Last week, Forbes reported that Vinod Khosla is about to announce not one, but two new funds backed by outside investors, including a $250 million vehicle for early stage investments and a $750 million fund for later stage deals.
The magazine reported that one fund has closed already and the other will be finalized soon, possibly within days.
Last fall, PE Week reported that Khosla was in talks with the California Public Employees’ Retirement System to raise up to $640 million to help finance his predilection for capital-intensive clean technologies.
In all likelihood, CalPERS remains the firm’s anchor tenant. In March, the state pension fund disclosed in an internal memo that it was committing $200 million to the Khosla Ventures Expansion Fund, concluding that the fund could be a “breakthrough” chance for CalPERS to align itself with Khosla.
“Over the last five years, KV has developed market-leading knowledge in the area of clean technology,” CalPERS stated at the time. “As a result, the current KV portfolio is well diversified across a number of sub-sectors.”
Forbes reported that Khosla is “understood to be ponying up more than $150 million for the new funds himself.” Typically, so-called emerging funds, even those of seasoned money managers, require that GPs chip in no more than 2% to 3% of their own capital in new vehicles.
Forbes’ sources also say that Khosla is offering his investors protection in the form of a so-called “conflicts committee,” which will review those deals in which Khosla is making follow-on investments in companies he has already staked with his own money and which he proves unable to line up an outside lead investor.
Khosla, the Sun Microsystems co-founder, superstar venture capitalist and, in recent years, alternative energy advocate, has been investing out of his own pocket since forming Menlo Park, Calif.-based Khosla Ventures in 2004. The firm has backed roughly 80 companies across a range of stages, most in cleantech.
Among one of the firm’s biggest bets has been the ethanol plant company