Venture capital outfits are making cuts to deal with increasing pressure from limited partners not to squander management fees. At least two firms are letting partners go and another has retracted its offer to a would-be partner. It just so happens that all three firms are based in Boston. Maybe it’s something in the water.
Charles River Ventures has let go four partners: Greg Waldorf and Warren Weiss from its Silicon Valley office and Jonathan Guester and Joe Tibbetts from its Boston office. One source close to the firm says the move was a long time coming.
“There’s a certain amount of retrenchment going on at CRV,” he says. “They’re getting hammered by their LPs, and there’s a lot of pressure about what to do to be smarter about the business. Turning off the expansion offices just makes sense.” CRV last June closed its New York office and dismissed Dave Edwards, a principal with the firm.
CRV did not return repeated phone calls seeking comment for this story.
Tibbetts’ dismissal raises questions about the future of CRVelocity, which he was hired to run in March 2000. CRV pumped up CRVelocity as “a path-breaking venture model featuring a suite of on- and off-line services that help entrepreneurs accelerate their vision.” With the slowdown in the economy, maybe the firm figured it would be better to coast for a while. Meanwhile, Mike Ahearn, CRVelocity’s recruiting partner, and Dave Power, the incubator’s marketing and business development guru, remain on board.
Benjamin Loses Ground
Highland Capital Partners plans to ditch Internet-analyst-turned-VC Keith Benjamin. Apparently it wasn’t thrilled with his investments in the likes of TheMan.com, which Benjamin once described as a lifestyle portal for “woefully under-represented men.” When exactly Benjamin will leave and what he’ll do next has not yet been determined, a source close to the firm says.
Battery-Coleman Deal Is Off
Finally, Battery Ventures decided not to charge up Mary Coleman, who it had planned to bring on as a general partner. Battery’s relationship with Coleman dates back to 1992 when the firm invested in Silicon Valley client-server software maker Aurum Software Inc. She was the company’s chief executive and maintained control until it was sold to Baan Co. in 1997. Most recently, she was managing director of the San Francisco office of Internet Capital Group.
The news of Battery’s decision to rescind the offer came as a shock even to those inside the firm. “If you think about all of the successful entrepreneurs and people we’ve dealt with through the years, the number of those folks that have come in to talk to us about opportunities and ideas and who’s doing what to whom, it’s dozens and dozens of people,” says one source inside the firm. “It all seems a little odd to me.”
Battery declined to comment on the record about its decision not to bring Coleman on board.
Looking forward, the shake-up is likely to continue over the next several months, says one former New York VC. While GPs at most firms are likely to be spared, the lower ranks are already being thinned as partners look for ways to cut costs.
Carolina Braunschweig can be contacted at: Carolina.Braunschweig@tfn.com
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