WALTHAM, Mass. – While many of its early-stage peers have been too busy propping up their existing portfolios to raise a new fund, sources say Charles River Ventures (CRV) is in the midst of securing last-minute commitments on a new vehicle expected to top out at over $1 billion.
The size alone is staggering, especially considering that many of the Waltham, Mass.-based firm’s limited partners were told last quarter by Crosspoint Venture Partners that the early-stage market is too soft right now to support $1 billion worth of new investment. Moreover, the firm also raised its carried interest charge to 30% from 25% on the $500 million Charles River Ventures X.
With a successful final close, however, a source said that both increases could finally prove once and for all that CRV belongs among the top tier of venture capital investors.
“I wish they weren’t raising so much money and charging so much, but I’m not nearly as nervous as I would be if someone else was making the same increases,” said one returning limited partner. “They’re a bit more focused than some other firms currently looking for money, and they mostly kept their heads about them last year by sidestepping a lot of the dotcom stuff and sticking with communications and infrastructure.”
The new fund is officially being marketed with a 10-year term, although CRV is telling investors that it hopes to invest all of the new capital by the end of 2003. Of course, the firm also outlined the same time frame while raising Fund X, and then proceeded to invest almost everything within a 12-month span.
“They may invest everything right away again, but I doubt it,” said one source familiar with the new vehicle. “I think that they’re getting the money while it’s still available and then will be relatively cautious when making new investments. They don’t need to prove themselves to anybody.”
CRV declined to comment on the story, and information on a specific final closing date still seems specious at best. The fund-raising process was launched in August and an initial close was held in September with a number of existing investors.