Dec 6, 2023 - Business

OpenView Venture Partners stops investing, in surprise move

Dan Primack

Illustration of a hundred dollar bill missing Ben Franklin and covered with a "sorry, we're closed" sign — Illustration: Sarah Grillo/Axios

OpenView Venture Partners of Boston has suspended investing in new companies and laid off most of its employees, less than a year after raising $570 million for its seventh fund.

Why it matters: It's not unheard of for VC firms to shut down, even after securing commitments for a new fund. But no one seems to remember one ever doing so after calling down around 20% of that fund, in a valuation environment that should benefit its expansion-stage strategy.

News of the fund suspension and layoffs were first reported by The Information.

History: OpenView was founded in 2006, and counts Datadog as its biggest homerun. It fell short of target with Fund VII, but $570 million was still significantly more than it had ever raised.

Behind the scenes: Sources say that at least one of OpenView's senior partners, Mackey Craven, no longer wanted to continue with Fund VII. This would have triggered a keyman clause, given the prior departure of partner Ricky Pelletier (who left in April).

But OpenView decided to preemptively suspend, and yesterday told LPs that the firm would provide a new strategic plan within three to six months.
As for why top partners bailed, putting dozens of people out of work just before the holidays, sources remain hazy. But it sounds like a strategic/financial disagreement, not wrongdoing.
The firm is declining to comment.

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OpenView Venture Partners stops investing, in surprise move

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