Lemkin steps back at Storm Ventures

Jason Lemkin, a managing director at Storm Ventures, has stepped back from day-to-day operations, according to Ryan Floyd, a founding managing director of the Menlo Park, Calif.-based venture firm.

Lemkin, who joined Storm in 2013, “has transitioned out of an active investing role at Storm,” Floyd said in an email response. “He remains a trusted advisor to Storm.”

His departure does not trigger a key man provision in Storm’s latest fund, Floyd said. Storm closed its fifth fund on $180 million earlier this year.

It’s not clear why Lemkin has left. He didn’t return a LinkedIn connection request. Lemkin recently removed any mention of Storm Ventures from his LinkedIn profile, which says he has been a “partner, Founder-VC” from September 2013 to present. The profile also says in 2016 (and beyond) he will do four to five larger VC investments and four to five smaller angel investments per year.

Floyd said Lemkin is focusing on “his SaaStr.com community and related efforts.”

Prior to joining Storm Ventures, Lemkin founded two startups that were acquired. He co-founded EchoSign Inc, an on-demand sales tool. Adobeacquired EchoSign, which was backed by Storm and others, including Lemkin, in 2011. He then worked for Adobe for about a year, according to his profile.

Lemkin also co-founded NanoGram Devices Corp, which used nanotechnology to enhance the performance of medical devices, his profile said.

He lists himself as “Trusted Advisor” of SaaStr, a social community of more than 10,000 SaaS founders and executives, where he regularly pens commentary.

The managing directors of Storm’s fifth fund were listed as Tae Hea Nahm, Lemkin and Floyd, according to investment documents from the Los Angeles County Employees’ Retirement Association from February. LACERA approved a commitment of up to $50 million to Storm Ventures Fund V earlier this year.

As VCJ previously reported, Storm co-founders Sanjay Subhedar and Alex Mendez are not part of the fifth fund. Floyd, Nahm and Subhedar and Mendez worked together at Wide Area Network startup Stratacom before co-founding Storm Ventures in 2000.

Prior to the firm’s official launch, the team invested $7 million, without any third party capital, through Storm Ventures I, a 1997-vintage fund that netted a 58.3 percent IRR, according to LACERA documents.

Performance softened with Funds II, III and IV. Storm Ventures raised its second fund, in 2000, a difficult year for venture capital. Despite netting just 2.8 percent as of Sept. 30, the fund managed to crack Cambridge Associates’ second quartile, according to LACERA. Funds III and IV netted 14.3 percent and 15.4 percent, respectively.

The addition of Lemkin increased Storm’s proprietary deal flow, especially through his SaaStr.com blog, which had more than 750,000 page views a month, LACERA said in the documents. “Four recent Storm investments were all exclusively sourced by Jason Lemkin through SaaStr,” the documents said.

However, the pension system’s investment staff also noted Lemkin posed a risk as a new member of the executive team. His “continued integration with the current Storm team and transition to an investment role are critical,” the documents said.

His departure is made more significant because Storm increased its fund size with Fund V from the prior vehicle, which was $96 million. With the new fund, each managing director would represent about $50 million to $60 million in investments across eight to 10 portfolio companies, the LACERA documents said.

Performance information on Storm’s prior funds could not be found.