Cooley Helps IVP Close Biggest-Ever $1B Venture Fund (Law360)

By Kaitlin Ugolik

Institutional Venture Partners announced the closing of a new $1 billion fund on Thursday, the biggest ever for the late-stage venture capital and growth equity firm, which has backed Twitter Inc., Netflix Inc. and other game-changing technology companies.

The fund, IVP's 14th since 1980 was raised with the aid of longtime fund counsel Cooley LLP and will continue investing in the firm's core areas of Internet, digital media and mobile technology. The fund was "significantly oversubscribed," the firm said in a statement, with existing investors taking the vast majority of the fund.

IVP, based in Facebook Inc.'s hometown of Menlo Park, Calif., has earned a reputation as a backer of today's technology giants. It has supported Oracle Corp.'s open-source database MySQL, cyber security management spinoff ArcSight LLC, social media marketing firm Buddy Media Inc., digital file hosting service Dropbox Inc. and social game developer Zynga Inc.

"The IVP team is unique and special — a multi-generational, deep, experienced team of experts," said Rick Hayes of Oak Hill Investment Management, one of the fund's limited partners. "They have proven to be an excellent partner-of-choice for exceptional, high-growth companies."

The massive fund raising result brings the firm's total of cumulative committed capital to $4 billion, showing the ability of a small group of venture capital investors to raise significant funds even as the broader market struggles for good returns. The firm specializes in late-stage venture investments in companies with $20 million or more in revenue, and growth equity investments in entities with $100 million or more in revenue.

With the IVP XIV fund, the firm said it plans to invest $10 million to $100 million in only up to a dozen companies each year, taking a highly selective approach to driving fund performance.

The firm is currently investing its 13th fund, a $750 million later-stage pool focused on investments in rapidly growing technology and media companies. Its most recent transaction took place in November with a $150 million co-investment in online coupon company WhaleShark Media Inc., alongside J.P. Morgan Asset Management.

The two firms said at the time that they were drawn to WhaleShark's results, noting that the company was on track to facilitate sales in excess of $1.7 billion in 2011, with more growth expected. WhaleShark founder and CEO Cotter Cunningham said the money would be spent at least in part on future acquisitions to expand the company's global footprint.

Founded in 1980, IVP has invested in over 300 companies, 90 of which have since gone public. It specializes in growth equity investments, rollups of small companies into larger operations, founder cash-outs and public-market exits. With its position in the market, IVP says it focuses on helping entrepreneurs expand rapidly, review business strategies and recruit top talent.

Cooley provided legal counsel for the fund.

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