Matrix Partners featured in Wall Street Journal: “Matrix Partners Waves Off Venture Industry’s Liquidity Woes”July 21, 2009
By Venture Capital Dispatch
July 21, 2009
It’s well documented that Paul Ferri, the founding partner of Matrix Partners, has in the past been one of the most vocal critics of the venture capital industry, often asserting that it has too much capital for its own good.
He told the Wall Street Journal in 2006 that his firm had returned “damn little” money to limited partners in the previous six years. “I thought by now investors would have figured out that our industry is not an economically viable business model,” he said at the time.
No matter, Matrix Partners, one of the best-known U.S. venture firms, hasn’t stopped raising more money from limited partners. That same year, Matrix raised $450 million for its eighth fund, and now it’s heading out to market to round up the same amount for a ninth fund, along with a smaller side vehicle.
According to a regulatory filing today, Matrix Partners IX LP has a target of $450 million. The Waltham, Mass.-based firm has yet to close on any of that capital, the filing said. The firm also filed for a $150 million side fund, Matrix Partners IX Special Opportunities Fund LP, which likewise remains to be raised.
Efforts to obtain comment from Matrix were unsuccessful.
The firm has been beefing up its staff of late, adding two partners to its Menlo Park, Calif., office within the last year. It has ten U.S. partners, with six in Waltham and four in Menlo Park.
Matrix has also been active overseas, closing a $250 million China fund last year. Matrix had expanded into India in 2006, raising a $150 million fund that it subsequently increased to $400 million. Its seventh U.S. fund closed in 2001, raising $1 billion; Matrix later reduced that amount to $500 million.
Along with the recession, a lack of liquidity has hurt the venture industry. Despite this, Matrix has managed to score at least one positive exit in the last 12 months in the sale of PostPath Inc. to Cisco Systems Inc. for $215 million in cash last August, more than seven times what its venture backers had invested.
The technology investor looks to initially invest in seed rounds of $100,000 to $300,000 or up to $10 million in early-stage company financings.