Oakland, California-based Claremont Creek Ventures has announced the final close of Claremont Creek Ventures II with USD175m, bringing to USD300m the firm’s total capital under management.
Oakland, California-based Claremont Creek Ventures has announced the final close of Claremont Creek Ventures II with USD175m, bringing to USD300m the firm’s total capital under management.
Claremont Creek makes early stage investments in information technology start-ups in the areas of health care, security and mobility. The new fund will continue the firm’s ‘life cycle venturing’ strategy of mentoring entrepreneurs prior to investment with active hands-on participation in company growth.
‘We seek out good entrepreneurs with great ideas – often investing and partnering with them at an earlier stage than would most venture capital firms,’ says Claremont Creek managing director Nat Goldhaber.
‘In addition to capital, we invest time and insight drawn from our own management experience, increasing our companies’ odds of success by providing strategic assistance. The ability to build great companies from the ground up is what differentiates investment funds.
‘We’re pleased that our limited partners agree that we’ve got the right strategy even during hard economic times. Our job is to create new jobs, new technologies and great American companies.’
Claremont Creek’s managing directors Goldhaber, Randy Hawks and John Steuart have navigated successful companies from garage-level through IPOs, mergers and acquisitions, not only as venture capitalists but also as company founders and executives themselves.
‘We’ve been investing through 25 years of economic cycles, so we’re not freaking out about the economy – for us, it’s business as usual,’ Steuart says. ‘We were investing in the 1980s and 1990s and during the dot-com bubble, so we know that some of the best companies – Cisco and eBay, for example – got started during recessions.’
Says Hawks: ‘Our investment style is entrepreneur-friendly and nearly recession-proof, aimed at building value over the long haul. Instead of jumping on trends, we look for sound value propositions, companies doing the ‘heavy lifting’ of technology.
‘It can take four to seven years to develop a new technology and bring it to market. By the time a company is ready for an exit, market conditions have usually changed. Even in bad economies, though, companies can succeed if they’re well-managed and their technology offers real value.’
Claremont Creek typically invests USD500,000 to USD3.5m in Series A rounds, with substantial reserves to support subsequent rounds. Investors gave the firm’s strategy a renewed vote of confidence, with all of the institutional limited partners, which include Harvard Management Company, the Regents of the University of California and the Verizon Pension Fund, returning to invest in the new fund.
The Life Cycle Venturing programme involves mentoring start-ups prior to investment. ‘By helping founders refine their product development and go-to-market strategies, make key hires, and close initial deals, we’re able to see how well we work together,’ Goldhaber says. ‘This gives us insight into what a company will need in order to succeed and whether we’re a good fit. If everything is working well, then we invest.’
Claremont Creek’s first exit was PropertyBridge, a ‘web 2.0’ billing solution for residential rental properties that was acquired by MoneyGram International in 2007. The firm’s founder and former chief executive, Ryan Gilbert, says: ‘Claremont Creek’s advice was invaluable, and we always felt they had our best interests at heart. I hope to work with them again with my next start-up.’
Founded in 2005, Claremont Creek works closely with local universities such as UC Berkeley and UC Davis as well as the Lawrence Livermore and Berkeley Laboratories.
