With valuations of private companies climbing higher and higher, some venture capital firms have a simple solution: Larger funds.
Venture firm IVP has raised its biggest fund yet at $1.5 billion
A sign of the times.
Drew Angerer / Getty
IVP, the firm founded 35 years ago that specializes in later-stage investments, on Tuesday said it had raised its largest fund yet — a $1.5 billion pool of money that is their 16th in the venture business.
Some of IVP’s most well-known investments in recent years include Twitter, Slack, Dropbox and Snap, though they tended to invest in those companies after some earlier-stage venture firms had discovered them.
IVP said their ability and eagerness to deploy so much cash showed that the firm was an “island of stability in the midst of the storm.”
“There’s been all kinds of bad publicity about the venture business. Valuations are too high. There’s too much money in the sector. People misbehaving,” Sandy Miller, one of the firm’s general partners, told Recode. IVP’s fund is “basically a validation that this is a healthy environment.”
IVP expects to invest in 35 to 40 companies over the 10-year fund’s lifespan; check sizes range from $10 million to $100 million.
The firm is still awaiting several large exits from some of its prospects. Dropbox is strongly expected to go public either late this year or early next year; Slack’s path toward an IPO was perhaps delayed by the millions it just accepted from SoftBank’s $100 billion Vision Fund.
Miller said, though, that the Vision Fund could be a force for good.
“The Vision Fund is a wild card but could be a significant factor in terms of exits for venture,” he said, explaining that investors have “new vehicles” for liquidity by possibly selling their stakes to SoftBank.
And as for Snap, which has sharply fallen since going public earlier this year?
“We’ve been disappointed with what happened in the public marketplace,” Miller said. “Whatever companies are losing money and have this high a profile — they’re going to be very volatile in the public market. But volatility can go in both directions.”
This article originally appeared on Recode.net.
