in hot enterprise companies like Splunk and Netezza (acquired by IBM). Dhaliwal has succeeded in raising a $40 million fund to invest solely in emerging IT infrastructure companies.

“Technical founders working on IT infrastructure startups have far fewer options for funding compared to digital media, consumer Internet, or even application software startups,” said Dhaliwal in an interview. He was inspired to start the firm after meeting entrepreneurs in this space who felt that angel investors and larger firms didn’t have the time to provide “senior level attention.”

Dhaliwal believes that incumbent IT infrastructure vendors are “vulnerable” in a way the industry hasn’t seen for 25 years. And with hundreds of billions of dollars to be made, “it was pretty clear that I should fill that gap,” he said.

Amplify’s startups are all led by “technical founders who would rather write code than PowerPoint.” The three key themes the firm is looking for are scale-out architectures, data growth, and real-time infrastructure. The entrepreneurs tackling these problems must be focused on efficient business models from day one.

Dhaliwal revealed that Amplify Partners will make initial investments ranging from $50,000 to $1.5 million, and retains the necessary capital to fund its entrepreneurs through several rounds. Current portfolio companies include AppNeta, Continuuity, Datadog, Fastly, Wibidata, and several startups in stealth mode. Amplify Partners has offices in Cambridge and at Sand Hill Road in Palo Alto.

Storied investor Greg Sands (previously of Sutter Hill Ventures) has struck out on his own and successfully raised a first fund for his Silicon Valley-based venture firm Costanoa Venture Capital.

The $100 million fund will be dedicated to early-stage startups; each will receive an investment of $500,000 to $3 million. Specifically, the firm will invest in cloud-based applications and infrastructure, social and mobile opportunities in the enterprise, and “big data” technologies that can aggregate and curate vast volumes of a company’s data.

Sands said he is on the hunt for “cloud-based services solving real problems for businesses and consumers by leveraging data and analytics.”

Silicon Valley venture firms are increasingly investing in big data technologies — a trend that is showing no signs of slowing down. Accel Partners raised a $100 million big data fund, and investors Zach Bogue and Matt Ocko recently launched Data Collective, a firm that focuses on analytics, big data, and cloud computing startups.

Sands told me the firm’s name originates from the Costanoans, the Native Americans who originally settled the northern California coast. With this nomenclature, he aims to evoke an earlier time in the history of venture capital. He said the firm’s core tenets are traditional and include providing mentorship for entrepreneurs.

Prior to starting Costanoa, Sands worked as a managing director at Sutter Hill Ventures, where he invested in fast-growth companies like QuinStreet and Youku. Sands said his prior firm has agreed to come on board as a sponsoring limited partner. Costanoa also raised capital for its first fund from traditional limited partners and Silicon Valley technology entrepreneurs.

Costanoa has made 10 investments to date: Datalogix, DemandBase, Guardian Analytics, Inflection, Intacct, iSocket, Lex Machina, LinkSmart, Return Path, and Risk I/O.

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