PALO ALTO, Calif. – Vanguard Venture Partners hired Daniel Eilers in early September as the firm’s fourth general partner. Vanguard made the move just in advance of the mid-September final close on its latest vehicle, the $240 million Vanguard VII LP fund.
The firm, a backer of early-stage communications equipment, Internet infrastructure and life sciences companies, needed to add another general partner in order to keep up with its growing capital under management, said General Partner Don Wood. Moreover, Jack Gill, one of the firm’s long-time general partners, will only be working part-time on the current fund, Wood added, noting this also created a need for additional manpower.
Because early-stage companies need a significant amount of hands-on help, Vanguard set out to find a new partner who possessed a significant amount of operating experience, Wood said. After interviewing hundreds of potential candidates, the firm knew it had found its man in Eilers, he added. “Dan has been a successful executive at both small and large companies. He has the hands-on skills required for helping early-stage companies,” Wood said.
Eilers, who has spent the last few years as an angel investor, decided to join Vanguard because he wanted greater access to capital and the ability to work with partners. He was also attracted to firm’s philosophy of working with developing companies. “My true passion is building teams of people and launching companies that make a difference,” Eilers said, adding, “joining Vanguard is a continuation of something I have done for a while – getting in early and building companies.”
Prior to his time as an angel investor, Eilers served as the chief executive officer of telecommunications products company CIDCO Inc. from March 1997 to 1998. During his watch, the company created 12 new products.
Starting in January 1996, Eilers was CEO-in-residence at venture capital powerhouse Kleiner Perkins Caufield & Byers, where he worked with a number of that firm’s portfolio companies.
Eilers got his start in Silicon Valley at Apple Computer Inc. in 1982 and worked in a variety of roles at the company. In 1986, he established Apple’s formal investment program, which included VC investing, joint ventures, acquisitions and commercial alliances. Eilers directed Apple’s investment program until 1991.
Wood said Eilers will be responsible for deal sourcing, deal evaluation, serving on corporate boards and building portfolio companies. Eilers said he will be focusing his efforts on Internet infrastructure, enterprise software and communications deals. Each Vanguard partner does about three new deals a year, Wood added. Vanguard refers to its investment process as “retro-VC,” because it comes from the days before super sized funds forced other VCs to ignore early-stage companies and put more capital to work in more developed companies, he said.
Vanguard began fund raising for its latest vehicle in mid-May with a $200 million target, Wood said. The fund is expected to back between 20 to 24 companies with a size range of $6 million to $12 million per company and an average size of about $9 million over the life of a deal, he noted. Approximately 50% of the fund’s capital will go toward communications equipment deals, 30% will back Internet infrastructure plays and the remaining 20% will be invested in life sciences companies, Wood said. Vanguard will invest the vehicle nationwide, he noted, adding he expects about half of the fund’s portfolio companies to come from the West Coast.
Vanguard’s previous vehicle, the $100 million Vanguard VI LP, closed in 1998 and is now completely committed to 15 companies. To date, Fund VII had backed two companies for a total of $5 million and had several additional deals in the pipeline, Wood added.