Mayfield’s Old Guard Just Grew Smaller: Allen Morgan is Gone

Allen Morgan, a corporate attorney turned venture capitalist, has left Mayfield Fund, where Morgan has worked since joining the industry in 1999.

I reached out to the company early this morning, and I’m awaiting word back. In the meantime, I know that Morgan is making individual investments right now, including in Mashery, which helps companies manage APIs for their data. According to Thomson Reuters data, the two-year-old has raised about $8 million to date, including from .406 Ventures, First Round Capital, and individual investors like Morgan and CEO Marc Benioff.

This is the second big departure for Mayfield this year. Its highest-profile partner, Kevin Fong, left in January “to pursue other interests” said Mayfield. Mayfield also lost principal Chamath Palihapitiya to Facebook last year, just one year after bringing him into the firm from AOL.

The timing isn’t terribly surprising, given that the firm is planning to raise its next fund next year. Its twelfth fund closed with $375 million in the fall of 2005, without at least seven brand-name limited partners. (They didn’t participate because of low returns from the fund’s prior two funds, and disagreements over the handling of management fees, as Dan reported at the time.)

Mayfield was a high-flier during the late ‘90s tech boom, investing in IPO stars like BroadVision, Tibco Software, and Redback Networks. Its reputation was badly tarnished when the tech bubble collapsed, though, and as my friend Josh McHugh wrote in Wired in 2006, Morgan’s dotcom investments were hit hardest. “When you’re the new guy,” Morgan said at the time, “it’s bad when two of your first five deals go out of business.”

Morgan’s record since seemed to improve, though the hits were on the small side. He led Mayfield’s investment in Pluck, which sold to Demand Media for $75 million after raising $17 million. He also led Mayfield’s investments in Jotspot, which raised one round of funding for $5.2 million from Mayfield and Redpoint Ventures before selling to Google for an undisclosed amount. And Morgan backed SeriousMagic, backed with an undisclosed amount from Mayfield; it was acquired by Adobe in 2006 for an undisclosed amount. Mayfield’s investment in hot startup de jour, Slide, was also directed by Morgan.

It’s hard to say what’s in store for Mayfield — aside from an obvious changing of the old guard, which I imagine is being done to appease LPs. Like all venture firms, it’s continued to invest in some turds. Video service MovieBeam comes to mind. After original owner Disney lost $56 million on the company, Mayfield and several other firms inexplicably gave it $48.5 million. Less than a year later, it sold to a movie rental company for $10 million.

Yet Mayfield also looks to have an enormous hit on its hands with Aliph, maker of Jawbone, the increasingly popular — and necessary — Bluetooth headset. Mayfield joined its second round of funding in 2003, and has participated in each of the three rounds since. Aliph has raised roughly $42.5 million to date.

UPDATE: Mashery cofounder and serial entrepreneur Scott Rafer says Morgan has not backed Mashery but rather is an angel investor in another of his companies: Lookery, an angel-backed startup that places ads on social applications inside networks like Bebo and Facebook. Thanks, Scott.