VC fund briefs, week of March 10, 2008

.406 scores final close of debut fund

Boston-based .406 Ventures has closed its first fund with $167 million in commitments, nearly a year after it began seeking money.

The firm, named after Boston Red Sox slugger Ted Williams’ record setting batting average in 1941, raised about 85% of the fund from institutional investors, such as fund of funds Parish Capital. Co-founder Maria Cirino, a well-known tech entrepreneur, said the fund should last for the rest of 2008 and well into 2009.

Co-founder and Managing Director Larry Begley said that the fund size exceeded its goal of $150 million because limited partners were impressed with the operational experience and focus of Begley and co-founders Cirino and Liam Donohue. “They [the LPs] can see the value we’re adding,” Begley told Mass High Tech.

The firm invests in early stage tech companies, with a particular focus on such verticals as open-source software, tech-enabled business services and information security. Each of its nine portfolio companies is based within Massachusetts, although Cirino says the firm is willing to look elsewhere for select opportunities. For example, it’s currently considering a deal in Seattle.

Among the companies in .406 Ventures’ portfolio are security software firm Bit9 Inc., online business rating site RatePoint Inc. and corporate security software maker Memento Inc.

Athena working on sidecar

DFJ Athena has raised $280,000 of a $1 million sidecar fund, according to a regulatory filing. Athena is the Seoul, South Korea-based affiliate of the Draper Fisher Jurvetson investment network. The fund, as of May 2007, was targeted for $75 million and will be run by Athena Technology Ventures and that firm’s Managing Director, Perry Ha. Ha, a fifth degree master instructor of tae kwon do, splits his time between Silicon Valley and South Korea.

VCs have invested more than $2.3 billion in nearly 400 companies in South Korea over the last five years, according to data from Thomson Financial (publisher of PE Week). The majority of the money has come from global firms, such as The Carlyle Group, Apax Partners and 3i Group, and the venture investment arms of large companies, such as Hyundai Venture Investment Corp. and Samsung Venture Investment Corp.

The country is still a fresh environment for U.S.-based VCs. DCM has done one deal there, Storm Ventures has done two and Intel Capital has done six, according to Thomson Financial.

Accel, Venrock team with William Morris

As PE Week reported last week, Hollywood talent agency William Morris has teamed with venture firms Accel Partners and Venrock to launch a seed stage digital media fund. AT&T is serving as the primary limited partner in the fund, which will focus on Southern California startups.

The joint fund will be managed by Los Angeles-based angel investor Richard Wolpert, who previously served as president of Disney Online and chief strategy officer of RealNetworks.

In announcing the fund last week, the consortium did not disclose its size, though it is believed to be between $30 million and $50 million, which is much smaller than the $150 million to $200 million being raised for a similar digital media fund by rival talent agency CAA in partnership with Draper Fisher Jurvetson and two ex-Palomar Ventures professionals.

EDF postpones fund

EDF Ventures has postponed efforts to raise its fourth fund, according to VentureWire. The move is related to last year’s departure of Managing Director Beau Lasky, who left to join Steamboat Ventures. EDF Managing Director Mike DeVries says that the firm plans to resume the fund-raising process once it staffs up. The Ann Arbor, Mich.-based firm raised $68 million for fund III and a sidecar fund in 2004.

Walden Israel cancels fund

Walden Israel has canceled fund-raising for its fourth fund, which leaves the future of one of Israel’s oldest venture firms in doubt. The firm had been looking to raise $125 million, but Israeli news website Globes reported that it was only able to secure $35 million in commitments. It is unclear if Walden will restart the process later, or if it plans to wind down. The firm did not reply to a request for comment. The 15-year-old firm raised $90 million for its third fund, which closed in late 2001.

DAG holds another close

DAG Ventures has held another close on its third fund. The firm raised nearly $43 million from 22 investors for DAG Ventures III, , according to a regulatory filing. The San Francisco-based firm has already closed $500 million for this fund and another $436 million for DAG Ventures III-QP, according to data from Thomson Financial (publisher of PE Week).

The filing lists John Cadeddu and R. Thomas Goodrich as general partners and Public Safety Personnel Retirement System and Syracuse University as limited partners.