Vector Capital Goes On Without Co-founder –

Vector Capital will hit the fund raising circuit early next year, but firm co-founder Val Vaden will no longer be listed as a managing partner.

Vaden, who formed Vector just two years after helping to launch Benchmark Capital, will transition into a senior advisory role. Fellow Vector co-founder Alex Slusky will become the San Francisco-based firm’s only managing partner, with Chris Nicholson being promoted from principal to partner. In addition, Rob Amen will return to his senior associate position after receiving his MBA from Wharton. Expected to retain their current positions are CFO Dewey Chambers, principal Amish Mehta and associates Sandy Scott and Sam Elder.

The personnel changes are being done in preparation for fund raising on Vector Capital III, which is expected to have a significantly higher target capitalization than its $175 million predecessor. Vector Capital II is almost fully committed, although it does hold enough dry powder for one or two more deals. Formal fund raising is expected to commence early next year, although the firm already has begun talking to existing limited partners.

“Vector Capital III will maintain the firm’s focus on late-stage and special situations investing in software and related services,” said a source close to the firm. “Vector really isn’t so much a venture capital firm as it is a technology-oriented private equity firm.”

Vaden and Slusky founded Vector as an independent entity in 1997, although its launch included the absorption of Ziff Brothers Investments, which had been in business since 1995. Vector Capital I was a $40 million fund with the Ziff family as its sole limited partner, while Vector Capital II began investing in March 1999 with money from such institutions as CalPERS, CSFB, GE Equity, J.P. Morgan, Perot Investments, MIT, The MacArthur Foundation and Vulcan Ventures. According to CalPERS, Vector Capital II had not returned any capital to LPs as of July 30, despite having called down 75% of committed capital. The fund was not in the red, however, as it featured a net IRR of 0.6 percent.

There is no word on Vaden’s future plans, and he did not reply to repeated requests for comment on this story.