PALO ALTO, Calif./PRINCETON, N.J. – Accel Partners began raising Accel VII in June and is seeking $350 million from financial investors as well as $150 million from entrepreneurs and strategic corporate investors, said Managing Partner Jim Breyer.
The information technology and communications-focused fund in late June had more than $1 billion in hard commitments, and all existing limited partners said they wanted to increase their participation in the new vehicle, Mr. Breyer said.
Enthusiasm did not appear to wane for the new vehicle in light of the firm’s decision to raise its carried interest to 30% from 25%. The increase was reasonable, Mr. Breyer explained, because the firm had generated triple digit returns for limited partners in the last six years and has added several new members to its IT team, including Mitch Kapor, Bud Colligan and Bruce Golden.
Following an ongoing industry trend, Accel has decreased its health-care investing in recent years. The firm, however, will still consider health-care IT deals despite the departure of its last health-care-oriented partner Gene Hill earlier this year (VCJ, February, page 5) to join Schroder Ventures.
Accel plans to continue adding experienced staffers and to intensify its early-stage incubation/entrepreneur-in residence program, Mr. Breyer noted.
Accel VI closed on $275 million in early 1998. Investors in that fund included: Nassau Capital (the Princeton University endowment), Horsley Bridge Partners, HarbourVest Partners, J.P. Morgan, Sloan Kettering Memorial Cancer Center and the Kresge Foundation.