Ignition Partners raises $150M fund, opens new Silicon Valley office

ignition-logoIt’s a new era for Ignition Partners.

The Bellevue venture capital firm has a new fund, new offices and a new direction as it celebrates its 13th year. Today, the firm — an investor in companies such as Glympse, DocuSign and Splunk — is announcing that it has closed on a $150 million fund.

Ignition’s fifth fund has a decidedly different makeup than the previous funds. Not only is it far smaller in size, but none of the original founders of the firm are involved.

Original partners such as Brad Silverberg, John Ludwig, Steve Hooper and Jonathan Roberts will not invest new money on behalf of the venture capital firm, instead helping to manage the existing portfolio.

The new Ignition will be led by Frank Artale, John Connors and Nick Sturiale, a longtime venture capitalist who will establish the firm’s new Silicon Valley office in Palo Alto. In addition, the firm recently moved to new offices in downtown Bellevue.

artale-standing

Frank Artale

Artale tells GeekWire that the firm will likely make 15 to 18 investments from the new fund, primarily series A and series B deals in the $2 million to $5 million range. It will focus on business software and cloud computing, areas of expertise for Artale.

Ignition has recently made a number of bets in California startups, and that investment thesis will likely continue under the new leadership, especially since the partners have deep connections in the entrepreneurial communities in the Bay Area. It also follows news that Paul Allen’s Vulcan Capital recently established an office in the Bay Area.

“The moves are part of a transition toward creating a more-focused partnership with a larger Silicon Valley presence—and one with deep operational experience in the enterprise,” the firm wrote in a press release. “The new dual-geography presence will give the firm access to innovative ideas, and talent, in both markets.”

Artale said that limited partners wanted to see the firm spend more time in the Valley, one of the reasons why they established a new outpost there.

Artale already has a number of investments in the Bay Area, and he plans to continue to scour that region for the very best deals in the months to come. He said it is too early to say how many of the new investments will take place in the Bay Area versus Seattle, though he expects the split to weigh a bit more towards the Valley.

“We have such strong networks (in the Bay Area) that it would be foolish to not maximize that,” said Artale. “It is all based on ideas, and talent. It is really not location-centric.”

In addition to Connors, Artale and Sturiale, the new fund will consist of administrative partner Robert Headley; venture partner Cameron Myhrvold; Chief Financial Officer Jack Ferry; and principal Kristina Kerr Bergman.

The new direction at Ignition could signal challenges ahead for the Pacific Northwest venture capital community, which has seen the disappearance of long-time funds such as OVP Venture Partners and Frazier Technology Ventures in recent years.  To some degree, the only major venture capital firms left in the region are Madrona Venture Group, which successfully raised a $300 million fund last year, and Maveron, which recently announced a new seed fund program.

Having just one or two major VCs in a region could create hurdles for startups looking to raise money. Nonetheless, venture capitalists sunk $931 million into 117 startup companies in the state last year, the biggest total since 2008.

Artale, a former executive at Citrix, XenSource and Microsoft who joined Ignition in 2011, said that they will continue to support the entrepreneurial ecosystem in Seattle. But, at the end of the day, he doesn’t see it as a venture capital problem.

“Entrepreneurship draws capital,” said Artale when asked about the potential lack of VC dollars in the Northwest. “It is more about … creating entrepreneurs that actually think big. That’s what venture wants to invest in….. It is both a bottoms-up, and a tops-down. I can tell you, when there are great ideas, and great companies being created, then venture capital will be here from everywhere.”

Meanwhile, Chris Howard, a principal at Ignition, is exploring the possibility of investing in seed-stage deals. That effort would operate separately from Ignition, though Artale said that they plan to work directly with Howard in whatever initiative he gets off the ground.

As to next steps for the other founding partners, Artale said he did not have details on their moves.

“It all depends on the person, and the person’s aspirations,” he said. “I don’t have explicit knowledge of what everyone’s plans are, but I know their first priority is to the companies they are working on…. Like anything else, over time people will make decisions individually.”

Previously on GeekWireIgnition’s Cam Myhrvold: The problem in Seattle isn’t money, it’s the entrepreneurial talent

  • HoustonWeDontHaveIgnition

    Suck it Chris Howard! This is what they call karma.

  • matt mcilwain

    Congratulations to John, Frank, Nick and team. We are really glad to have Ignition continuing to play an active and value-added role helping to build companies in the Pacific Northwest. Let’s continue to invest in and build an amazing innovation economy in the PNW. The greater Seattle area in particular is already the cloud computing capital with AWS, Azure, Parallels, EMC/Isilon and many others. And, leveraging this strong position to help lead the “Empowered Enterprise” movement and the real opportunities in “big data analytics” should be a shared goal of the broad investment community.