Tag Archive: morgenthaler

Morgenthaler Announces Closing of 9th Fund

Morgenthaler Ventures (where I am currently an EIR) announced today that they closed their ninth fund. In a normal market, this would have been business as usual and not be particularly newsworthy. However the current financial markets are anything but normal.

According to the NVCA release, the number of venture funds closed over the last quarters is:

    1Q'07           83
    2Q'07           83
    3Q'07           78
    4Q'07           85
    1Q'08           70
    2Q'08           76
    3Q'08           55

In 3Q of this year we saw a steep drop. However the impact of the current liquidity crisis and the resulting stock market decline didn’t become fully apparent until October. If I would have to bet, I would expect 4Q to look a lot worse. Venture Beat recently wrote about this and concluded that essentially what we are seeing, is a shakeout in the VC industry. While I haven’t seen numbers yet that conclusively demonstrate this, it intuitively makes sense. Firms that were burnt badly in the post-bubble of 2000-2003, now have fully invested their funds and realize that in the current financial climate they can’t raise additional capital. One would expect new entrants in the Venture Capital space to be the most vulnerable. A firm like Morgenthaler with almost 40 years of track record and an established network of LP’s is naturally in a much better position.

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EIR at Morgenthaler Ventures

A few people mentioned that they were suprised about my move to Stanford after leaving Voltage. This post should be a lot less suprising: I am joining Morgenthaler Ventures as a part-time Entrepreneur in Residence. Spending a day a week at Morgenthaler Ventures is a very synergistic combination. The exposure to bleeding edge technology in Stanford helps understanding entrepreneurial opportunities. Vice versa seeing the hard technical problems that portfolio companies face helps define meaningful new research areas. And while some of you may not have heard of them before, Morgenthaler is a great firm to work with.

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