Add two more names to the growing list of veteran VCs who are striving to launch their own firms.
Former Mayfield general partners Todd Brooks and Peter Levine are in the midst of raising $200 million for their inaugural fund, according to several sources.
Levine would not confirm the un-named fund’s target or whether the duo had locked in any limited partners. He did say that if he and Brooks successfully raise a fund, then they would set up their digs somewhere in the Bay Area.
“I’m having more fun than I ever have right now; we’re really excited,” says Levine, who would not provide any details. “But we don’t want to jinx anything by talking about it.”
If they succeed, the pair will join Emergence Capital, Shasta Ventures Spark Capital and Vallhalla Partners, among others, as new VC outfits to have sewn up financing. In the past four years, roughly 30% of U.S. funds that have come to market have been first-time funds, according to Thomson Venture Economics (publisher of PE Week).
Mayfield hired Brooks in 1999 from JAFCO America Ventures, a subsidiary of Japan’s largest venture firm, where he led the telecommunications practice as managing principal. He left Mayfield in late 2003, presumably in part because telecom investing had grown difficult during that period, though Brooks himself says that “I didn’t leave Mayfield because the telecom industry tanked. I decided to leave Mayfield because of differences in investment philosophy and over the direction of the firm.” Brooks says that he “also wanted to explore other fund opportunities including putting my own firm together.”
While at Mayfield and JAFCO, Brooks led investments in 25 companies and has enjoyed a number of big hits. His investments include fiber optics component maker Avanex, which completed a $216 million IPO in 2000 after raising $30.3 million from Mayfield, JAFCO, Crosspoint Venture Partners, Sequoia Capital and U.S. Information Technologies. (Brooks led investments in Avanex first for JAFCO and later for Mayfield, and he remains on its board.)
At JAFCO, Brooks also got behind gigabit networking and switching equipment maker Brocade Communications, which completed a $61.75 million IPO in 1999 after raising $37 million from JAFCO, Crosspoint, Bay Partners, Mohr Davidow Ventures and several others. (Brocade’s shares, now trading at about $4, hit a high of $150 per share in the months following its IPO.)
Brooks says that “I returned nearly $2 billion to LPs on about $200 million invested,” quickly adding, “that number is realized gains, not actual returns to LPs. [JAFCO and Mayfield] naturally took a cut.”
Levine, who joined Mayfield in 2002 as a venture partner and became a general partner in 2003, led seven investments for the firm, and remains on the boards of three of those companies: Mendocino Software, which is focused on the recovery of enterprise application environments and that Levine helped to incubate at Mayfield; software startup Centrify; and Zenprise, an enterprise software company focused on infrastructure management.
Mendocino has raised $33 million in two rounds since January 2004 from Mayfield, Foundation Capital, Accel Partners and Advent International. Centrify has raised $21 million in two rounds since June 2004 from Mayfield, Accel and Invesco Private Capital. Zenprise has raised $17 million over two rounds since January 2004 from Mayfield, Bay Partners and Shasta Ventures.
Two of Levine’s companies have been acquired: Consera Software, which raised just over $10 million over two years, sold to Hewlett-Packard in February 2004. Data management startup Actona Technologies raised $25 million in five rounds before Cisco Systems acquired it for $84 million in cash. (Mayfield led the fifth and only round in which the firm participated.)
In April, Levine left Mayfield, which wrapped up its 12th fund at the end of August, closing it with $375 million.
Brooks and Levine crossed paths at Mayfield for just one year, but are evidently the right fit. Levine points out that Brooks has a background in hardware systems and investing, having served early in his career as an equity research analyst for Franklin-Templeton Funds. Levine, meanwhile, has an operating and software background, having spent 11 years at Veritas before joining Mayfield.
“I think Todd was trying to find the right people to work with,” Levine says. “People and chemistry and the background of the individuals [who come together to raise a new fund] makes an enormous impact on the shape of a firm.”
He adds, “It’s not often where stars align in such a way where you can assemble the right team.”