Charter Venture Capital may not be long for the world of information technology investing. Last Monday, Ravi Chiruvolu announced to friends that he has departed from the firm, leaving general partner Barr Dolan to manage the rest of the firm’s IT investments single-handedly.
Chiruvolu, 36, was a general partner of the early stage venture firm, where he focused on enterprise software, software infrastructure, e-business and wireless. He says his departure was “completely amicable.”
His bio at Charter – which is still online – says Chiruvolu is “an avid sports fan, and his life ambition is to be a scratch golfer.”
Yet Chiruvolu didn’t leave Charter to hit the links. Though he says he plans to work on his golf and his tennis games, his plans going forward are to invest in PIPE deals, in which Chiruvolu has some experience. He invested his own money in the publicly traded company Niku, which sells IT management and governance software. (Niku agreed last week to be sold for $350 million in cash to Computer Associates.)
“There’s a universe of between 100 to 200 companies out there that went public too early, were beaten down subsequently and are on the verge of getting de-listed,” Chiruvolu says. “Nine out of 10 deserve to be down, but one is a diamond in the rough. The trick is in finding them, looking at their assets, figuring out why the stock price has gotten creamed and understanding what’s required to gain new investor interest.”
Chiruvolu’s departure isn’t a complete surprise for several reasons. He joined the firm in 2000 as the firm closed Charter Ventures IV, an IT- and health-care focused fund with $127 million in commitments. While he suggests that his personal investment in Niku proved fruitful, not one of the 10 investments that he led for Charter – CoFix, Cradle Technologies, Encirq, Imperito, Quantum3D, Real Clear Technologies, Talaris, Verano, Winery Exchange and Xalted Networks – has been acquired or gone public. In fact, three of his investments – CoFix, Imperito, and Xalted Networks – have gone bust. Chiruvolu (who has regularly written columns about tech investing for Venture Capital Journal, a related publication to PE Week) says that he has resigned from his remaining board seats.
Chiruvolu would not discuss how much of Charter’s fourth fund was committed. Several calls to Dolan were not returned.
It seems obvious that the firm’s dedication to IT investing is waning. Last year, the firm raised a new fund. Unlike its past funds, however, which were earmarked for IT and health care investments – its new $57.5 million fund is focused exclusively on life sciences, and being led by Dolan and a different set of GPs. Meanwhile, the firm has yet to raise a new fund that would focus solely on IT.
Currently, the two Charter funds are managed out of the same University Avenue offices in Palo Alto, Calif., next to the late-stage venture firm Focus Ventures. Charter and Focus both count C.M. Capital Corp. as their core limited partner. C.M Capital is “a real estate and investment management firm,” according to Charter’s website.
If in fact Charter is abandoning IT, it won’t be the first VC to do so. Last year, the Sprout Group and Alta Partners, both of New York, also dropped their diversified IT/life sciences investment strategies to focus exclusively on health care investing.