Allen Morgan and David Ladd will reportedly scale back their investments duties at Mayfield Fund and become venture partners as the Menlo Park, Calif.-based firm is set to raise its 13th fund.
Mayfield representatives did not respond to requests for comment. VentureWire reported on Tuesday that Managing Directors Morgan and Ladd are will become venture partners in the firm’s new fund. VentureWire cited prospective LP sources, who also said that Mayfield is aiming to raise $325 million for the new fund.
Its 12th fund closed in the fall of 2005 with $375 million in commitment, without at least seven brand-name limited partners. They didn’t return as investors because of low returns from the fund’s prior two funds, and disagreements over the handling of management fees, as PE Week reported at the time.
Morgan and Ladd each joined Mayfield in 1999. As the pair become venture partners, the firm now has six managing directors, according to its website: James Beck, Navin Chaddha, Yogen Dalal, Raj Kapoor, Janice Roberts and Robin Vasan.
Meanwhile, PE Week has learned that Morgan has moved on to making individual investments, including in San Francisco-based Lookery, an angel-backed startup that places ads on such social applications as Bebo and Facebook. Lookery founder Scott Rafer last week said that “a tighter relationship” with Morgan will be announced soon.
The reported change in the partnership ranks comes as one of the firm’s highest-profile investor, Kevin Fong, left in January “to pursue other interests.” Fong, who led Mayfield’s China-based strategy and served as a liaison to Chinese affiliate GSR Ventures, is currently listed as a managing director on the GSR website.
Last year, Mayfield also lost Principal Chamath Palihapitiya, who joined Facebook one year after the firm hired him from AOL.
Mayfield was a high-flier during the late ‘90s tech boom, investing in BroadVision, Tibco Software and Redback Networks, which all launched successful IPOs. The firm’s reputation and returns were tarnished when the tech bubble collapsed, though, and Morgan’s dot-com investments were among the hardest hit.
“When you’re the new guy, it’s bad when two of your first five deals go out of business,” Morgan told Wired magazine in 2006.
Morgan’s record since has seemed to improve, though the hits have been small in scale. He led Mayfield’s investment in the social media company Pluck, which raised $17 million altogether before selling to website aggregator Demand Media for $75 million in March.
He led Mayfield’s investments in the free wiki hosting service Jotspot, which raised one round of funding in 2004 for $5.2 million from Mayfield and Redpoint Ventures before it sold to Google in 2006 for an undisclosed amount.
Morgan also backed video presentation software company SeriousMagic with an undisclosed amount from Mayfield. It was acquired by Adobe Systems in 2006 for an undisclosed amount.
Mayfield’s investment in startup photo service provider Slide was also directed by Morgan.
Similar to all venture firms, Mayfield, which has been investing for nearly 40 years, continues to enjoy hits and misses.
One of its biggest misses in recent years has been movie service MovieBeam. After original owner The Walt Disney Co. lost $56 million on the company, Mayfield and several other investors put more than $48 million into the company. Less than a year later, it sold to a movie rental company for $10 million.
Yet Mayfield also looks to have a hit on its hands with Aliph, maker of Jawbone, the popular Bluetooth headset. Mayfield joined the company’s second round of funding in 2003, and has participated in each of the three rounds since. Aliph has raised about $42.5 million to date from Mayfield, Sequoia Capital, Khosla Ventures and others.