As it prepares for a windfall from the highly anticipated public offering of Google Inc., Kleiner Perkins Caufield & Byers has bulked up for future deals that it can only hope will be as successful.
As anticipated, the Menlo Park, Calif.-based firm held a final close in the last week of April on $400 million for its 11th fund, says John Denniston, the firm’s chief operating officer. That total amount includes a side fund, according to a source close to the firm.
PE Week was the first to report last November that KP was talking to limited partners about raising a new fund. It raised its last fund in 2000, a $471 million vehicle that invested in Google. In 1999 and 2000, KP invested about $25 million in the search engine provider, which last month filed for a $2.7 billion IPO.
KP could not comment on the impending public offering due to SEC restrictions.
KP’s previous fund was fully invested as of “a few months ago,” Denniston says. So far, the new fund has made one unannounced investment, a Series A round led by General Partner Vinod Khosla. Khosla, who will be part-time in the new fund, will sit on the stealth tech company’s board.
In addition, KP has “several other investments in the process of closing,” Denniston says. He declined to give specifics, but said they are all early-stage tech companies based in the United States. The firm expects to begin closing on these deals within the next month.
“In terms of overall market, we’re seeing an impressive number of high-quality early stage venture opportunities, and we’re hard at work with many of those entrepreneurs,” Denniston says.
PE Week was unable to learn whether public LPs were prevented from investing in the new firm. KP’s stated policy is to not comment on its limited partners.
But other firms, such as Sequoia Capital and Charles River Ventures, have kicked out or have purposely not invited public LPs into their new funds because some have disclosed their private equity performance numbers to the public. For example, the University of California (UC) was forced by a judge last year to release internal rates of return for all the private equity funds in which it is an investor. UC has been an LP with KP since at least the firm’s second fund (vintage 1979). Trey Davis, a UC spokesman, declined to comment on whether UC was allowed to invest in the latest KP fund.
Denniston says the LP base for the new fund is “largely unchanged” from prior funds.
Fund XI will be smaller than its predecessor, both in size and in number of general partners.
The six general partners in the new fund will be John Doerr, Brook Byers, Joe Lacob, Ray Lane, Ted Schlein and Russ Siegelman.
Four of the 10 men who were general partners in Fund X will go part-time with the new fund, and one, Tom Jermoluk, has moved on to another endeavor. In addition to Khosla, Kevin Compton, Will Hearst and Doug Mackenzie – who have collectively been with KP for more than 50 years – will not be managing partners (also known as general partners) in the new fund. Instead, they will be partners in the fund.
The four men will “work exclusively with the new KPCB fund on technology investing, while also planning to spend more time with family and on personal causes,” according to a statement issued by the firm in late February.
Alastair Goldfisher contributed to this story.