New Fund and Co-Founder Role at Worldview

Worldview Technology Partners is trolling for fresh capital, and when it closes its fifth fund — which is targeted between $250 million and $300 million — the firm will look a bit different.

The biggest change? Worldview co-founder and General Partner Mike Orsak is transitioning into a ?part-time? role. In an email to PE Week, Orsak said that his title would change to ?partner.? He also wrote, ?I am not obligated to generate lots of deals going forward. Probably one deal a year [I’ll do], which is manageable.?

Orsak added that he had ?no plans to leave [Worldview] or do anything else? and that he remains ?full-time on existing funds.?

Orsak co-founded Worldview in 1996 with General Partner James Wei. The pair had previously worked as fund managers at JAFCO Ventures in Palo Alto, Calif. Altogether, Orsak has led investments at 14 startups at Worldview, seven of which have exited through acquisitions and two that have gone public. The first of those, Cosign Communications, raised $170 million from more than 20 investors over four rounds, all of which included Worldview. Cosign launched an IPO in 2000, which raised $230 million.

Orsak also led the deal for Snowball.com, which proved a flop for its VC backers. The network of Internet-related media properties raised $35 million from a dozen investors and launched a $68.8 million IPO in March 2000, but its stock dropped precipitously, falling from $15 to under 50 cents per share by the end of that year. It later changed its name and, before it was de-listed by Nasdaq, was taken private by an investor group. Now it’s out of business.

Orsak also led an investment in a company that went public while at JAFCO: MetaTools, a software development company that secured $8.4 million in venture backing and raised $43.2 million in its 1995 IPO. MetaTools used the capital to finance an acquisition spree after that, and later changed its business model and is now called MetaCreations.

His most recent exit is 4-year-old enterprise software startup Collation, which IBM acquired two weeks ago for an undisclosed amount. The company had raised about $15 million in funding over two rounds, plus an additional bridge round. Worldview co-led Collate’s Series A and B rounds with Prism Venture Partners.

Meanwhile, expect another change at Worldview. To wit, its international team – consisting of General Partner Susumu Tanaka and Partner Yasuharu Watanabe – is also scaling back slightly, as Tanaka becomes ?chairman of Japanese operations,? a role allowing him to more easily allow him to segue into retirement, according to Wei.

Worldview, which is based in Palo Alto, also has offices in Shanghai, Tokyo, and Roden, Germany.

Worldview’s other U.S.-based general partners include Colin Savage, Irwin Gross, Tim Weingarten and Peter Goettner and their roles will remain unchanged, according to Wei. The firm will also continue to employ Jim Strawbridge, general partner and COO; Partner David Suzuki; and Principal Steve Eglash, who do not hold board seats.

The changes come while Worldview is trying to wrap up its fund; it headed into the market this fall. The firm has raised four funds since 1996. Its first two were rather modest. Worldview Technology Partners I closed with $107 million, and its second fund closed in 1998 with $166 million. Then, the firm raised almost three times that amount the following year, closing fund III in 1999 with $476 million. In 2001, the firm went on to raise $1 billion for fund IV, much of which it later gave back to investors. Between 2001 and 2003, it shrank the fund to $600 million by cutting its size and reducing its management fees.

Over the firm’s nine-year history, it partners have invested in about 100 startups, 92 of which have been U.S.-based (70 in California) despite its global reach, according to Thomson Financial, publisher of PE Week.

Mostly, Worldview has invested in later stage deals. Thomson figures indicate that Worldview participated in 70 expansion stage rounds, 40 late stage rounds, and 30 early stage rounds. Forty-one of those investments remain active, 27 of its portfolio companies have been acquired, mostly for undisclosed amounts. And 13 companies have disappeared. Six have filed for bankruptcy. Another 12 have gone public.

Like many firms, Worldview hasn’t been as active since the Internet bubble. It made 46 new investments in 2000, up from 19 in 1998. This year, it has announced about 15 new investments.

Also like many firms to form in the mid to late 90s, most of the firm’s hits have come from its 90s vintage funds. They include DigitalThink, which raised more than $45 million from Worldview and a dozen venture investors over four rounds. The company’s 2000 IPO raised nearly $62 million. (Employee care outsourcer Convergys bought the company last year for $120 million in cash.) Another success story was Calico Commerce, which raised $47 million over five rounds. Worldview participated in its final round. The company went public in 1999, raising $56 million.

Another hit came via Broadcom, whose shares priced at $84 for its 1998 IPO and continued to rise after. (Worldview had a small stake in Silicon Spice, a company that Broadcom acquired with $1.2 billion in stock in 2000.)

In its earliest funds, Worldview invested roughly half of its capital into networking and telecom startups. Though its focus today is a bit broader — it focuses on communications, enterprise infrastructure software, and semiconductors — it still remains involved with some capital-intensive startups. Two such startups are optical-network equipment maker Infinera Corp., which recently closed a $13 million Series G round, bringing its total venture raised from about 18 investors to $240 million. Worldview is also an investor in Force10 Networks, which makes 10 Gigabit Ethernet switches and routers and has raised more than $300 million from eight firms. Worldview has participated in six of the company’s 10 rounds.

Dan Primack contributed reporting to this article.

Email Constance.Loizos@thomson.com