Sierra Ventures co-founder Jeffrey Drazan says he is set to begin raising the first fund for his new firm, Bertram Ventures.
In doing so, Drazan stresses that he remains actively engaged in current Sierra portfolio investments and that he remains on the board of six companies for the firm. He also says that he will continue to be involved in the remaining investments to be made from Sierra VIII, a $500 million vehicle raised in 2000 and which is all but 20% invested.
Drazan plans to start marketing his new fund, which he’s named Bertram, after the Sierra VIII fund is fully invested. This should occur in late 2005, and his goal is to have the new firm and fund up and running by mid-2006, but it could happen sooner.
Drazan says that Bertram will focus on growth and buyouts, investing in companies with $25 million to $100 million in revenue. Drazan says that Bertram – named after Drazan’s dad – will focus on two sectors: health care and another sector that he won’t identify yet, but will be IT-based.
Bertram’s first fund is planned for $250 million and Drazan says he envisions an average investment per firm of $20 million or “whatever it takes to buy controlling interest.”
Drazan has been a fixture on the VC scene since joining Sierra shortly after it’s founding by Peter Wendell. The first fund that Wendell and Drazan co-raised was a $50 million vehicle called Sierra III in 1987.
Drazan’s investments at Sierra have included Centex Telemanagement, StrataCom, Active Software, ConvergeNET and Quinta. By his estimate, Drazan says that he’s contributed $750 million of the firms realized investments with another $250 million to come. But he says that the more relevant statistic for his 21 years of investing is a 59% compounded IRR for his cumulative portfolio companies at Sierra.
Drazan says he plans to set up Bertram in Menlo Park, Calif., in the same building and across the hall from where Sierra is based on Sand Hill Road.