PALO ALTO, Calif. – Summit Accelerator Fund, created to back smaller deals than Summit Partners’s late-stage focus, officially began fund raising in late June and was expected to reach a first close by the end of July, said Kip Sheeline, who was hired earlier this year from Hambrecht & Quist to manage the vehicle (VCJ, June, page 5).
Mr. Sheeline expects the fund, targeted at $150 million, to have a second close later this summer. The vehicle will back technology and technology-services companies.
Last spring, Summit Partners General Partner Walter Kortschak estimated Summit Accelerator would make individual investments of about $2 million to $10 million. Summit Partners has increased its average deal size as its funds have grown over the years, and the firm now focuses on investments in growth-stage companies that have $10 million to $100 million in profits.
The Accelerator Fund was created to take advantage of earlier stage opportunities that could not easily be accommodated in the larger Summit funds. Summit V closed on $1.1 billion in March 1998.