OpenView Venture Partners stops investing, in surprise move
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.