PALO ALTO, Calif. – MeriTech Capital, a new venture fund sponsored by a handful of existing technology-focused VC firms, expects a first close in mid-May and a final wrap in June, said John Walecka, the Brentwood Venture Capital general partner who represents his firm on MeriTech’s investment committee.
Launched last spring, MeriTech aims to raise $1 billion for late-stage investments in the technology portfolio companies of Accel Partners, Oak Investment Partners, Worldview Technology Partners and Brentwood (VCJ, April, page 5). Managing Directors Paul Madera and Mike Gordon (VCJ, May, page 32) oversee the vehicle.
Mr. Walecka said he expects the first close to notch at least $500 million, mostly from the backers of MeriTech’s sponsoring firms. However, at least a dozen new investors have committed to the fund, seeking to form relationships with the venture firms linked with MeriTech, Mr. Walecka said, declining to name them.
Commitments have averaged about $25 million, and the largest have reached $100 million each, he said. Big pension funds have shown the most enthusiasm about MeriTech and are “very intrigued with the idea of writing $100 million checks to back four quality venture capital firms,” Mr. Walecka said.
Accel, Brentwood, Oak and Worldview joined forces in this unique fund to secure late-stage funding for their portfolio companies without having to take time away from their earlier-stage investments. Under the arrangement, separate managers were hired whose compensation was tied to the success of the fund. This is intended to assure MeriTech’s limited partners that the fund will make independent investment decisions and not be used as a last-resort funding source for poorly performing companies already backed by the sponsoring firms.