July 9-10, 2013
San Francisco, CA

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U.S. venture capitalists were busy in 2012, raising overall investment activity for the year by 10 percent compared to 2011. Venture firms invested a total of $20.6 billion last year, according to data from Thompson Reuters and the National Venture Capital Association.

Overall, there were 182 U.S. funds created throughout the year, which went down 3 percent in comparison to 2011′s funds. Thompson Reuters and the National Venture Capital Association attribute a fund’s location to its incorporation location, not to the venture capital firm’s headquarters. Funding was at its lowest in 2012 during the fourth fiscal quarter. Only 42 funds invested $3.2 million in the fourth quarter. This isn’t typical for venture capitalists, but funding is fluid and difficult to predict.

Investing dipped in 2009 to around $16 million invested for the year, compared with 2008, which hit more than $25 million. In July 2009, Down Jones Private Equity Analyst said investing was down 63 percent since 2003. But now it seems it has risen to the highest investing has been in four years.

In 2012, 55 new funds appeared. Thompson Reuters and NVCA consider a fund new only if the money is new. Investors involved are likely involved in previous funds. Overall, the top five venture capital funds led 55 percent of investing in 2012. These funds include Sequoia Capital Global Growth Fund, a $700 million fund, and Venture Lending and Leasing VII, a $373.1 million fund.

Charts created with data supplied in the report; Quarter image via Shutterstock

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Google corporate development VP David Lawee will soon move from leading Google’s mergers and acquisitions over to leading a new Google late-stage venture group, according to a report from Reuters.

A source familiar with Google’s plans said that Don Harrison, a lawyer at Google, will in fact be leading corporate development for Google starting in 2013 but was not sure what Lawee’s next role with Google would be. Harrison has been with Google for more than five years and has provided counsel for many Google acquisitions.

Reuters said the new late-stage investment group hasn’t been finalized and it “might operate separately from Google Ventures.”

Lawee has an interesting history and sold four companies as an entrepreneur before working for Google. In May, he told us his advice on how to get acquired by Google. At another conference, Lawee said that two-thirds of Google’s acquisitions had been successful.

David Lawee photo: Sean Ludwig/VentureBeat

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Recession? What recession? The Mayfield Fund, one of Silicon Valley’s leading venture capital firms, has raised a $365 million fund in just about 13 weeks.

“We’re extremely fortunate to have a fund close within a few months,” said managing director Navin Chaddha, who leads the fund, in an interview with VentureBeat. The company started its first set of fundraising meetings in the third week of April and had all financial commitments lined up within six weeks. The remaining few weeks were spent on legal issues, and the fund closed in the first week of July.

“It was a very, very quick process,” Chaddha said.

Mayfield XIV is the 43-year-old firm’s 14th fund and is its third consecutive fund under $400 million. Since its founding in 1969, the firm has invested in more than 500 companies, resulting in over 100 IPOs and more than 100 mergers or acquisitions, according to its press release. The last fund, Mayfield XIII, closed in September, 2008.

The relatively small size of the fund was a deliberate choice, Chaddha said, saying that it was oversubscribed: By raising a smaller fund, the firm is able to focus on early-stage investments and on backing entrepreneurs it believes in, rather than trying to pump hundreds of millions into oversubscribed late-round investments.

“We’re not chasing momentum. We’re not chasing late-stage investments,” Chaddha said.

The fund’s focus remains the same as previous funds:

• mobile
• cloud
• SaaS (software as a service)
• social for the enterprise, because social for the consumer is saturated
• big data applications
• energy efficiency

On the topic of social networking, Chaddha says the firm prefers to focus on enterprise applications, where there’s lots of opportunity, rather than on the already-saturated market for consumer social networks.

Regarding “green” technologies, Mayfield is interested in technologies that increase the efficient use of energy, but not in capital-intensive cleantech startups.

Like all VC funds, Mayfield is not actually collecting the $365 million in commitments right away. Instead, it will draw the funds from its limited partners over the 10-year life of the fund, as needed to make investments. It will draw about 10 percent of the fund in the first year and 10-20 percent in the second year. The goal is to invest 50 percent of the fund in the first four years, reserving the rest for follow-on investments (later rounds going to companies Mayfield has already invested in) in the remaining six years of the fund. Investments from Mayfield XIV will begin six to nine months from now.

Advice for entrepreneurs? If you have experience, Mayfield wants to hear from you. In fact, it makes 30-35 percent of its investments in entrepreneurs-in-residence, where Mayfield is essentially incubating its startups. These are individuals with a proven track record who Mayfield is investing in very early in their startup process, often before the entrepreneurs have even figured out what exactly they’re going to do next.

“We always make the bet on the jockey, not the racetrack,” Chaddha said. “We’re always looking for alignments with entrepreneurs early, before they’ve made their next bet. Our doors are open.”

Photo of Navin Chaddha courtesy Mayfield Fund

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

PayPal co-founder Peter Thiel must have a thing for Kiwis. He’s launching another venture fund focused on the otherwise unheard of New Zealand technology scene.

The fund, which Thiel is executing through his venture capital firm Valar Ventures, totals $32 million and received some money from the New Zealand Venture Investment Fund, according to the Wall Street Journal. Thiel is contributing roughly $12.1 million, with NZVIF and another organization picking up the rest.

According to New Zealand Minister of Economic Development Steven Joyce, the country needs this kind of fund not only for the money but also for the connections.

“[This] is a very positive development for New Zealand technology companies wanting to expand into large offshore markets,” Joyce told the Journal. “These companies require not only capital but also getting access to the right offshore networks in those markets and building their customer base.”

Recently, Valar Ventures invested a second time in New Zealand-based Xero, which creates accounting software for small businesses.

Thiel is otherwise known for being an early investor in Facebook and forhis creation of the Thiel Foundation, which encourages young folks to put off college and become entrepreneurs. Through the foundation, Thiel offers $100,000 to 20 people younger than 20 years old who have not gone to college and who have a business idea. The program is open to anyone around the world.

New Zealand dollar image via Shutterstock