Walden Venture Capital has closed its eighth fund with a total of $107 million, which it will use to pursue investments in digital media and cloud companies. (Disclosure: Walden is an investor in VentureBeat.)
Walden focuses on what it calls "sprout stage" investments -- a cute way of describing post-seed companies that have "sprouted" and are showing some customer traction. The firm typically invests $1 million to $4 million and prefers to take the lead investor position.
"I saw a marked shift in attitude toward venture capital" compared to 2008 and 2009, managing director Matt Miller told VentureBeat. "Back then, there was little appetite for venture capital at all, and hedge funds or oil deals were all the rage. ... Now that venture returns have come up and there have been a number of high-profile exits, demand for venture capital is back."
In addition, Miller said Walden's pitch was resonating with large investors who want to get in on the seed-stage and angel-stage action but whose capital far exceeds the capacity of most angel funds to absorb it.
"Pensions, endowments and banks need to invest $10, $20, or $50 million in a fund and these numbers often exceed the size of the angel funds," Miller said. "Think of how many deals a $100 million angel fund would need to do if they kept their checks down to $100-$200K!"
Walden, then, provides a middle ground between angel funds and traditional VC funds, giving those limited partners access to early-stage investment opportunities, but at a scale that makes sense for them.
Despite its name, Walden Capital is based in San Francisco and Woodside, California, not Massachusetts. The firm was founded in 1974. Previous investments include Gymboree, Niku, Vitalstream, Pandora, SoundHound, Aarki, and Blue Lithium.