Menlo Ventures Launches $20 Million Early Stage/Talent Fund


Shervin Pershevar announced on stage at the AOL TechCrunch Disrupt 2011 conference that he and Menlo Ventures has started a $20 million fund.  The fund will be called the Menlo Talent Fund.

Shervin and his team at Menlo Ventures will invest $200,000 in early stage startups.  According to the news  Menlo will turn around a decision super fast – within two days.

The fund was financed last October with the closing of Menlo Ventures XI. It has already invested in eight companies, including: The Backplane, CakeHealth, Comprehend, LeanLaunchLab, Parse, RG Labs, and Tracksby. One company is yet to be announced.


Big Issue – Follow On Financing

Twenty million ($20m) seems to be the magic number for early stage “micro VC” funds these days.   Having a small fund makes doing deals easy, but the core issue is the ability to do follow on financing.  Most smaller funds the other “microVC” funds can’t do follow on or rely heavily on other firms to take the next round otherwise the startup is sunk and out of business.  This won’t be a problem for Menlo Ventures because it is sitting on billions under management.

Shervin is a quality individual and he brings that early stage and experienced entrepreneurial talent to Menlo which has a cloud over their head lately of having a reputation for being a slow and stodgy firm.  My personal experience has been positive with Menlo and their partnership is smart.  However I would  agree they are slow to move on deals.

“There is a war for talent today- to build companies of consequence founders need to attract exceptional people,” said Pishevar, “We are seizing the opportunity to support the next crop of leading companies with the Menlo Talent Fund, focused on helping great founding teams access capital quickly to build and scale their companies with the talent, mentorship and guidance they need to win.”

-Shervin Pershevar

Menlo Ventures also announced the creation of Menlo Founders Council, a master’s council consisting of mentors, advisors and investors to support entrepreneurs at Menlo-sponsored retreats and events.

The Menlo model is good in that it focuses on the individual entrepreneur and team.  Plus each individual partner can invest up to $250,000 in a startup without getting another partner involved.  If the amount of money increases (say due to demand and bubble factors) then the other partners need to huddle to approve the deal.  No matter which scenario the Menlo advantage is that the partners can do deals quickly or as they say here in Silicon Valley – “Pull the trigger fast on quality entrepreneurs and teams”.

I see this as a great opportunity for Shervin to spread his wings.  I’ve personally known Shervin for a few years since he founded SGN, and he is a quality individual and really cares about startups and people.  Plus he has some experienced entrepreneurs around him.  The only issue that Shervin needs to worry about is that of diversity.  Most of the micro VC and VCs in Silicon Valley are not diverse groups and they tend to get into herd mentality or group think.

Here are Shervin’s slides during the announcment at AOL Techcrunch’s Disrupt event in San Francisco.