Maybe Jim Breyer really can see the future.
Back in January 2003, the cover of VCJ featured Breyer, managing partner of Accel Partners, posing with a crystal ball. In the accompanying Q&A, he said: “If I had to predict the ideal fund in the year 2004 for a firm like us, $400-or-so million seems to be the sweet spot.”
Sure enough, nearly two years after Breyer made that prophesy, Accel closed its ninth fund in November with $400.35 million in limited partner commitments, according to a document filed with the Securities and Exchange Commission.
A source close to the firm confirmed that the new fund features a 30% carry.
A list of LPs in the fund was unavailable, but the source said that several large institutions did not participate this time around.
Performance data for some of Accel’s funds has been made public by at least two of its previous LPs: University of California (UC) and the University of Michigan (UM). It isn’t known at this time if Accel followed the lead of Sequoia Capital and a handful of other venture funds and shut out those public LPs from investing in its new fund because of concerns over disclosure.
But data from UC and UM – current as of March 23, 2003 – shows that Accel’s fourth fund ($136 million of which was raised in 1993) posted an IRR of 79%, well above the 23% benchmark for VC funds from the same year, according to Thomson Venture Economics (publisher of VCJ). Accel’s eighth fund (about $775 million raised in 2000) had an IRR of 26.8%, slightly lower than the Thomson VE benchmark of 19.8% for VC funds from the same vintage year.
It isn’t clear if Accel will reduce the number of partners for the smaller ninth fund. One original general partner of fund VIII who won’t be in the new fund is Alan Austin. Austin resigned as GP and the firm’s COO last year to take a similar position with buyout firm Silver Lake Partners.
Accel’s website lists nine people on its U.S. investment team: Breyer, Kevin Efrusy, Peter Fenton, Theresia Gouw Ranzetta, Ping Li, Abhay Parekh, Arthur Patterson, Jim Swartz and Peter Wagner.
Asked back in January 2003 about how many deals a $400 million fund could theoretically do, Breyer said: “Historically we’ve averaged 30 to 40 deals per fund. The more recent funds will have more deals not only because the funds were larger but also because there were write-offs. For an early-stage venture capital fund of $400 million doing 40 or so deals, you’d have five to seven general partners doing one to two deals per year actively.”