Canaan Expands GP Roster

Early stage tech investor Canaan Partners has closed Fund VII with $450 million in limited partners commitments and named Brent Ahrens and Maha Ibrahim general partners. They join John Balen, James Furnivall, Deepak Kamra, Gregory Kopkinsky, Seth Rudnick, Guy Russo and Eric Young as GPs in Fund VII

In addition to increasing it management team, Canaan Partners also has a larger base of LPs, as the 18-year-old firm made an effort to bring in more institutional investors into the fold.

“They’ve really gone to a fully institutional investor base with this fund,” says David Braman, a senior partner with Pantheon Ventures, one of the firm’s new LPs. Another new limited in Canaan VII includes Abbot Capital. While the firm had a base of institutional investors prior to its new fund, such as General Motors, Canaan’s LPs were initially individual investors outside the United States.

The Menlo Park, Calif.-based firm began raising the new fund in January and was $100 million oversubscribed. The firm’s previous fund, Canaan Equity III, raised $700 million in 2001.

New GP Ahrens, who came to the firm in 1999 through a Kauffman Fellowship, formerly served with a Johnson & Johnson subsidiary in a variety of positions. At Canaan, two of his investments have seen exits recently. DexCom, a San Diego-based medical product developer, launched a $56 million IPO in April. Also in April, Peninsula Pharmaceuticals agreed to be purchased by Johnson & Johnson for $245 million.

Ibrahim joined Canaan Partners in 2000 and was formerly a vice president of business development with Qwest and a management consultant with Boston Consulting Group and Price Waterhouse. She sits on the boards of directors of four Canaan Partners portfolio companies, including Habeus, a Mountain View, Calif.-based business email service provider; and South Plainfield, N.J.-based WAN-based storage consolidation service provider Tacit Networks.

Canaan Partners invests in early stage companies in IT and life sciences. GPs Balen and Rudnick said that the new fund’s fee and carry terms are consistent with past funds and “very much middle of the road.” They credit the firm’s consistency in investment and their practice of promoting from within to help generate LP interest. The partners expect to see more investment activity in IT security and medical diagnostics, among other segments.

The firm expects Canaan Equity III it to be fully invested and to begin investing Canaan VII by the third quarter of this year.