Mayfield Closes Fund XIV at $365M After Speedy Fundraising
By Russ Garland | Menlo Park, Calif.
Mayfield Fund wrapped up its fourteenth fund Tuesday at its $365 million hard cap, firmly committed to its early-stage investment strategy.
Mayfield XIV is smaller than its $395 million predecessor because the Menlo Park, Calif., firm is aiming for a slightly shorter investment cycle of about 3.5 years, said Navin Chaddha, the managing director who leads the firm.
"If we had a later-stage strategy, which we don't, we could have raised over $500 million," he said.
The firm expects to back 30 to 33 technology companies from the new pool, which it will begin deploying late this year or early next. Mayfield has an active entrepreneur-in-residence program, which generates about 30% to 35% of the start-ups that the firm supports.
Mayfield, which also has an India-focused fund, invests mainly in U.S.-oriented companies from its main fund and also favors enterprise and Internet infrastructure plays over consumer-facing companies, although it doesn't shy away from those, especially when they involve mobile technology. In September, the firm added Tim Chang as a managing director to concentrate on gaming, digital media and mobile investments. Mr. Chang moved to Mayfield from Norwest Venture Partners.
Besides Mr. Chaddha and Mr. Chang, the new fund's general partners are Robin Vasan, Rajeev Batra and James Beck, the firm's chief operating officer. Yogen Dalal and Janice Roberts, who were GPs in the prior fund, will become venture partners with the new fund as part of a generational transition that has been underway for several years, Mr. Chaddha said. Both will continue to advise the firm.
Another current Mayfield managing director, Raj Kapoor, is not a general partner in the new fund. Mr. Chaddha said Mr. Kapoor plans a new venture once the current Mayfield fund is committed through which he will launch several start-ups, but his relationship with Mayfield has not been decided. Mr. Kapoor was CEO of online photo service Snapfish before joining Mayfield.
Mayfield officially launched its latest fundraising in early April and completed it in about 100 days at a time when many limited partners are rethinking their venture programs. Mr. Chaddha said Mayfield has more than 40 LPs and added several new ones, as it looks to do with every fundraising. These were mainly endowments and a few public pension funds that have decided to make direct investments rather that going through funds of funds, he said. The firm declined to name its LPs.
Mayfield is notable in that it is one of the few venture firms with a budgeted management fee, set each year based on consultations with limited partners instead of being a standard 2% or so of committed capital. Mr. Chaddha said that for the current fund, the fee worked out to less than 1% per year. He declined to disclose the carried interest on the new fund but said there was no change to that or any other term.
Mayfield's biggest exit since closing its prior fund in September 2008 was the acquisition of 3PAR Inc. by Hewlett-Packard Co. for about $2.1 billion. Although the data-storage company was publicly held at the time, Mayfield and two other venture firms still owned about 38%.
Mr. Chaddha said he expects most of Mayfield's exits to come from M&A, although it has stakes in several companies on track to become public, including SolarCity Corp., a solar installation and leasing company.