True Ventures has closed its inaugural fund with $155 million, after having launched earlier this year with a $125 million target. Limited partners include Paul Capital Partners and Park Street Capital.
True is part of a burgeoning class of first-time fund managers focused on the early stage capital gap left by older firms that have moved downstream. It ideally wants to be a young company’s first money, with initial investments of between $500,000 and $3 million.
“We want to do what entrepreneurs want to do, which is to build companies,” says Jon Callaghan, one of True Ventures’ three co-founding partners. “There are a lot of great ideas out there, but many of them don’t need the $10 or $15 million that certain firms need to put to work.”
The firm made four investments with partner money before holding a first close, and has since rolled those deals into the fund portfolio. They are: Automattic (blogging software), Meebo (instant messaging), ScanR (capture digital info via camera phone) and Sphere (blog search engine). True also has added four portfolio companies following its initial fund close, including GigaOm (online tech content) and SendMe (mobile entertainment). Details of the other two deals are undisclosed.
Callaghan (who once worked in a bike shop) says that the firm’s name partially refers to traditional VC investing, but also to a term used for perfectly aligning a bicycle or automobile tire. The idea is that the partnership will work collaboratively with entrepreneurs, and will provide a vast network of contacts. “It’s very difficult to [true a tire], but it results in an incredibly smooth ride,” he says.
Callaghan most recently was a partner with Globespan Capital Partners, and previously spent time with CMGI @Ventures and Summit Partners. It was at Summit that he met Phil Black, who later joined ABS Ventures. Black, in turn, met John Burke at ABS, and the pair would team up to form a small firm called Blacksmith Capital.
The trio now represent True’s general partnership, and is buttressed by VP of finance Braughm Ricke (who was with 5AM Ventures and Artiman Ventures) and venture partner Toni Schneider (current Automattic CEO). Burke will remain in Washington DC, while his partners will be based in San Francisco. The firm believes that early stage VCs should be in close proximity to their companies, but could be open to certain opportunities outside of the Silicon Valley or Beltway areas. —Dan Primack