A Founding GP Leaves Opus Capital Following Fundraising Challenges
When Intel Capital broke the news this morning that Ken Elefant (pictured) has joined as an investment director, it likely surprised industry observers. Elefant was a founding general partner with Opus Capital on Sand Hill Road, a role that one doesn’t relinquish easily.
It isn’t clear if the move is related to Opus falling short of its fundraising goals for its latest fund.
Asked earlier today why Elefant and Opus parted ways, Opus co-founder Carl Showalter said he’d “rather not comment on that.”
Showalter called Elefant “terrific” and said, “we’re very excited about his new role at Intel and look forward to working with him” in his new capacity.
Opus ran into fundraising difficulties for its most recent fund, according to the Wall Street Journal. The Journal reported in September 2009 that Opus had lowered the carried interest fee for its sixth fund to 20% from 25% due to fundraising difficulties, citing “two people familiar with the matter.”
Showalter said today that fund VI held a final close, but he declined to say how much money it raised, pointing me instead to an SEC filing from May 2010, which states that Opus Capital Venture Partners VI LP had a target of $175 million. The document states that Opus had not raised any capital for fund VI at that time.
If fund VI raised $175 million, it fell well short of its goal. Opus set out to raise $250 million and set a hard cap of $350 million, according to an August 2009 report by VentureWire, a WSJ sister publication. (The Montana Board of Investment committed $7.5 million to fund VI, VentureWire reported.)
Showalter says that firm has made a “number” of investments from fund VI. He declined to be more specific, saying “many are in seed and stealth mode.”
Opus struck out on its own back in 2005, closing on $280 million for its debut vehicle in 2006. That fund had produced a negative IRR of 8.1 percent, as of Dec. 31, 2010, according to the California Public Employees’ Retirement System, a limited partner in the fund. CalPERS committed $15 million to Opus Capital Venture Partners V LP in 2006. Of that amount, Opus has drawn down $10.11 million. CalPERS has received close to $1.1 million in cash back, and it estimates that the cash and “remaining value” of its Opus investment is worth $8.6 million. (We were unable to find any record of CalPERS being an LP in Opus’s most recent fund.)
Opus grew out of Lightspeed Venture Partners. At its outset, nearly all of Opus’s members came from Lightspeed and it was spearheaded by Lightspeed alums Showalter and Gill Gogan. Other founding GPs included Elefant, formerly a senior associate at Lightspeed, and Isaac Applbaum, formerly a partner and managing director for Israel at Lightspeed.
Applbaum is now a special advisor to Opus and several other venture firms, says Showalter. Mark Michaels, another founding GP, who had previously been a founding partner at Crossroads Capital Partners, left in 2007. A sixth founding GP, Dan Avida — an entrepreneur who co-founded the secure network data storage company Decru, which sold to Network Appliance for $272 million in 2005 — remains at Opus.
The Opus team also includes Opus Bob Borchers, who joined Opus as a GP two years ago from Apple, where he was senior director of worldwide product marketing for the iPhone.
Asked about the health of the firm, Showalter told me, “We’re making new investments.”
Our database shows the firm backed 19 companies out of its 2006 fund, putting in an average of $5.4 million per company. Three of them have exited.
Spock Networks, a “people” search engine that was founded in 2006 and raised $7 million from Opus and Clearstone Venture Partners, was acquired for an undisclosed amount in 2009 by Intelius, which conducts online background checks.
The social app creator Transpond, which was formed in early 2007 and raised $4 million from Opus and The University Venture Fund, sold for an undisclosed amount in August of last year to the Web analytics company WebTrends.
Kidaro, which helps businesses manage their collection of virtual machines, raised $14 million from Opus, Storm Ventures and Genesis Partners, was sold to Microsoft in 2008 for an undisclosed amount.
We show just two investments made from Opus’s most recent fund: It has backed 4-year-old SpiderCloud Wireless and 11-year-old Telespree Communications.
SpiderCloud — which makes a a product called an Enterprise Radio Access Network (E-RAN) that can be used to manage wireless usage within a company or government office — has raised $39 million from Opus, Charles River, Matrix Partners, and Shasta Ventures. Telespree, another wireless communications company, has raised a total of $45 million, including from Derwent London, Alcatel-Lucent Ventures and Peninsula Ventures.
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