OVP Venture Partners, one of the Pacific Northwest’s leading venture-capital firms during the dot-com era, appears headed for a final exit strategy — its own.
Gerry Langeler, one of OVP’s six managing partners, told the business-news website Xconomy.com that the firm won’t raise any new funds and plans to wind down its business — which now mainly consists of nurturing the two dozen companies currently in its portfolio — in four or five years.
Langeler did not respond to a telephone message Thursday from The Seattle Times asking about the report.
However, Kirkland-based OVP hasn’t launched a fund since 2007, and the firm’s website notes that it’s no longer accepting business plans from companies seeking funding.
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Langeler told Xconomy that he and Chad Waite, another OVP managing director, weren’t willing to commit to a new fund, given that VC funds can take a decade or longer to mature and they would be in their 70s by that point.
The firm, founded as Rainier Venture Partners in 1983, helped fund many successful companies during the technology boom, including Bellevue-based Coinstar, Bothell-based Seattle Genetics and Xilinx, a maker of field-programmable computer chips in Silicon Valley. (It changed its name to Olympic Venture Partners in 1987, then, under pressure from the U.S. Olympic Committee, to OVP about 10 years ago.)
But for the past decade or so, OVP has struggled to match its earlier successes.
After its first two funds posted single-digit returns, OVP launched its third fund in 1994. That fund returned 2.23 times its invested capital, according to Seattle Times analysis of reports from two big investors, the Washington State and Oregon public-pension funds.
The fourth fund, raised in 1997, did even better, with a “value multiple” of 2.62. But the fifth fund, launched in 1999 as the dot-com boom was cresting, returned just 27 cents per dollar invested. The sixth fund, raised in 2001, has returned only about 40 cents, including the estimated value of companies still in portfolio.
OVP’s latest fund, its seventh, raised $250 million in 2006 and 2007. So far it hasn’t returned any capital to investors; its 0.68 value multiple reflects only the estimated value of its portfolio companies.
Investors in VCs get repaid when the fund’s portfolio companies are either bought by someone else or go public. About half of OVP’s 100-plus investments over the years have had such “liquidity events,” with mixed results.
Coinstar, for instance, went public at $10.50 a share in 1997; its shares closed Thursday at $45.01. Seattle Genetics, which went public at $7 a share in 2001, now trades above $24.
But Seattle digital-media company Loudeye, whose 2000 IPO was $160 per share when adjusted for subsequent reverse stock splits, was bought by Nokia in 2006 for just $4.50 a share.
California-based Complete Genomics, which went public nearly two years ago at $9 a share, briefly soared above $17 before coming back to earth; it’s being bought by a Chinese company for $3.15 a share.
This report includes information from The Seattle Times archives.
Drew DeSilver: 206-464-3145 or email@example.com