Venture capital is a high-risk, high-reward game where the funds at the top tend to grab the lion’s share of the returns.
And who was at the top of that elite list in 2013?
Bloomberg analyzed venture-backed acquisitions and IPOs over the past 12 months and found that 10 firms each generated more than $1 billion in returns, cashing in (at least on paper in some instances) on the public offerings of companies such as Twitter, FireEye and Nimble Storage. That sort of success runs counter to the mind-numbingly bad returns that many VC firms have experienced in recent years, with returns for the entire industry unable to outpace the public markets.
Among the firms that made the $1 billion club were Silicon Valley stalwarts such as Accel Partners, Benchmark, Sequoia, Kleiner Perkins and NEA (an early-backer of Seattle-based Tableau, which went public this year and is now valued at $3.9 billion). Others included Spark Capital, Norwest Partners, Union Square Ventures, Emergence Capital, according to Bloomberg.
Maveron, the Seattle venture capital firm founded by Starbucks Chairman Howard Schultz and former investment banker Dan Levitan, also made the list. That’s not too surprising to us since the firm was an early backer of Zulily, the fast-growing daily deals site that went public last month and now has a market value of more than $5 billion.
Maveron, which has already cashed out a small percentage of its shares in the company, initially invested $4.6 million in Zulily. And its 22 percent stake (24.6 million shares) is now worth just north of a billion. (No wonder it was chosen as “Deal of the Year” by Seattle venture capitalists earlier this month).
But that was not the only success for Maveron, which also saw Chicago-based sandwich shop Potbelly go public in October. Maveron owns roughly 20 percent of Potbelly, about $147 million worth.
In both cases, Maveron was super early with its investments, backing the companies when they were just getting off the ground.
That can be a riskier time to invest, but also can allow venture firms to accumulate larger ownership positions.
Interestingly, Maveron — an early backer of eBay — may be using the new-found success to cash in on its own.
SEC filings last week show that the firm is raising $100 million for Maveron Equity Partners V and $6 million for the Maveron V Entrepreneurs’ Fund. Representatives for the firm were not available to comment on the filings.
Maveron earlier this year set up an early-stage seed fund to bankroll emerging consumer-oriented startups, though the cash came via the firm’s $240 million fourth fund, raised back in 2008.
Looks like 2014 may be a fundraising year for Maveron. And given the recent success Levitan and crew should have little trouble finding fresh capital.
What do they say about striking when the iron is hot?