MENLO PARK, Calif. – In response to the stiff competition for deal flow on Sand Hill Road, August Capital closed its $195 million August II fund more than six months before the firm intended to begin investing.
“We began fund raising last April and were done by the end of June,” said Andy Rappaport, a general partner at August. “We raised this size fund, in this manner, because of the number of [investment] opportunities.”
In fact, the firm continued investing its $100 million Fund I through the fall and did not make its first draw on capital from Fund II until December.
With the increased capital, the firm intends to remain focused on information technology investments that will run the gamut from early-stage deals to selected buyout opportunities. “We invest in intellectual assets, and, while there are situations where spinouts occur, we are not a buyout fund, so we will be highly selective,” Mr. Rappaport said.
Mr. Rappaport would not identify limited partners in Fund II but did say the fund drew a number of traditional venture investors, state and corporate pension funds especially, that joined its L.P. base from Fund I, which primarily comprised high-net-worth individuals and family foundations. The minimum investment for Fund II was $5 million.
Since December, the firm has participated in five transactions including $7 million in BroadLogic Inc.’s spinout from Adaptec, $9 million in ImproveNet Inc.’s $23 million third round and seed financings in three early-stage companies – TSpan, Intrinsic and Entity Systems.
Additionally, August Capital added Andrew Anker as its sixth partner in April. Mr. Rappaport said Mr. Anker joined the firm a year ago as an associate focusing on Internet-related investments. Prior to joining August, Mr. Anker was co-founder and chief executive of Wired Digital, the parent company of HotBot, Wired News and HotWired.