Sevin Rosen Funds pulled the plug on fundraising for its 10th fund by sending a letter to its limited partners saying there was too much money chasing too few deals last October. At the time, pundits said the firm needed to rethink its strategy and adapt.
Some people close to the firm told PE Week that there was discord between the firm’s Dallas and Palo Alto, Calif. offices. And the data seem to bear out that something has shifted inside the firm.
Since its mid-October missive, the firm has invested $22.5 million in 12 companies according to Thomson Financial (publisher of PEHub.com). Seven of the 12 companies it backed have their headquarters in Texas, nearly 60%, and only three of the 12 deals are associated with investors based in the firm’s Palo Alto offices. Historically, the firm has invested about 44% of its funds in California-based companies and 33% of its funds in Texas-based companies.
The firm made three new investments since mid-October, each originated from its Dallas office. You can download a spreadsheet of the firm’s recent deals.
I swapped emails with General Partner Steve Dow last month to find out where SRF stood on its soul searching. He said the firm was not ready to talk yet, but that “…the VC environment has not materially changed or improved.”
One thing that has changed is the firm’s website, which underwent a redesign sometime in the past couple of months. It also added Dr. William D. Paiva as a life sciences venture partner operating out of Dallas last October.