Posts Tagged ‘RIBBIT’

Allegis Capital: A New Venture Capital Model for Today’s IPO-Free Market

March 29, 2009

When you’ve been covering a beat for 15 years you think you know pretty much everyone you need to know. But one of the great things about Silicon Valley is the technology industry’s depth of talent. There are so many high quality people and it’s a blast when you make a new connection.

So it was a real pleasure when recently met Robert Ackerman, the co-founder of venture capital firm Allegis Capital. Check out this story I wrote this week about Bob and his venture firm, which is doing some real innovative work on the venture scene. As an extra bonus for my blog readers, I also added a two-minute video I shot with Bob at the office that wasn’t included in the BW article.

Can Venture Capital Come in from the Cold?
Allegis Capital and a handful of boutique firms are eyeing new investments amid a crisis of confidence among Silicon Valley VCs

By Spencer E. Ante

These days, many venture capitalists resemble mice, afraid to invest in the rough economy. But a few firms remain upbeat and aggressive, ready to pounce like a tiger.

One is Allegis Capital, a 12-year-old Silicon Valley VC firm that’s smelling opportunity amid a fearful market. Allegis doesn’t have a marquee name, but it’s put together one of the most impressive track records of any venture firm in recent memory.

Last July, Allegis sold Ribbit, a telecommunications provider it backed, to BT Group (BT) for $105 million. In 2007, it sold computer security company IronPort Systems to Cisco Systems (CSCO) for $830 million. Over the past four years, six companies in which Allegis has invested have sold for a total of $2.1 billion. “Venture capital is not broken,” says Allegis Managing Director and co-founder Robert R. Ackerman Jr. “Innovation is alive and well.”

That’s not the conventional wisdom in venture investing. The market for taking startup companies public has ground to a halt. The value of startups has fallen. And avenues for selling companies to corporate acquirers have narrowed while fundraising is scarce. Some investors have asked whether the venture capital playbook of raising large sums of cash and betting on a few home-run deals is in need of revision.

Yet smaller funds such as First Round Capital, Maples Investments, and angel investor Ron Conway’s Baseline Ventures continue to invest amid the economic downturn.

Read the rest of the story here.