When Enterprise Partners Venture Capital?s Bill Stensrud came to New York in April to officially accept his appointment to the National Venture Capital Association?s board of directors, he certainly didn?t anticipate kicking off marketing efforts for the firm?s latest fund a month early.
However, with more than a handful of New York investors waiting in the wings to pump money into the new vehicle, that?s exactly what happened.
As such, La Jolla, Calif.-based Enterprise is expected to announce today that it has officially closed its sixth fund with $350 million in commitments. Originally targeted at $310 million, Enterprise VI was quite a bit oversubscribed.
What is more, there were some investors who didn?t make the cut this time because the firm promised its limited partners that it wouldn?t exceed $350 million, said Andy Chedrick, who holds the dual roles of chief financial and chief operating officer at Enterprise.
A bevy of the firm?s previous LPs re-upped in Enterprise VI, including Yale University, Columbia University, Princeton University, The Common Fund, General Motors Corp., IBM Corp., The Ford Foundation, Horsley Bridge Partners, Pantheon Ventures, Harbourvest and JP Morgan Partners. Previous backers Colorado PERA, Knightsbridge and Adams Street Partners also re-upped.
Like its five predecessors, the new Enterprise fund will invest mostly in seed- and first-round deals in the telecommunications equipment, technology-based life science and enterprise software spaces. It differs from some of the firm?s previous vehicles, however, in that it will not invest in Internet infrastructure businesses or health-care services.
“We did about 10% to 15% of Internet infrastructure in Enterprise V and, although we?ve done health-care services deals in the past, we?ll no longer invest in those because, while there are a lot of great ideas, there aren?t a lot that can make money,” Chedrick explained. “Five to seven years ago, health-care services had a nice profit market if it had the right business, but that?s not true anymore.”
Enterprise will likely invest between $10 million and $20 million in 20 to 25 portfolio companies over the life of the three-year fund. Its five previous vehicles are all fully committed except Enterprise V, which may take on a few more companies, Chedrick said.
No Frequent Flyer Miles
When asked about the firm?s geographic sweet spot, he said, “We drew a circle around Southern California? and we?re definitely going to invest within an hour plane ride of [that], which takes us into Silicon Valley and Arizona. We will go as far as a two-hour plane ride.”
While Enterprise doesn?t typically invest beyond that sphere, it may consider deals outside of its traditional stomping grounds if they are too good to pass up or happen to be a glove-tight fit with the investor?s other portfolio companies, he added.
Enterprise VI will be managed by Stensrud and Enterprise GPs Drew Senyei, M.D., Thomas Clancy and Naser Partovi. Additionally, Enterprise plans to opportunistically hire one additional partner down the road, Chedrick said.
Originally based in San Diego, the firm recently moved its headquarters to La Jolla, Calif. Founded in 1985, it now has more than $1 billion under management.
You can contact Robyn Kurdek at Robyn.Kurdek@tfn.com