SAN FRANCISCO, May 17 (Reuters) - Kleiner Perkins Caufield & Byers said it had raised a $525 million fund, less than its previous comparable fund of $650 million, reflecting a school of thought in Silicon Valley that smaller venture-capital funds often outperform large ones.
The fund also has a majority of partners, known as managing members, who focus on technology rather than green investments and the environment, marking a shift away from an investment area that Kleiner had tried to carve out as its own.
KPCB XV, as the fund is called, lists technology-focused partners such as Mike Abbott, Chi-Hua Chien and Bing Gordon as managing members.
While green-investments champion John Doerr is also on the list, managing partner Ray Lane, known for investments in companies such as clean-automaker Fisker and solar company Ausra, is not.
A smaller emphasis on clean tech, as investments in fields such as solar energy and electric automobiles are known, could help trim the firm’s investment bills. Straight-up technology companies, especially Internet-focused ones, typically require less money to grow than do clean-tech companies, especially at the early stages, where this fund is focused.
There are also public relations reasons to cut the size, with many big funds coming under fire for lacking the nimbleness needed to invest in smaller, growing companies.
A recent report from the Kauffman Foundation, an organization that studies and promotes entrepreneurship, said that of the funds in its own investment portfolio that raised more than $500 million, none returned more than twice its invested capital after fees.
Still, a handful of firms continue to focus on outsized funds. Last quarter, Andreessen Horowitz raised $1.5 billion, the firm’s largest fund to date. New Enterprise Associates is raising a fund that could reach $2.3 billion.
Although it has closed, regulations allow Kleiner’s fund to grow to as much as $575 million after final investments are factored in.
Some of Kleiner’s recent early-stage investments include Zynga, online retailer One King’s Lane and smart-thermostat maker Nest.
Kleiner raised its previous KPCB XIV in 2010. It has also raised a $1 billion digital-growth fund and a $250 million SFund to invest in social media.