Sequoia Capital is raising about $450 million for its 12th early stage fund, according to limited partners familiar with the situation.
The LP sources also say that it appears Sequoia will not accept most funds-of-funds in the new vehicle.
Word is Sequoia is unhappy about some FoFs, who are using the Sequoia brand to market their own funds to investors and, in essence, making Sequoia compete with itself.
FoFs that are currently Sequoia LPs, but are unlikely to be invited into fund XII, include Champion Ventures, Flag Venture Partners and HarbourVest Partners, the LPs say. Sequoia may invite select FoFs, such as Northgate Capital Group, where former pro football player Tommy Vardell is a managing member, according to the LPs.
LPs say they also expect Sequoia to maintain its ban on so-called public limited partners, such as the University of California, due to disclosure concerns.
Michael Moritz, a partner at the Menlo Park, Calif.-based firm, declined to comment.
The new fund just came into the market, so details from a regulatory filing are not yet available. LPs say the firm expects to hold a final close on fund XII on June 30.
Sequoia raised its last early stage fund, which totaled $395 million, in 2003. The general partners in fund XII will presumably be the same as those in fund XI.
Although the firm lists 12 partners on its website, a regulatory filing for fund XI lists five: Moritz, Michael Goguen, Mark Kvamme, Douglas Leone and Mark Stevens.
Sequoia – which was an investor in Google – has been so busy with raising new funds lately, it’s a wonder that it will have time to actually invest.
So far this year, it has raised a late-stage fund, a China-focused fund and the firm has struck an alliance to invest in India.
Earlier this month, Sequoia closed on $861.5 million for Sequoia Capital Growth Fund III, according to a regulatory filing. The partners in that fund are Goguen, Kvamme, Leone, Moritz, Sameer Gandhi and James Goetz.
The late stage fund should allow Sequoia Capital’s 12th early stage fund to concentrate solely on startups. Its 11th fund did a fair number of expansion and late-stage deals, according to Thomson Financial (publisher of PE Week). Thomson’s report shows that fund XI has invested about $150 million in 20 deals to date.
About half of those were classified as “startup/seed” and “early stage” deals, while half were identified as “expansion” or “later stage” deals.
Fund XI has not yet had any exits. Among the companies backed by the fund are wireless broadband chipmaker Beceem Communications, online dating site eHarmony.com, social networking site LinkedIn, “email infrastructure” provider StrongMail Systems, and online shoe retailer Zappos.com.
In a March 8 regulatory filing, Sequoia reported that it has raised $15 million for Sequoia Capital China Partners FD I. The filing lists the partners as Goguen, Leone, Kvamme, Gandhi, Goetz, Leone, Moritz, Nan Peng Shen (apparently Neil Shen), and Fan Zhang.
Earlier this month, Sequoia partnered with Westbridge Capital Partners to invest in India. The terms of the partnership have not been disclosed, and there has been no regulatory filing associated with the India fund.
Additional reporting by Lawrence Aragon.