Shasta Confirms It Raised Third Fund, Beats Target in Tough Environment

Four months after peHUB reported that Shasta Ventures was in the market for a third fund, the Silicon Valley venture firm announced today that it has raised $265 million for Shasta Ventures III LP.

Thanks to positive IRRs on its first two funds, Shasta came in above target on its third vehicle despite a difficult fundraising environment. Shasta said in a July 15 regulatory filing that it planned to raise $200 million.

In an apparent bid to capture the attention of technology entrepreneurs, the early stage tech firm broke the fundraising news on TechCrunch, a popular technology blog. Shasta, based in Menlo Park, Calif., did not issue a press release.

Tod Francis — co-founder of the firm and one of its four managing directors — told TechCrunch that the new fund’s limited partners were mostly existing investors, but he didn’t disclose any LP names.

The California Teachers’ Retirement System (CalSTRS) was an investor in the firm’s first two funds and the Teachers’ Retirement System of the State of Illinois was an investor in fund I, according to Thomson Reuters (publisher of peHUB).

CalSTRS reported on Sept. 30, 2010, that Shasta’s first two funds have positive internal rates of return. (A more recent report is unavailable.)

CalSTRS committed $21 million to Shasta’s debut fund, of which $17.85 million has been drawn down. It has received distributions totaling $3.98 million and reports that the fund has an IRR of 4.17 percent since its 2004 inception.

CalSTRS committed $22.5 million to Shasta Ventures II, of which $9 million has been called down. CalSTRS has not received any cash distributions from that 4-year-old fund, but it reports that it has an IRR of 3.34 percent.


  • The market can’t be that bad if a fund that isn’t all that notable and only had a single real hit can raise a third round after returning ~4% on the previous two

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  • todd… VC funds typically have 12 year terms, so Shasta I is likely only slightly more than half way through its investment cycle and Shast II a third of the way through… welcome to the J-curve of PE.

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