Funding With Enterprise Partners
May 6, 2003
By Jenny Reisinger
Courtesy of Dow Jones Newswires
Who: Enterprise Partners Venture Capital
Where: La Jolla, Calif.
Established: 1985
Number of Employees: 20
Web Site: www.epvc.com
Money Under Management: $1.1 billion, $300 million of which is not invested
Managing Directors: 6
Investment Focus: Networking, enterprise software, semiconductors, life sciences
Firm's Investments: Ophthonix develops a programmable "super lens" capable of 20/10 vision; Sanera (www.sanera.net) builds scalable storage switches; GoBeam (www.gobeam.com) provides integrated voice and data services; SupplySolutions (www.supplysolution.com) provides inventory-management software.
For a complete list of investments, see the firm's Portfolio Companies.
What the Company Looks For: Enterprise Partners Venture Capital is an early stage funder that often takes the lead in early rounds. "We usually take a big stake in the company, and usually take a board position," says Managing Director Naser Partovi. The firm tends to work outside of the board room, spending time on business plans and strategy with companies. The firm also takes in to account the company's potential profit, and expects most company exits around $100 million to $200 million in market value.
Enterprise Partners Venture Capital also has working relationships with six universities to aid in research and development of products it may one day invest in. "We often see some of the technologies coming earlier from universities than from entrepreneurs," says Mr. Partovi. This gives the firm a jump on new technologies that have the potential to be profitable in the future. It deals mainly with the technological side of development at universities, but also has recently started working with business schools concerning the venture-capital side of investing.
Recent Performance: The company has seen several recent successes. Accredited Home Lending (www.accredhome.com) went public early in 2003 and is the only venture-backed IPO to make it to the market this year. The company is a mortgage banking institution. Discovery Partners (www.discoverypartners.com) went public in 2001 and was distributed last year.
Local Investment: After investing nationally and internationally, the firm decided last year to change its focus to more local companies. "Because we work very closely with our portfolio companies, we are investing in companies in Southern California or within a one hour flight of San Diego," says Mr. Partovi. "San Diego is one of the top three locations for life sciences and wireless industries." In the firm's portfolio, there is only one company that is outside the one-hour flight zone from San Diego.
Outlook: Mr. Partovi believes the IPO market is back to where it was before the Internet bubble burst. For example, Accredited Home Lending has seen its stock climb almost 50% since its introduction in February. But that doesn't mean the entire future is positive. "It is difficult because we have to readjust expectations of companies in the boom time," says Mr. Partovi. He expects it will be hard for some of them to survive, but "we are working hard to refocus companies to survive in this environment."
Write to Jenny Reisinger at jennifer.reisinger@wsj.com