Institutional Venture Partners

Last updated
IVP
Company type Private
Industry Venture capital
Founded1980;44 years ago (1980)
FounderReid Dennis
Headquarters Menlo Park, California, U.S.
AUM $7.0 billion
Number of employees
~30+
Website www.ivp.com

Institutional Venture Partners (IVP) is a US-based venture capital investment firm focusing on later-stage companies and growth equity investments. IVP is one of the oldest venture capital firms, founded in 1980.

Contents

History

Reid W. Dennis, the founder of Institutional Venture Partners, began his venture investment career in 1952. [1] Dennis was working as an analyst with the Fireman's Fund Insurance Company at the time. [2] He began by making an individual investment into Ampex, a technology company that developed audio tape products. [1] He also developed an informal network of screened individual investors (now called angel investors). [2]

In 1974, Dennis secured a $5 million commitment from American Express and formed Institutional Venture Associates. [3] The new firm then raised $19 million from six insurance companies for its first fund. [4] That figure represented nearly half of all the capital raised in the United States that year by private venture capital partnerships. [3] IVA's assets under management grew to $180 million by the end of the decade. [4]

In 1980, the two other partners in IVA left to form their own funds. [5] Dennis then changed IVA's name to Institutional Venture Partners and raised a $22 million fund. [5] Among the investments from that first IVP fund were Seagate, LSI Logic, and Stratus Technologies. [6] Another fund was raised in 1982, this time for $40 million, and more funds soon followed. [7] In 1983 Mary Jane Elmore became a general partner, [8] making her one of the first female venture capital partners in the United States. [9]

In 1988 the firm was able to raise $115 million for its fifth fund. [7] Dennis brought on a new partner, Norm Fogelsong, in 1989. [5] Four other partners would eventually join the firm as well, [5] including Ruthann Quindlen in 1994. [10] In 1999, three partners from IVP joined with three partners from Brentwood Venture Capital to form two new firms: Redpoint Ventures, which would specialize in early stage digital media and internet companies, [11] and Versant Ventures, which would focus on health science investments. [12] The split into three firms allowed IVP to continue to manage its own portfolio [13] and invest in fast-growing technology companies. [14]

By 2008, IVP had invested in around 200 companies and executed around 85 IPOs, including Seagate, TiVo, and Netflix. [15]

Dennis stepped down from his position as general partner ahead of the firm's twelfth fund in 2010, which raised $600 million. [16] Two years later, the firm raised $1 billion for its fourteenth fund. [17] This fund was the largest in IVP's history and brought the firm's total committed capital to $4 billion with a portfolio that included Buddy Media, Dropbox, and Twitter. [17] IVP's sixteenth fund raised $1.5 billion in 2017, [18] its seventeenth fund raised $1.8 billion in 2021, [19] and its eighteenth fund raised $1.6 billion in 2024. [20]

In August 2023, IVP opened its first international office in London. [21] The expansion to Europe reflected the firm's growing portfolio of European startups, including DeepL, MySQL, Supercell, UiPath, and Wise. [21]

IVP founder Reid Dennis passed away in March 2024. [22]

Operations and investments

In an interview with TechCrunch , general partner Jules Maltz said that IVP wants to focus "on the 10 to 12 fastest growing, most prominent late stage tech companies each year, and fund those businesses.” [17]

IVP opens individual venture funds and then asks for financial commitments from limited partners. [18] Limited partners in IVP's funds have historically included university endowments, public pension funds, funds of funds, and wealthy individuals. [14] Every IVP fund has different fund managers. [23]

The firm is headquartered in Menlo Park, California. [17] It also maintains offices in London and San Francisco. [21] [24]

Notable investments
YearCompanies
2020s DeepL, [25] Discord, [26] Perplexity.ai [27]
2010s Amplitude, [28] ArcSight, [29] Buddy Media, [30] Coinbase, [31] CrowdStrike, [32] Datadog, [33] Dropbox, [34] Grammarly, [35] HashiCorp, [36] LegalZoom, [37] Rubrik, [38] Slack, [39] Snap, [40] Supercell, [41] Wise [21]
2000s HomeAway, [42] Kayak, [43] LifeLock, [44] Marketo, [45] MySQL, [46] Twitter [47]
1980s–1990s Juniper Networks, [48] Netflix, [49] Polycom, [50] Seagate [51]

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References

  1. 1 2 "Five Questions With Reid Dennis, A VC Investor Since 1952". The Wall Street Journal. Dow Jones & Company, Inc. June 24, 2009. Retrieved January 30, 2024. Since Reid Dennis made his first venture-style investment in 1952 in the emerging technology of the day – the Ampex Corp. tape recorder – he has been hooked on building small start-ups into viable businesses. After putting about $20,000 into Ampex, and eventually getting about $1 million back, he co-founded Institutional Venture Partners, which today is a thriving firm with more than $2 billion in committed capital and investments in such notable companies as Netflix Inc., TiVo Inc. and Ask.com Inc.
  2. 1 2 Gupta, Udayan (September 1, 2000). Done Deals: Venture Capitalists Tell Their Stories. Harvard Business Publishing. p. 179. ISBN   0875849385 . Retrieved January 31, 2024– via Internet Archive. Even while Dennis was employed as an analyst by the Firemen's Fund in 1952, he established an angel network among friends and colleagues, screen entrepreneurs at lunch and funding them if they fit the bill.
  3. 1 2 Gupta, Udayan (September 1, 2000). Done Deals: Venture Capitalists Tell Their Stories. Harvard Business Publishing. p. 179. ISBN   0875849385 . Retrieved January 31, 2024– via Internet Archive. In 1974, Reid backed by a $5 million commitment from American Express, formed Institutional Venture Associates and raised $19 million from six institutions—nearly half of the capital raised in the United States that year by private venture capital partnerships! Over the life of IVA, the original $19 million grew to over $180 million. This now old-fashioned strategy made Dennis a wealthy man even before he established IVP in 1980. Among the investments in that first IVP fund were such companies as Seagate, Collagen, LSI Logic, and Stratus Computer.
  4. 1 2 "Venture veterans". Private Equity Manager. PEI Media LTd. August 31, 2008 – via Nexis. The firm's patriarch is Reid Dennis, who began investing in Silicon Valley start-ups in 1952. He founded IVP's predecessor, Institutional Venture Associates, in 1974, with backing from American Express, for whom he had previously managed mutual funds. He raised $19 million from six insurance companies for IVA's first fund. By the end of that decade IVA's assets under management had grown to $180 milllion. The firm, which focuses on internet/digital media, enterprise IT, and communications/wireless, has invested in some 200 companies, and executed around 85 IPOs over the years. Among them are Silicon Valley success stories like Seagate Technology, LSI Logic, TiVo and Netflix.
  5. 1 2 3 4 Harris, Jennifer (September 1, 2008). "Institutional Venture veterans". Private Funds CFO. PEI Group. Retrieved January 31, 2024. In 1980, Dennis's two partners, Burt McMurty and Burgess Jamieson, left to from their own funds, Technology Venture Investors and Sigma Partners, respectively. Dennis remained, changed the name of his firm to Institutional Venture Partners, and raised a $22 million fund. In 1989 Dennis brought on partner Norm Fogelsong, and over the next two decades four other partners — Todd Chaffee, Steve Harrick, Sandy Miller, and Dennis Phelps — joined the firm as well.
  6. ↑ "IVP raises $300m for fund XI". Private Equity Week. Thompson Financial. December 6, 2004 – via Nexis. Dennis founded IVP in 1980 and the firm now has more than $1.6 billion in capital under management. And among the investments in that first IVP fund were such companies as Seagate, Collagen, LSI Logic and Stratus Computer.
  7. 1 2 Wright, Mike; Robbie, Ken (March 23, 2022). Venture Capital. Taylor & Francis. p. 18. ISBN   9781351876087 . Retrieved January 31, 2024. In 1982 the IVP management company raised $40 million in a fund called IVP II. The group raised $96 million in 1985, launching IVP III, which was followed in 1988 by IVP IV, a $115 million fund.
  8. ↑ Russell, Melia (February 7, 2022). "Cack Wilhelm's 'superpower' is her competitive drive and it's served her well her entire career. Now, she's the first woman promoted to general partner at IVP since 1983". Business Insider. Retrieved January 30, 2024. On Monday, IVP promoted Wilhelm to general partner after three years with the late-stage firm. She becomes the firm's second-ever female general partner following Mary Jane Elmore's promotion in 1983.
  9. ↑ Guthrie, Julian (May 21, 2019). "How can women survive Silicon Valley and thrive? 'Alpha Girls' excerpt lays it all out". San Francisco Chronicle. Retrieved January 30, 2024.
  10. ↑ Markoff, John (April 13, 1997). "Seeking the Software Stars of the Future". The New York Times. Retrieved January 30, 2024.
  11. ↑ Om Malik (September 23, 1999). "Even for VCs, bigger is better". Forbes. Retrieved October 16, 2016.
  12. ↑ Kleinbard, David (April 13, 1997). "The Gods of capitalism". CNN Business . Retrieved January 30, 2024.
  13. ↑ Southwick, Karen (August 3, 2001). The Kingmakers: Venture Capital and the Money Behind the Net. Wiley. p. 184. ISBN   9780471395201. IVP, which will continue to manage the existing portfolio while Redpoint focuses on new investing in Internet technology, has bequeathed the new firm its valuable facility on Sand Hill Road.
  14. 1 2 Meikle, Brad (December 6, 2004). "IVP Raises $300 Million for Fund XI". Buyouts Insider. PEI Group. Retrieved January 30, 2024. IVP invests in expansion-stage IT companies. Its portfolio includes Cupertino, Calif.-based ArcSight, which provides enterprise security management services; IDUN Pharmaceuticals, a San Diego-based drug provider that focuses on neurological disorders; and Vonage, an Edison, N.J.-based VoIP provider.
  15. ↑ Harris, Jennifer (September 1, 2008). "Institutional Venture veterans". Private Funds CFO. PEI Group. Retrieved January 31, 2024.
  16. ↑ Jacobius, Arleen (February 8, 2010). "After storm, who will be left?". Pensions & Investments. Retrieved January 30, 2024. Some firms have managed to make the transition gracefully. Reid Dennis, founder of Institutional Venture Partners, switched to strategic partner when the firm raised its last fund, $600 million IVP XII, said Todd C. Chaffee, general partner. The five general partners on the firm's 12th and latest fund had been with the firm for a decade.
  17. 1 2 3 4 Taylor, Colleen (June 28, 2012). "Institutional Venture Partners Raises $1 Billion For Fund XIV, Its Biggest Yet". TechCrunch. Retrieved January 30, 2024.
  18. 1 2 Katie Roof (September 26, 2017). "IVP announces $1.5 billion venture fund". TechCrunch. Retrieved October 16, 2016.
  19. ↑ Roof, Katie (May 12, 2021). "IVP Raises $1.8 Billion Fund for Growth-Stage Startups". Bloomberg. Retrieved January 30, 2024.
  20. ↑ Garfinkle, Allie (March 19, 2024). "Exclusive: IVP has raised $1.6 billion, marking its 18th fund". Fortune. Retrieved March 20, 2024.
  21. 1 2 3 4 Martin, Iain (August 14, 2023). "Why IVP Is Betting On Europe Even As Other U.S. Investors Draw Back". Forbes. Retrieved January 30, 2024.
  22. ↑ Garfinkle, Allie (March 19, 2024). "Exclusive: IVP has raised $1.6 billion, marking its 18th fund". Fortune. Retrieved March 20, 2024. Last week, Dennis passed away at the age of 98.
  23. ↑ Garfinkle, Allie (March 19, 2024). "Exclusive: IVP has raised $1.6 billion, marking its 18th fund". Fortune. Retrieved March 20, 2024. The firm doesn't have a CEO or managing partner, and every fund has new owners, each time starting over—it's a partnership, where nothing gets grandfathered in, sort of like how George Carlin used to go on tour, then generate new material, never wanting anything to get stale.
  24. ↑ "Institutional Venture Partners Opens SF Office". PitchBook. February 28, 2014. Retrieved January 30, 2024.
  25. ↑ Shrivastava, Rashi (August 8, 2022). "This German Unicorn Is Trying To Take On Google Translate And ChatGPT". Forbes. Retrieved January 30, 2024.
  26. ↑ Winkler, Rolfe; Needleman, Sarah E. (August 19, 2018). "Discord Valued At $1.65 Billion In New Funding Round". Wall Street Journal. Retrieved January 30, 2024.
  27. ↑ "Perplexity AI valued at $520 mln in funding from Bezos, Nvidia". Reuters. January 4, 2024. Retrieved January 30, 2024.
  28. ↑ "Amplitude Raises $30m in Series C Funding". FinSMEs. August 10, 2017. Retrieved January 30, 2024.
  29. ↑ "The Daily Start-Up: Kleiner Perkins Profits Big From ArcSight Sale". The Wall Street Journal. September 13, 2010. Retrieved February 1, 2024.
  30. ↑ "Buddy Media Raises $23 Million For Brand-Focused Facebook Page Management Platform". TechCrunch. October 18, 2010. Retrieved February 1, 2024.
  31. ↑ "Coinbase investor explains why he's bullish on blockchain but steering clear of ICOs". CNBC. January 26, 2018. Retrieved January 30, 2024.
  32. ↑ Charlie, Charlie (May 15, 2019). "Cybersecurity unicorn CrowdStrike files to go public on the Nasdaq". ZDNET. Retrieved January 30, 2024.
  33. ↑ "Cloud firm Datadog looks to raise about $718 million in IPO". Reuters. September 17, 2019. Retrieved January 30, 2024.
  34. ↑ "Dropbox Raises $250M In Funding, Boasts 45 Million Users". TechCrunch. October 18, 2011. Retrieved February 1, 2024.
  35. ↑ Lunden, Ingrid (October 10, 2019). "Grammarly raises $90M at over $1B+ valuation for its AI-based grammar and writing tools". TechCrunch. Retrieved January 30, 2024.
  36. ↑ "HashiCorp scores $100M investment on $1.9 billion valuation". TechCrunch. November 1, 2018. Retrieved January 30, 2024.
  37. ↑ Amore, Samson (July 31, 2018). "LegalZoom Valued at $2 Billion Following Investment". Los Angeles Business Journal. Retrieved January 30, 2024.
  38. ↑ "Red-hot software start-up Rubrik has zoomed to a $1.3 billion valuation in two years". CNBC. April 28, 2017. Retrieved January 30, 2024.
  39. ↑ "Slack Raises $200 Million at $3.8 Billion Valuation". Fortune. April 1, 2016. Retrieved January 30, 2024.
  40. ↑ Levy, Ari (October 12, 2016). "Snap's founders and early backers stand to make billions". CNBC. Retrieved January 30, 2024.
  41. ↑ "Supercell Raises Super-Charged $130M Round Co-Led by IVP, Index". Venture Capital Journal. April 18, 2013. Retrieved January 30, 2024.
  42. ↑ "HomeAway opens door to $250 million funding round". CNET. November 11, 2008. Retrieved February 1, 2024.
  43. ↑ "After landing $50M funding round, tech-driven real estate firm looks to expand in Boston". Boston Business Journal. September 16, 2015. Retrieved February 1, 2024.
  44. ↑ Rao, Leena (March 15, 2012). "Identity Theft Protection Company LifeLock Raises $100M From Kleiner, Symantec; Acquires ID Analytics". TechCrunch. Retrieved January 30, 2024.
  45. ↑ "Marketo Secures $50M in Venture Capital Funding". FinSMEs. November 16, 2011. Retrieved January 30, 2024.
  46. ↑ "Intel, SAP among VCs investing $18.5M in MySQL". InfoWorld. February 13, 2011. Retrieved January 30, 2024.
  47. ↑ "Twitter Raises $35 Million Series C From Benchmark and IVP". Reuters. February 13, 2009. Retrieved January 30, 2024.
  48. ↑ "Tech venture capital on a roll". CNET. November 20, 1997. Retrieved February 1, 2024.
  49. ↑ Graser, Marc (July 8, 1999). "NetFlix gets $30 mil influx". Variety. Retrieved January 30, 2024.
  50. ↑ "SEC Form DEF 14A" (PDF). EDGAR. December 31, 1997. Retrieved January 30, 2024.
  51. ↑ Reisinger, Don (June 28, 2012). "Institutional Venture Partners closes $1 billion fund". CNET. Retrieved January 30, 2024.
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