If a sports team begins the season with two key players out of the lineup, the fans worry. Vanguard Ventures is on the market raising its eighth fund without firm stalwarts Jack Gill and Bob Ulrich, but the firm hopes to broaden its LP base and score big with institutional investors.
The GPs are moving towards retirement and will not be partners in Vanguard VIII, which is targeted at $150 million. Gill and Ulrich will remain with the Palo Alto, Calif.-based firm to manage investments from previous funds.
Meanwhile, Vanguard is trying to change its limited partner base by adding a larger roster of institutional investors. Individual investors constituted about 40% of its previous fund, according to Thomson Venture Economics (publisher of PE Week). The firm’s LPs in past funds include Bell Canada, JAFCO America Ventures, Johnson & Johnson, the Massachusetts Bay Transportation Authority Retirement Fund, Minnesota Mutual Life Insurance and Synergy Partners.
The firm hopes to have a first close on fund VIII by the fall.
Two-thirds of the new fund will be dedicated to IT and one-third will be invested in medical technology. Its IT investments will focus largely on the sector known as “personal technology” companies that sell products and technology to individuals. Its medical investments will focus on therapeutic medical devices.
Fund VIII will be marketed by three general partners: Thomas McConnell, Daniel Eilers and Donald Wood. McConnell – who focuses on medical technology – has been at the firm for a year. Eilers joined in 2000, shortly before the close of Vanguard VII, a $240 million fund. Wood has been there since 1998. Eilers and Wood will invest in IT.
It’s a new team, but it’s not stocked with rookies. McConnell is a 20-year VC veteran, with most of that time spent at New Enterprise Associates.
Eilers was an angel investor before joining Vanguard and has previously served as a CEO-in-residence at Kleiner Perkins Caufield & Byers. Eilers also headed up Apple Computer’s strategic investing group and was president and CEO of telecom product provider CIDCO.
Wood previously served as president of wireless data technology provider Metricom and has also served as an executive with Octel Communications.