Institutional Venture Partners Explained

IVP
Type:Private
Founder:Reid Dennis
Location:Menlo Park, California, U.S.
Industry:Venture capital
Aum:$7.0 billion
Num Employees:~30+

Institutional Venture Partners (IVP) is a US-based venture capital investment firm focusing on fast-growing technology companies. IVP was founded in 1980, making it one of the first venture capital firms in Silicon Valley.[1]

History

Reid W. Dennis, the founder of Institutional Venture Partners, began his venture investment career in 1952.[2] Dennis was working as an analyst with the Fireman's Fund Insurance Company at the time.[3] He began by making an individual investment into Ampex, a technology company that developed audio tape products.[2] He also developed an informal network of screened individual investors (now called angel investors).[3]

In 1974, Dennis secured a $5 million commitment from American Express and formed Institutional Venture Associates.[4] The new firm then raised $19 million from six insurance companies for its first fund.[5] That figure represented nearly half of all the capital raised in the United States that year by private venture capital partnerships.[4] IVA's assets under management grew to $180 million by the end of the decade.[6]

In 1980, the two other partners in IVA left to form their own funds.[7] Dennis then changed IVA's name to Institutional Venture Partners and raised a $22 million fund.[7] Among the investments from that first IVP fund were Seagate, LSI Logic, and Stratus Technologies.[8] Another fund was raised in 1982, this time for $40 million, and more funds soon followed.[9] In 1983 Mary Jane Elmore became a general partner,[10] making her one of the first female venture capital partners in the United States.[11]

In 1988 the firm was able to raise $115 million for its fifth fund.[9] Dennis brought on a new partner, Norm Fogelsong, in 1989.[7] Four other partners would eventually join the firm as well,[7] including Ruthann Quindlen in 1994.[12] In 1999, three partners from IVP joined with three partners from Brentwood Venture Capital to form two new firms: Redpoint Ventures, which would specialize in early stage digital media and internet companies,[13] and Versant Ventures, which would focus on health science investments.[14] The split into three firms allowed IVP to continue to manage its own portfolio[15] and invest in fast-growing technology companies.[16]

By 2008, IVP had invested in around 200 companies and executed around 85 IPOs, including Seagate, TiVo, and Netflix.[17]

Dennis stepped down from his position as general partner ahead of the firm's twelfth fund in 2010, which raised $600 million.[18] Two years later, the firm raised $1 billion for its fourteenth fund.[19] This fund was the largest in IVP's history and brought the firm's total committed capital to $4 billion with a portfolio that included Buddy Media, Dropbox, and Twitter.[19] IVP's sixteenth fund raised $1.5 billion in 2017,[20] its seventeenth fund raised $1.8 billion in 2021,[21] and its eighteenth fund raised $1.6 billion in 2024.[22]

In August 2023, IVP opened its first international office in London.[23] The expansion to Europe reflected the firm's growing portfolio of European startups, including DeepL, MySQL, Supercell, UiPath, and Wise.[23]

IVP founder Reid Dennis passed away in March 2024.[24]

Operations and investments

In an interview with TechCrunch, general partner Jules Maltz said that IVP wants to focus "on the 10 to 12 fastest growing, most prominent late stage tech companies each year, and fund those businesses.”[25]

IVP opens individual venture funds and then asks for financial commitments from limited partners.[26] Limited partners in IVP's funds have historically included university endowments, public pension funds, funds of funds, and wealthy individuals.[16] Every IVP fund has different fund managers.[27]

The firm is headquartered in Menlo Park, California.[19] It also maintains offices in London and San Francisco.[28] [29]

Notable investments!Year!Companies
2020sDeepL,[30] Discord,[31] Perplexity.ai[32]
2010sAmplitude,[33] ArcSight,[34] Buddy Media,[35] Coinbase,[36] CrowdStrike,[37] Datadog,[38] Dropbox,[39] Grammarly,[40] HashiCorp,[41] LegalZoom,[42] Rubrik,[43] Slack,[44] Snap,[45] Supercell,[46] Wise[47]
2000sHomeAway,[48] Kayak,[49] LifeLock,[50] Marketo,[51] MySQL,[52] Twitter[53]
1980s–1990sJuniper Networks,[54] Netflix,[55] Polycom,[56] Seagate[57]

Notes and References

  1. News: Kleinman . Mark . August 20, 2017 . Twitter backer IVP in talks to buy stake in £1bn TransferWise . January 30, 2024 . . Sky Group . IVP was set up in 1980, making it one of the first venture firms in Silicon Valley, and it now has more than $5bn of capital committed across dozens of companies..
  2. News: Five Questions With Reid Dennis, A VC Investor Since 1952 . The Wall Street Journal . Dow Jones & Company, Inc. . June 24, 2009 . January 30, 2024 . Since Reid Dennis made his first venture-style investment in 1952 in the emerging technology of the day – the Ampex Corp. tape recorder – he has been hooked on building small start-ups into viable businesses. After putting about $20,000 into Ampex, and eventually getting about $1 million back, he co-founded Institutional Venture Partners, which today is a thriving firm with more than $2 billion in committed capital and investments in such notable companies as Netflix Inc., TiVo Inc. and Ask.com Inc..
  3. Book: Gupta, Udayan . Done Deals: Venture Capitalists Tell Their Stories . . September 1, 2000 . 0875849385 . January 31, 2024 . . 179 . Even while Dennis was employed as an analyst by the Firemen's Fund in 1952, he established an angel network among friends and colleagues, screen entrepreneurs at lunch and funding them if they fit the bill..
  4. Book: Gupta, Udayan . Done Deals: Venture Capitalists Tell Their Stories . . September 1, 2000 . 0875849385 . January 31, 2024 . . 179 . In 1974, Reid backed by a $5 million commitment from American Express, formed Institutional Venture Associates and raised $19 million from six institutions—nearly half of the capital raised in the United States that year by private venture capital partnerships! Over the life of IVA, the original $19 million grew to over $180 million. This now old-fashioned strategy made Dennis a wealthy man even before he established IVP in 1980. Among the investments in that first IVP fund were such companies as Seagate, Collagen, LSI Logic, and Stratus Computer..
  5. News: Venture veterans . August 31, 2008 . Private Equity Manager . PEI Media LTd. . Nexis . The firm's patriarch is Reid Dennis, who began investing in Silicon Valley start-ups in 1952. He founded IVP's predecessor, Institutional Venture Associates, in 1974, with backing from American Express, for whom he had previously managed mutual funds. He raised $19 million from six insurance companies for IVA's first fund. By the end of that decade IVA's assets under management had grown to $180 milllion. The firm, which focuses on internet/digital media, enterprise IT, and communications/wireless, has invested in some 200 companies, and executed around 85 IPOs over the years. Among them are Silicon Valley success stories like Seagate Technology, LSI Logic, TiVo and Netflix..
  6. News: Venture veterans . August 31, 2008 . Private Equity Manager . PEI Media LTd. . Nexis . The firm's patriarch is Reid Dennis, who began investing in Silicon Valley start-ups in 1952. He founded IVP's predecessor, Institutional Venture Associates, in 1974, with backing from American Express, for whom he had previously managed mutual funds. He raised $19 million from six insurance companies for IVA's first fund. By the end of that decade IVA's assets under management had grown to $180 milllion. The firm, which focuses on internet/digital media, enterprise IT, and communications/wireless, has invested in some 200 companies, and executed around 85 IPOs over the years. Among them are Silicon Valley success stories like Seagate Technology, LSI Logic, TiVo and Netflix..
  7. News: Harris . Jennifer . Institutional Venture veterans . September 1, 2008 . Private Funds CFO . PEI Group . January 31, 2024 . In 1980, Dennis's two partners, Burt McMurty and Burgess Jamieson, left to from their own funds, Technology Venture Investors and Sigma Partners, respectively. Dennis remained, changed the name of his firm to Institutional Venture Partners, and raised a $22 million fund. In 1989 Dennis brought on partner Norm Fogelsong, and over the next two decades four other partners — Todd Chaffee, Steve Harrick, Sandy Miller, and Dennis Phelps — joined the firm as well..
  8. News: IVP raises $300m for fund XI . December 6, 2004 . Private Equity Week . Thompson Financial . Nexis . Dennis founded IVP in 1980 and the firm now has more than $1.6 billion in capital under management. And among the investments in that first IVP fund were such companies as Seagate, Collagen, LSI Logic and Stratus Computer..
  9. Book: Wright . Mike . Robbie . Ken . Venture Capital . . March 23, 2022 . 9781351876087 . January 31, 2024 . 18 . In 1982 the IVP management company raised $40 million in a fund called IVP II. The group raised $96 million in 1985, launching IVP III, which was followed in 1988 by IVP IV, a $115 million fund..
  10. News: Russell . Melia . Cack Wilhelm's 'superpower' is her competitive drive and it's served her well her entire career. Now, she's the first woman promoted to general partner at IVP since 1983.. February 7, 2022 . January 30, 2024 . Business Insider . On Monday, IVP promoted Wilhelm to general partner after three years with the late-stage firm. She becomes the firm's second-ever female general partner following Mary Jane Elmore's promotion in 1983..
  11. News: Guthrie . Julian . How can women survive Silicon Valley and thrive? ‘Alpha Girls’ excerpt lays it all out . May 21, 2019 . January 30, 2024 . San Francisco Chronicle.
  12. News: Markoff . John . Seeking the Software Stars of the Future . April 13, 1997 . January 30, 2024 . The New York Times.
  13. News: Even for VCs, bigger is better . September 23, 1999 . Om Malik . Forbes . October 16, 2016 .
  14. News: Kleinbard . David . The Gods of capitalism . April 13, 1997 . January 30, 2024 . CNN Business.
  15. Book: Southwick, Karen . The Kingmakers: Venture Capital and the Money Behind the Net . . August 3, 2001 . 9780471395201 . 184 . IVP, which will continue to manage the existing portfolio while Redpoint focuses on new investing in Internet technology, has bequeathed the new firm its valuable facility on Sand Hill Road..
  16. News: Meikle . Brad . IVP Raises $300 Million for Fund XI . December 6, 2004 . January 30, 2024 . Buyouts Insider . PEI Group . IVP invests in expansion-stage IT companies. Its portfolio includes Cupertino, Calif.-based ArcSight, which provides enterprise security management services; IDUN Pharmaceuticals, a San Diego-based drug provider that focuses on neurological disorders; and Vonage, an Edison, N.J.-based VoIP provider..
  17. News: Harris . Jennifer . Institutional Venture veterans . September 1, 2008 . Private Funds CFO . PEI Group . January 31, 2024.
  18. News: Jacobius . Arleen . After storm, who will be left? . February 8, 2010 . January 30, 2024 . Pensions & Investments . Some firms have managed to make the transition gracefully. Reid Dennis, founder of Institutional Venture Partners, switched to strategic partner when the firm raised its last fund, $600 million IVP XII, said Todd C. Chaffee, general partner. The five general partners on the firm's 12th and latest fund had been with the firm for a decade..
  19. News: Taylor . Colleen . Institutional Venture Partners Raises $1 Billion For Fund XIV, Its Biggest Yet . June 28, 2012 . January 30, 2024 . TechCrunch..
  20. News: IVP announces $1.5 billion venture fund . Katie Roof . TechCrunch . September 26, 2017 . October 16, 2016 .
  21. News: Roof . Katie . IVP Raises $1.8 Billion Fund for Growth-Stage Startups . May 12, 2021 . January 30, 2024 . Bloomberg.
  22. News: Garfinkle . Allie . Exclusive: IVP has raised $1.6 billion, marking its 18th fund . March 19, 2024 . March 20, 2024 . Fortune.
  23. News: Martin . Iain . Why IVP Is Betting On Europe Even As Other U.S. Investors Draw Back . August 14, 2023 . January 30, 2024 . Forbes.
  24. News: Garfinkle . Allie . Exclusive: IVP has raised $1.6 billion, marking its 18th fund . March 19, 2024 . March 20, 2024 . Fortune . Last week, Dennis passed away at the age of 98..
  25. News: Taylor . Colleen . Institutional Venture Partners Raises $1 Billion For Fund XIV, Its Biggest Yet . June 28, 2012 . January 30, 2024 . TechCrunch..
  26. News: IVP announces $1.5 billion venture fund . Katie Roof . TechCrunch . September 26, 2017 . October 16, 2016 .
  27. News: Garfinkle . Allie . Exclusive: IVP has raised $1.6 billion, marking its 18th fund . March 19, 2024 . March 20, 2024 . Fortune . The firm doesn’t have a CEO or managing partner, and every fund has new owners, each time starting over—it’s a partnership, where nothing gets grandfathered in, sort of like how George Carlin used to go on tour, then generate new material, never wanting anything to get stale..
  28. News: Martin . Iain . Why IVP Is Betting On Europe Even As Other U.S. Investors Draw Back . August 14, 2023 . January 30, 2024 . Forbes.
  29. News: Institutional Venture Partners Opens SF Office . February 28, 2014 . January 30, 2024 . PitchBook.
  30. News: Shrivastava . Rashi . This German Unicorn Is Trying To Take On Google Translate And ChatGPT . August 8, 2022 . January 30, 2024 . Forbes.
  31. News: Winkler . Rolfe . Needleman . Sarah E. . Discord Valued At $1.65 Billion In New Funding Round . August 19, 2018 . January 30, 2024 . Wall Street Journal.
  32. News: Perplexity AI valued at $520 mln in funding from Bezos, Nvidia . January 4, 2024 . January 30, 2024 . Reuters.
  33. News: Amplitude Raises $30m in Series C Funding . August 10, 2017 . January 30, 2024 . FinSMEs.
  34. News: September 13, 2010 . The Daily Start-Up: Kleiner Perkins Profits Big From ArcSight Sale . The Wall Street Journal . February 1, 2024.
  35. News: October 18, 2010 . Buddy Media Raises $23 Million For Brand-Focused Facebook Page Management Platform . TechCrunch . February 1, 2024.
  36. News: Coinbase investor explains why he’s bullish on blockchain but steering clear of ICOs . January 26, 2018 . January 30, 2024 . CNBC.
  37. News: Charlie . Charlie . Cybersecurity unicorn CrowdStrike files to go public on the Nasdaq . May 15, 2019 . January 30, 2024 . ZDNET.
  38. News: Cloud firm Datadog looks to raise about $718 million in IPO . September 17, 2019 . January 30, 2024 . Reuters.
  39. News: October 18, 2011 . Dropbox Raises $250M In Funding, Boasts 45 Million Users. TechCrunch . February 1, 2024.
  40. News: Lunden . Ingrid . Grammarly raises $90M at over $1B+ valuation for its AI-based grammar and writing tools . October 10, 2019 . January 30, 2024 . TechCrunch.
  41. News: HashiCorp scores $100M investment on $1.9 billion valuation . November 1, 2018 . January 30, 2024 . TechCrunch.
  42. News: Amore . Samson . LegalZoom Valued at $2 Billion Following Investment . July 31, 2018 . January 30, 2024 . Los Angeles Business Journal.
  43. News: Red-hot software start-up Rubrik has zoomed to a $1.3 billion valuation in two years . April 28, 2017 . January 30, 2024 . CNBC.
  44. News: Slack Raises $200 Million at $3.8 Billion Valuation . April 1, 2016 . January 30, 2024 . Fortune.
  45. News: Levy . Ari . Snap’s founders and early backers stand to make billions . October 12, 2016 . January 30, 2024 . CNBC.
  46. News: Supercell Raises Super-Charged $130M Round Co-Led by IVP, Index . April 18, 2013 . January 30, 2024 . Venture Capital Journal.
  47. News: Martin . Iain . Why IVP Is Betting On Europe Even As Other U.S. Investors Draw Back . August 14, 2023 . January 30, 2024 . Forbes.
  48. News: November 11, 2008 . HomeAway opens door to $250 million funding round . CNET . February 1, 2024.
  49. News: September 16, 2015 . After landing $50M funding round, tech-driven real estate firm looks to expand in Boston. Boston Business Journal . February 1, 2024.
  50. News: Rao . Leena . Identity Theft Protection Company LifeLock Raises $100M From Kleiner, Symantec; Acquires ID Analytics . March 15, 2012 . January 30, 2024 . TechCrunch.
  51. News: Marketo Secures $50M in Venture Capital Funding . November 16, 2011 . January 30, 2024 . FinSMEs.
  52. News: Intel, SAP among VCs investing $18.5M in MySQL . February 13, 2011 . January 30, 2024 . InfoWorld.
  53. News: Twitter Raises $35 Million Series C From Benchmark and IVP . February 13, 2009 . January 30, 2024 . Reuters.
  54. News: November 20, 1997 . Tech venture capital on a roll. CNET . February 1, 2024.
  55. News: Graser . Marc . NetFlix gets $30 mil influx . July 8, 1999 . January 30, 2024 . Variety.
  56. Web site: SEC Form DEF 14A . December 31, 1997 . January 30, 2024 . EDGAR.
  57. News: Reisinger . Don . Institutional Venture Partners closes $1 billion fund . June 28, 2012 . January 30, 2024 . CNET.

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