3 Degrees of XenSource

You wouldn’t think that I could – or would even want to – write more about Citrix’s $500 million acquisition of XenSource, but it turns out I neglected two interesting nuggets yesterday. So here they are:

*** As we discussed yesterday, XenSource was originally seeded by Sevin Rosen Funds, Kleiner Perkins and Kleiner Perkins partner Kevin Compton (via his Radar Partners vehicle). Guess what other company Sevin Rosen and Kleiner seeded? Yup, Citrix.

That was back in 1989, with Sevin Rosen’s Steve Dow and Kleiner’s Compton taking board seats. Citrix went public in 1996, but Dow remains on the board. A regulatory filing says that Dow “not attend the meeting at which the Citrix Board approved the transaction, and recused himself from the vote to approve the transaction.” The filing added that Dow is expected to personally receive $1.9 million from the sale, via his allocated GP carry. It makes no mention of Compton, whose Kleiner bio still lists him as a Citrix board member. A Citrix spokesman could not recall how long ago Compton stepped down, but did confirm that he’s no longer on the board.

*** There was also another firm in that first round for Citrix: Mayfield.

Mayfield did not subsequently invest in XenSource, but it had the opportunity to do so. It passed up the Series A, despite some lobbying by Peter Levine, who was with Mayfield at the time. Levine later left Mayfield and began raising a $200 million VC fund with the late Todd Brooks. The fund received good LP feedback, and was nearly closed by early 2006. Then Levine stunned the market – not to mention Brooks – by pulling out to become CEO of… XenSource.

At the time, Levine said that he wrestled with the decision, but that XenSource represented the “opportunity of a lifetime.” I’d heard that line too often to pay it much heed, but apparently he knew of what he spoke. Levine will stick with Citrix, in charge of a new virtualization and management division that will include XenSource.