Darwin Ventures seeks to grow with $100M fund

Frank Caufield Jr., son of Kleiner Perkins Caufield & Byers co-founder Frank Caufield Sr., is raising $100 million for the second venture capital fund of funds of his 6-year-old firm, Darwin Ventures.

Managing Partner Peter Freudenthal confirmed that $100 million was “in the ballpark” of Darwin’s target, and that the firm has already raised nearly $60 million, the amount that Darwin had initially set when it began fund-raising last year.

Freudenthal referred to regulatory restrictions and said that he wasn’t at liberty to disclose details about the fund. But he acknowledged that the firm is actively investing its second fund. He declined to name the firms that have so far received commitments, saying only that they are “early stage tech, health care and hybrid funds.”

In regards to limited partners, Freudenthal said that they were “all endowments and foundations, and a couple of key, star individuals.”

San Francisco-based Darwin raised $42 million for its initial VC fund of funds in 2004. Among its investments, Darwin committed to funds raised by Kleiner Perkins, Accel Partners, Lightspeed Venture Partners, New Enterprise Associates, Sierra Ventures, U.S. Venture Partners, Highway 12 Ventures in Boise, Idaho, and Inventus Capital Partners, the new U.S.-based, India-focused fund of Kanwal Rekhi, a longtime angel who founded successful networking company Excelan in the early 1980s.

Freudenthal’s first venture capital gig was as CEO and co-founder of meVC, a closed-end public venture capital fund meant to democratize the process of investing in startups. Prior to meVC, he was a biotech analyst at the investment banks Robertson Stephens in San Francisco and Brean Murray & Co. in New York.

Caufield Jr. founded Cerisent Corp., an XML content server startup, and worked for Xerox Venture Lab “where he was in charge of creating value out of Xerox PARC technologies,” according to Darwin’s website.

Darwin is the latest in a string of firms to benefit from having close ties to venture funds that many LPs are clamoring to access.

San Francisco-based DAG Ventures predominately co-invests with Kleiner Perkins, Accel Partners, Khosla Ventures, Benchmark Capital and Sequoia Capital, according to Thomson Reuters (publisher of PE Week). DAG is raising $600 million for its fourth fund, according to several sources familiar with the firm, which raised a $500 million fund last year, as PE Week reported last week.

Meanwhile, Chicago-based broker dealer Advanced Equities Financial is on track this year to invest $1 billion from accredited investors in startups that have, for the most part, already been backed by so-called top-tier firms. Advanced Equities Financial, founded in 1999, has invested behind New Enterprise Associates in 10 companies, according to Thomson Reuters.

Advanced Equities has also invested behind Kleiner Perkins in seven companies, including 5-year-old storage company Agami Systems, for which Advanced Equities Financial led a number of financings, including a $45 million round in February of this year. Agami just went out of business. DAG Ventures is also among Advanced Equities Financial’s top co-investors. The two firms have backed four of the same companies thus far.