Venture capital firm Industry Ventures has closed a hybrid fund of funds, with a total of $170 million of institutional capital, it was announced on Tuesday. The fund, which was oversubscribed, is called Industry Ventures Partnership Holdings III, L.P.
The Fund will target primary commitments and early secondary purchases in smaller venture capital funds as well as direct investments alongside its managers. This latest close brings the firm’s total capital under management to over $2 billion. It had most recently closed a $425 million secondary fund in December of last year.
Founded in 2000, Industry Ventures invests with two kinds of strategies. First, it does secondary funds that offer liquidity alternatives for direct investments and limited partnership interests. It also does funds of funds that invest in small funds with outsized return potential; this is what Industry Ventures Partnership Holdings III will do.
"Partnership Holdings focuses on investing with small venture funds, typically sub-$250 million, through LP interests, meaning primary commitments and early secondary purchases, and direct co- investments," Roland Reynolds, Managing Director at Industry Ventures, explained to me. "The companies in these investment areas are early-stage, which are primary commitments, and mid-stage, which are early secondary purchases and direct co-investments."
The firm's direct co-investments are typically in Series B or C rounds for some of the break out companies which have been funded previously by fund managers in which Industry Ventures is a limited partner, he said. Those fund managers include Altos Ventures, Amplify Partners, Costanoa Venture Capital, Foundry Group, IA Ventures, Jafco Ventures, K9 Ventures, Lowercase Capital, OATV, SoftTech VC, True Ventures, and Upside Partnership among others.
"We maintain our disciplined investment strategy and are certainly paying attention to valuation relative to growth and burn rate in the current environment," Reynolds said. "We are re-upping with our best performing fund managers and also remain committed to identifying and investing with promising new first time fund managers."
Through its Partnership Holdings strategy, Industry Ventures has also had both direct, and indirect, exposure to some pretty big companies and investment opportunities, including Twitter, Uber and Zynga.
With the new fund, Industry Ventures expects to invest with between 10 to 15 firms and make 15 to 20 direct co-investments.
"Our partnership holdings strategy will continue to focus on small, outperforming VC fund managers. Collectively, they are among the best in the world at identifying investment trends and investing with the most capable and passionate entrepreneurs—we will continue to make direct co-investments in their breakout companies," Reynolds said.
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Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company uses a smartphone application to arrange rides between riders and drivers.
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Industry Ventures is a leading investment firm focused on the venture capital market. Founded in 2000, the firm manages over $1.7 billion of institutional capital. Industry Ventures invests with two strategies: i) secondary funds that offer liquidity alternatives for direct investments and limited partnership interests and ii) funds of funds that invest in small funds with outsized return potential.
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Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.
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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users. Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered at the Chip Factory in San Francisco. For more information, please visit www.zynga.com.
