Merus Capital co-founder Peter Hsing passes away

The former Microsoft executive co-founded the early-stage software firm Merus Capital in 2007. He was 51.

Peter Hsing, one of three co-founders of early-stage software investor Merus Capital, passed away on July 17 at Stanford Hospital. He was 51.

Hsing collapsed while playing tennis in Atherton three days earlier and did not recover, according to a Facebook post from his family. Merus Capital also posted a tribute on its website.

Hsing was an executive at Microsoft serving as managing director of the corporate strategy group when he partnered with Salman Ullah and Sean Dempsey to launch Merus Capital in January 2008.

The three partners had previously worked together at Microsoft in the corporate development strategy group, where Hsing oversaw the development of the company’s cloud services business, now known as Azure. Ullah and Dempsey separately left the company to join Google, where they were based when they partnered with Hsing to form Merus Capital.

In a phone call with Venture Capital Journal, Dempsey said a couple dozen former Microsoft colleagues gathered last week for a Zoom memorial to pay tribute to Hsing. He said a common theme among the group was how supportive Hsing was.

Dempsey added that many entrepreneurs have said Hsing was the first to believe in them and their start-up venture. “He was a friend and somebody I admired,” Dempsey said. “He had more energy than anyone else and he loved entrepreneurship. He loved to be there early and showed that early-stage investing is more than sitting on boards.”

Merus Capital invests in enterprise software companies across AI, mobile, cloud and commerce. Last year, Preqin named the Palo Alto firm one of the top five consistently performing venture fund managers worldwide.

The firm had raised four main funds in the last dozen years, including $63 million for its fourth early-stage vehicle in 2018, according to the Private Equity International database. The firm also raised an opportunity fund in 2014.

Dempsey said the firm is looking to wrap up its fourth fund later this year. The plan was to add personnel at the junior and senior level as the firm matured. He said those plans have been discussed for several months, but the proposed expansion has now been accelerated since Hsing’s passing. Instead of looking to 2021 or 2022, Dempsey said they intend to bring on a new partner sooner than that.

In online posts about his passing, Hsing was remembered for his kindness and selflessness (he was an organ donor) and how much he loved his two children.

Entrepreneur Aditya Rathnam, who co-founded Kamcord, a social media platform that was backed by Merus Capital and then acquired by Lyft, called Hsing “the coolest investor.” He remembers Hsing talking proudly about attending his daughter’s high school track meets.

Anita Bose, a chief growth officer at W20 Group, posted online that Hsing was the “Tiger Dad” who “loved his kids ferociously.” Bose also referenced Hsing’s posts on Twitter, where he tweeted as @shrewdinvestor and @HaikuVC, in which his comments “made the VC world more accessible to the rest of us.”

She added, “He pushed all of us to be better, to be more connected, more inquisitive, more adventurous.”

Hsing is survived by his parents (Fred and Fei), his brother (Andy), his children (Nicole and Brandon) and their mother (Debbie).

Correction: A previous version of this story misstated who attended a Zoom memorial held last week in tribute to Hsing. That Zoom meeting was attended by a group of former Microsoft colleagues only.