ATV revs up for new fund

Advanced Technology Ventures will raise a smaller fund when it goes to market in the coming months. The firm is finishing up investment from its $720 million, 2001 vintage fund, Advanced Technology Ventures VII, and expects to market to LPs soon for a new vehicle, General Partner Steve Bayloff told VCJ.

The firm had not yet set a target for its new fund, Bayloff said, but he suggested it would be between $300 milllion and $360 million, or between $50 million to $60 million per partner. ATV has six partners. The firm raised $400 million for its sixth fund in 2000.

The decreased fund size is in line with industry trends, Bayloff said. He added that the firm also wants to have a shorter fund cycle to help ensure new partners could come aboard or move up internally. “It’s tough to wait six to seven years to get into the carry,” Bayloff said. “It’s better for the LPs, but it’s great for the GPs.”

The firm’s recent exits include AeroVironment (Nasdaq: AVAV) which went public in a $114 million IPO in January, and Xtent (Nasdaq: XTNT), which launched a $75 million IPO in February.

ATV did not own enough shares to be listed as a principal shareholder in AeroVironment’s Jan. 22 prospectus. ATV holds 2.99 million shares, or 13.2%, of Xtent. Those shares were worth $33.8 million on April 10, based on a closing price of $11.33.

Last year, ATV portfolio company Acme Packet (Nasdaq: APKT) launched a $110 million IPO and Omneon Video Networks went into registration for its public offering. The firm also sold MicroVention, e-Security and Applications Networks during 2006.

Bayloff noted that 2002 to 2004 was a “particularly good time to be investing. It was less competitive at that time, especially in the early stages.” —Alexander Haislip