Canaan Partners, a 25-year old VC firm based in Silicon Valley, has just announced a new $600 million fund.Partner John Balen told us the new fund — the company’s ninth — won’t change Canaan’s strategy, which is based mostly around seed and early stage investing. “If it’s working, don’t fix it,” he said.
The firm invests about two-thirds in information technology — particularly digital media and enterprise technology — and one-third in health care, and its recent exits include Associated Content, which Yahoo bought in 2010 for a rumoured price of over $100 million, and Sandforce, a provider of enterprise hardware technology, which was acquired by LSI for $370 million in October.
Canaan also has an international business, with offices in Israel and India that focus on tech companies there. Notably, Canaan was an early investor in Primesense, which provided some of the core technology for Microsoft’s Kinect, the motion-controlled game sensor for Xbox 360.
Balen said that the firm didn’t have trouble raising the new fund — it was oversubscribed — and credits a combination of a solid track record and open communication. “We’re a strong communicator with our partners. Our results through the years have been very good but we’ve also been giving visibility into how our companies are performing.”
So how does Canaan attract entrepreneurs among so many big name VCs in the valley? By proving it’s willing to stick around for the long haul: “Active Network went public last year. We were in that since 1999. We have strong staying power. We know you don’t make great companies overnight, and we have the patience.”
He also doesn’t think the Facebook IPO is necessarily going to unleash a new flood of public offerings. “Everyone’s so aware of it, ‘it’s about time’ is what people will say….There have been enough companies going public to grease the skids, underscoring that companies have been staying private for longer.”
See also: Canaan’s Maha Ibrahim On The Facebook IPO.