MeriTech Collects $550M in First Close –

PALO ALTO, Calif.- MeriTech Capital Partners reached a $550 million first close and expects a second close on its $1 billion target this fall (VCJ, April, page 5), said Managing Director Paul Madera.

The fund had commitments close to $800 million by late June, said John Walecka, a partner at Brentwood Venture Capital, one of four venture firms sponsoring the new vehicle.

MeriTech will back late-stage companies in the portfolios of its sponsors: Brentwood, Accel Partners, Oak Investment Partners and Worldview Technology Partners.

Mr. Madera oversees the day-to-day operations of the fund, along with Managing Director Michael Gordon (VCJ, May, page 32), Vice President Rob Ward, an associate and Chief Financial Officer Steve Simonian. The team has grown since the fund was launched in the spring, with Mr. Simonian as the most recent arrival in June. Mr. Ward joined MeriTech from Nationsbanc Montgomery Securities – now Bank of America Securities – where he worked in its private equity group.

Although the team continues to raise funds part time, it has turned much of its attention to investing, Mr. Madera said. The fund had committed to four deals by press time.

The vast majority of MeriTech’s capital came from the limited partners of its four sponsors, including General Motors Investment Management Corp., HarbourVest Partners, State of Delaware, J.P. Morgan, IBM Corp., Horsley Bridge Partners and the Commonfund, Mr. Madera said.

FLAG Venture Management backed MeriTech from its most recent venture capital fund-of-funds (story page 22), said Managing Partner Peter Lawrence.

All MeriTech investors are institutional, Mr. Walecka said. A fund-of-funds manager and a pension have committed $100 million each, he said.