Sevin Rosen venture capital partners splitting up
SAN FRANCISCO (Reuters) - Four Silicon Valley partners of Sevin Rosen Funds, a tech-focused venture capital firm, will not join their Dallas partners to raise a new investment fund, one partner from each group said on Friday.
Sevin Rosen -- which is known for backing huge successes like Compaq Computer Corp and Electronic Arts (ERTS.O) but has struggled to make big hits on recent investments -- is the latest in a handful of highflying VC firms that have recently shelved funds or seen partners scatter to other firms.
John Jaggers, Sevin Rosen's Dallas-based managing partner, said he plans to raise the firm's next fund in the second quarter, but refused to disclose details except to say it would be roughly the size of its previous fund, which was $300 million.
The separation at Sevin Rosen came after a tumultuous process lasting 15 months, said Steve Dow, one of the Silicon Valley partners who are now listed as "partners emeriti" on the firm's Web site.
In October 2006, Sevin Rosen decided not to close its tenth fund and returned between $250 million and $300 million of capital already committed to it, citing a saturated VC market and a "weak" exit environment.
These external factors, coupled with irresolvable debates on the right investment strategy, led to the separation, Dow said.
"There were lots of questions on the VC industry changing and should we go big or small," he said.
There were differences over whether the firm should do bigger deals, focus on specific areas or invest globally, Dow added.
Dow said he now plans to invest mostly his own money in new ventures. Another partner, Nick Sturiale, is joining the venture capital arm of private equity giant Carlyle Group
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Jaggers and other venture capitalists said such breakups were part of the natural wear and tear of an industry adapting to change and does not foretell a slowing of fund-raising.
"I see this more as part of the natural cycle of things," said Jaggers. He said a few of Sevin Rosen's original partners left in the 1980s, while others stayed on to raise new funds.
Mobius Venture Capital, which backed companies like VeriSign Inc (VRSN.O) and E*Trade Corp (ETFC.O), and Worldview Technology Partners are among others to have canceled funds recently.
Partner turnovers and breakups are inevitable in an industry dominated by "very strong-willed personalities -- they have egos, you're always going to see people not making it, like marriages," said Mark Heesen, president of the trade group National Venture Capital Association.
"But there are about 740 other VC firms that are not" breaking up, he added.
The rise of global opportunities, especially in the emerging markets of China and India, is creating spirited differences of opinion between those venture capitalists who want to raise large global funds and those who prefer to focus regionally, said Paul Gompers, a professor of business administration at Harvard Business School.
"It's definitely a harder business today than it was eight to 10 years ago, and you have to be patient," said Gompers.
(Editing by Gary Hill)
