Bessemer Venture’s Fuzzy Math

Bessemer Venture Partners this morning announced “the closing of a $350 million supplement to its current fund.” But that’s not really true. At least not in the traditional sense.

The fund in question is Bessemer Venture Partners VII, which closed in June 2007 with approximately $1.1 billion in capital commitments. It was the first BVP fund open to institutions other than family office Bessemer Securities, although BS still took a very large stake. Too large a stake, perhaps, as the new “supplement” is mostly a transfer of unfunded capital from Bessemer Securities to other limited partners.

Specifically, Bessemer Securities unloaded $250 million of its commitment to the fund (it still retains a sizable position). The other $100 million is, indeed, new capital — bringing the fund total up to $1.2 billion.

A BVP spokesperson declined to comment on the above information, but BVP limited partners tell us that the Trust sale is not a vote of no confidence. Instead, it’s simply a reflection of macro liquidity issues that are running rampant through the LP market.

“This is an excellent group, good people who don’t drink their own bathwater,” one investor said.

As a side issue, $1.2 billion is an extraordinary amount of cash for a VC firm to be sitting on. The explanation I hear is that BVP does all of its deals — early-stage, growth, India, etc. — out of a single pot, as opposed to the multiple-fund strategy employed by firms like Sequoia Capital and Kleiner Perkins.

Again, I’m not hearing that from the firm, because they really don’t seem interested in discussing any of this. Almost makes me wonder why they issued a press release in the first place.