Slideshow: Accel-erating Returns at the Top-Tier VC

Accel Partners has hit some serious, major home runs. Until the mid-1990s, the venture capital firm included healthcare plays in its investing strategy that focused on tech startups; just as the dot-com bubble began to inflate, Accel shifted its strategy into a more Internet-centric focus. After a lull last decade cost the venture capital firm some of its limited partners, including, reportedly, Harvard, the top-tier VC proved to its critics why it’s the cream of the crop among early-stage investors. But, in fact, Accel has always been a backer of some of America’s biggest businesses since its 1983 founding. From Wal-Mart to Facebook, Accel identified early-stage prowess at some of the most successful enterprises of the last 30 years, and its limited partners—provided they stuck around through the tough times—have benefited immensely. Along the way, Accel has signed up new boldface-name partners, including KKR (for the Accel-KKR tech-focused middle market PE firm) and, more recently, International Data Group, for Chinese investments. Earlier this month, Accel just accelerated its way to a pair of new funds totaling more than $1.3 billion. peHUB sizes up some of Accel’s biggest deals, past independent funds and future vehicles in today’s slideshow.

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[slide title=”Accel Partners Fund III”]

Vintage: 1989—Accel Fund III

IRR: According to pension data, the $100 million fund racked up an IRR of 14.66% since its inception. (Source: Colorado PERA)

[slide title=”Accel Partners Fund IV”]

Vintage: 1993—Accel Fund IV

IRR: Counting an early investment in MetroPCS, this $136.1 million fund produced for investors an IRR of 77.9%–only serving as a appetizer of what was to come. (Source: Colorado PERA)

[slide title=”Accel Fund V”]

Vintage: 1996—Accel Fund V

IRR: Coming at the earliest stages of the dot-com bubble, Accel’s 1996 $150.1 million fund would produce gaudy stats no LP could ignore—their net IRR was reportedly 188% on the fund that backed Redback Networks. (Source: Prequin data)

[slide title=”Accel Fund VI”]

Vintage: 1998—Accel Fund VI

IRR: peHUB couldn’t turn up fund return information on this one, and Accel declined to provide us comment. This $275 million fund would go on to back Food.com, however, investors (including Harvard) that chose to back out of Accel’s mid-00s funds reportedly did so after seeing lackluster returns on investments.

[slide title=” Accel Fund VII”]

Vintage: 1999—Accel Fund VII

IRR: peHUB couldn’t turn up fund return information on this one, either, and Accel declined to provide us comment. While the 1999, $500 million fund came in the thick of the dot-com craze, Accel still managed to guide this one into a few winners, including a later-stage investment in MetroPCS.

[slide title=”Accel Fund VIII”]

Vintage: 2000—Accel Fund VIII

IRR: Yikes! Well, they can’t all be gems. Accel’s $1.5 billion 2000 fund came at a poor time for investors, and when it generated a -26.8 IRR, it also generated a lot of angst with the venture capital firm. Accel’s next fund would be less than a third of what its 2000 vehicle reeled in, but the joke was on the investors who didn’t re-up with the VC after its losing effort… (Source: University of California Treasurer of the Regents)

[slide title=”Accel Fund IX”]

Vintage: 2005—Accel Fund IX

IRR: For a fund from 2005, it is probably too early to estimate IRR correctly. But one thing’s for certain—when you’re the investor who invests, not in Facebook, but Facebook when it went by “thefacebook.com,” you’re going to come out in the black. It remains to be seen whether this early-stage investment translates into the biggest VC success ever since JPMorgan was a seed investor, but expect Accel’s ninth, $440 million fund to put up hall-of-fame numbers.

[slide title=”Accel Fund X”]

Vintage: 2007—Accel Fund X

IRR: It is too early to guess an IRR for this fund, but one can only expect returns will be positive. Accel’s tenth, $520 million fund got into Groupon early, and investors will hope the VC’s market timing with its daily deals juggernaut will generate maximum IRR.

[slide title=”Accel Fund XI”]

Vintage: 2011—Accel Fund XI

IRR: Back in business as two of its investments from two prior funds prove to be smashing successes, Accel sells shares through an equity sale in Groupon’s fundraising, and, separately, unloads a portion of its Facebook stake at a nearly-incomprehensible premium. This June, Accel closed funds for $1.35 billion consisting of $475 million early-stage venture capital fund, its Fund XI, and its second growth-stage fund, at a staggering $875 million. This will be separate from other vehicles Accel is currently running globally with partners like KKR and IDG.
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