Matrix Partners began in Boston in 1977 as Hellman Ferri Investment Associates, one of the first firms on the East coast to have a startup technology focus. The firm was a founding investor in Apollo Computer, Stratus Computer and Continental Cable (now Comcast), and an early investor in Apple Computer.
In 1982, Paul Ferri re-established the firm as Matrix Partners and opened a Silicon Valley office. As one of the few firms to maintain a bi-coastal presence, we have enjoyed the privilege of seeing a high percentage of the leading ideas that have come out of the two primary hubs of American innovation.
Matrix Partners invested heavily in the backbone of the quickly expanding Internet, helping to create such companies as Sycamore Networks, Cascade Communications, and Alteon WebSystems. Our successful investment track record continued and our fifth fund was deemed to be one of the highest performing venture funds of all time, according to Prequin and top limited partners.
We increased our focus on consumer Internet companies, investing in TheLadders and Gilt Groupe, two fast-growing businesses innovating in the employment and e-commerce sectors respectively. Matrix Partners has also expanded globally, launching our first India fund in 2006 and then expanding into China in 2008.
When does experience make a difference? When a company is having a hard time. You don't want a board member who is learning on the job. Things are always tougher than you think they're going to be.
Paul Ferri, Founding and General Partner, Matrix Partners
We are very selective in the investments we make. We make few new investments per year and have a very high quality bar. We seek to invest only in outstanding individuals and companies we believe have the potential to become industry leaders.
We aim to maintain life-long relationships with entrepreneurs. We aim to earn the trust of our entrepreneurs by working hard, being straightforward, and supporting them throughout their careers. In our view, the most important measure of whether we have done a good job on your behalf is whether you choose to partner with us in your future ventures.
We are long-term in our orientation. We recognize that building companies takes time, especially in the current environment. It often takes more than seven years for a start-up to reach a liquidity event. We are well capitalized and patient, and we have stood by some of our entrepreneurs for more than a decade -- long after other investors walked away.
We are actively involved with all of our investments. We seek to develop close relationships with founders and management teams and we always take board seats.
We are collaborative in our approach. We do not get involved in the day-to-day details of operating your company. We go out of our way to listen and learn before we speak. We will not get in the way of you running your company. We understand that you do the heavy lifting and it is our job to help you.
We focus on the most important issues. There are a small number of opportunities and challenges that can make or break a company. We try to help entrepreneurs stay focused on those critical issues rather than get distracted by insignificant details.
We work hard. We define success not by the number of investments we make, but by making investments in companies that work. We truly care about the businesses in which we invest and are dedicated to helping entrepreneurs achieve their goals. Our average board load per partner is significantly less than most of our peers. This enables us to expend a great deal of time on behalf of our portfolio companies.
There are two ways we measure our own performance: the financial returns we deliver to our investors and whether we earn repeat business from the founders we support.
We are very fortunate to have very strong relationships with the highest quality, long-term-oriented limited partners. Although we do not publicly disclose returns, a Freedom of Information Act request in 2003 led to the release of data for nearly 100 venture capital funds. According to the data, Matrix delivered the top performing funds in terms of IRR. Additionally, Prequin released a list of the all-time best performing VC firms, ranking Matrix V #1 and Matrix IV as #3.
We consider ourselves fortunate to count among our long-term partners entrepreneurs such as Hassan Ahmed (Sycamore, Sonus), Ashraf Dahod (NetCore, Starent), Desh Deshpande (Cascade, Sycamore), Jim Dolce (Arris, Redstone Communications, Verivue), Kingston Duffie (WhiteTree, Turnstone, Fanfare), Rubin Gruber (Videoserver, Sonus, Verivue), Mike Hluchyj (Sonus, Verivue), Chris Midgley (LiveVault, Unidesk), Frank Moss (Apollo Computer, Tivoli), Dominic Orr (Alteon, Aruba), Jit Saxena (Applix, Netezza) and David Skok (Watermark, Silverstream), now a General Partner at Matrix.
According to a recent Harvard Business School study, Matrix maintains the highest rate of repeat entrepreneurs in the venture industry.