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Four-year old venture capital firm Valhalla Partners received a vote of confidence when it recently closed its second fund at $260 million. The Northern Virginia-based firm closed its $174 million first fund in 2003 and is still waiting for its first venture capital exit. Despite that, most of the firm's previous backers invested again while new investors poured in an additional $80 million.
Interestingly, Valhalla modified the terms of the new fund. Its first fund has a 2.5% annual management fee and 20% carried interest, the standard in the venture capital industry. To earn the right to a premium carry, the firm lowered capped its management fee in this second fund at 2% while having a carry that moves up from 20% to 25% if the firm reaches a multiple of 2.5 times the original investment.
Founded by NEA veteran Art Marks, Valhalla has backed 16 startups including Bethesda, Md.-based GetWellNetwork Inc., Herndon, Va.-based RealOps Inc., Fairfax, Va.-based ServiceBench Inc., Iselin, N.J.-based Enterprise DB Corp., and Boulder, Colo.-based LeftHand Networks Inc.
For more on Valhalla's new fund, see:
The Deal
Washington Business Journal
Valhalla Partners Press Release (pdf)
Tags: valhalla, valhalla+partners, vc, venture capital
First off, thanks for reporting on our fund raise. It is an exciting time for our fund, but also for Mid-Atlantic technology community in general.
I did want to correct one element of the story, however. The terms of our Fund did not change between Fund I and Fund II. In both funds, we have a budget based fee with a 2% cap, and a provision which enables us to earn our way to a premium carry. Both of these are what I would call non-traditional (or at least less-traditional) features, but we think it is a better way to align our incentives with those of our Limited Partners.