Silicon Valley-based VC firm IVP has just raised a new $1 billion fund.That is a boatload of money. And it means that a lot more companies will have the pleasure of having IVP as an investor.
IVP is an investor in Business Insider (this publication), so we’re obviously biased. But we think it’s about time IVP started getting recognised for the positively fantastic performance the firm has delivered over the past few decades.
Unlike other top-tier Valley VC firms, which have grown so large that they now resemble huge private-equity firms–IVP has remained small. It only has 6 partners.
IVP specialises in late-stage investments in technology and media companies. The firm has invested more than $3 billion over the past 32 years.
And it has earned a staggering 42.3% annualized return.
That’s more than two-times the industry average.
It’s also about 40% more that cash, bonds, and the public stock market are earning right now.
And that explains why pension funds and other limited partners were lined up around the block to participate in IVP’s new fund.
It’s always a risk taking on a new investor, because you’re giving up some control in addition to some of your stock. You have to hope, therefore, that the potential investors who seem smart, forthright, experienced, and supportive when you are getting to know them remain smart, forthright, and supportive after they actually invest.
And IVP has.
Over the years, IVP has invested in companies like Twitter, HomeAway, Zynga, Comscore, Kayak, Buddy Media, Dropbox, Concur, and CafePress. Many of these companies have had huge “exits,” and others are preparing to.
If we didn’t know the folks at IVP well, we’d probably take this new fund as a sign that the Valley has gone insane again. We’d also surmise that the partners would quickly blow the whole thing by paying up to get into hot pre-IPO companies, the way a lot of firms have tried to do with Facebook, Zynga, Groupon, et al (a follow-the-herd strategy that has gotten some firms hosed).
We do know the folks at IVP, though. So we can confidently predict that they won’t do that.
Instead, they’ll do what they’ve done for the past 32 years:
- Remain very selective, doing only 10-12 deals a year
- Stay disciplined about the prices they pay
- Earn their way into very good deals at reasonable prices
- Help their companies succeed
We’re thrilled to see IVP get such a vote of confidence from its investor partners. And we’re happy in advance for the future entrepreneurs and companies that will benefit from IVP’s expertise.
And, yes, we also look forward to hitting IVP up for some of that $1 billion fund!