Aydin Senkut’s Felicis Ventures Raises $70M; Could Have Closed on $100M

Sitting in the lobby of the St. Regis hotel in San Francisco, Aydin Senkut, Sundeep Peechu, and Renata Quintini don’t exactly come across as Silicon Valley power players. None of them is wearing a perfectly pressed blue button-down, or sitting expansively in the hotel’s oversize chairs.

But Senkut, a former Googler born in Turkey; Peechu, a former Intel product manager born in India; and Quintini, a South American-born lawyer who most recently worked as an LP at the Stanford Management Company, are a powerful combination — and institutional investors have noticed. In fact, their young firm, Felicis Ventures, is announcing today that it has raised a $70 million second fund, a vehicle that is nearly twice the size of the firm’s first, $40 million fund, closed in 2010.

And it was oversubscribed by 42 percent, says Senkut.

“We could have raised $100 million, but we believe in having some scarcity of capital,” he says. “If we had $100 million, would we make the same [investing] decisions? I don’t know.”

Certainly, Senkut has reason to trust his own instincts. Within months of ending a six-year-long career at Google in October 2005, Senkut had established Felicis out of his San Francisco home and was trying to differentiate himself from the pack. As he told me in 2006, “[M]ore famous people like [angel] Ram [Shriram] have less time to mentor companies. One of the reasons a startup might want to work with me…is that I can help them more with day-to-day stuff.”

For much of the following four years, Senkut worked his way into some of the most promising deals in Silicon Valley, thanks partly to angel veterans like Ron Conway, who welcomed new seed investors on to the scene and even advised them how to value a company in some cases. (Said Conway to me at the time, “I tell them that if the entrepreneur isn’t experienced, it’s a $2 million deduction. If there’s a prototype, that’s plus $1 million on the valuation.”)

By August 2010, Senkut had already invested in 60 deals, 15 of which had been acquired, including Powerset (sold for a reported $100 million to Microsoft) and Mint (sold for $170 million to Intuit). He had also scooped up Peechu and Quintini as principals and spent six months talking with outside investors. They readily gave Felicis $40 million to invest.

That those same LPs have showered more money on the firm less than two years later isn’t a shock. Today, Felicis boasts 80 investments over the life of the firm and 28 exits – the most recent of which was the sale of mobile commerce startup Karma to Facebook for an undisclosed amount.

And while the outcomes haven’t been enough to return that $40 million in the less than two years since it was raised, Senkut says that the unrealized value of one-fourth of the portfolio alone is roughly $100 million. (Two of the hottest companies in its portfolio are “Angry Birds” maker Rovio, which has raised a collective $42 million and is allegedly preparing a 2013 IPO, and the e-commerce platform Shopify, which has raised $22 million to date.) In the meantime, its LPs have been getting regular distributions, a claim that many firms can’t make.

“I lucked out,” says Senkut, who promoted Peechu and Quintini to partner with Felicis’s newest fund. “When I started out as an investor, I was shadowing Ron [Conway]. Some of my friends were helping me. I was working and overlapping with [famed Stanford computer science professor] Rajeev Motwani. I was also early into Y Combinator, when it had just 50 or 60 investors [scouring the program for interesting startups] and not 500 investors like today. It was a really good time in terms of great companies getting created.”

But Felicis’s team also works hard, he says, making explicit that the firm’s numbers so far are no short-term fluke.

Says Senkut: “We want to find iconic companies” in certain areas of interest, including e-commerce, education, enterprise and health. “And we’ll do what we have to to get to them. If a company is in Silicon Valley, great. If it’s in Finland, we’ll fly to Finland and make it happen.”

Senkut points to rapidly growing Shopify, based in Ottawa. “We made it up to Ottawa and worked really hard on getting that deal. The crazy thing is that plenty of other VCs could have done it [instead]. But they didn’t bother leaving Silicon Valley.”

Image credit: Aydin Senkut speaks at Venture Capital Journal’s Venture Alpha conference in October 2011. Photo by Oscar Urizar. Property of Thomson Reuters.