The New CRV XVI Fund
— Jon Auerbach, CRV
CRV announced our new fund today. It is our 16th fund, spanning 44 years of early-stage venture investing. And while the fund is the culmination of decades of operating experience and strong results, it is more about the new CRV than about the firm many have known as Charles River Ventures.
In our early years, Charles River Ventures invested in some of the defining companies of the pre-Internet and early-Internet ages. We worked with founders at MCI who disrupted the telecommunications industry, with entrepreneurs at Ciena who built the fiber optic backbone that helps run today’s Internet, and with hundreds of other startups who were working to change the world through technology.
Since those days, we’ve helped 73 portfolio companies IPO — a remarkable 18+% of the firm’s total investments. And in the last decade, CRV has invested in eight “unicorn” companies where each reached an outcome of more than a billion dollars. As CB Insights pointed out last month, there aren’t many other early-stage investors with that kind of track record.
We remain committed to Boston. With our strong brand, our 44-year-old network, and our Boston-based team, we will continue to invest in the market, particularly in enterprise software, infrastructure and robotics where there have been large exits and there are very high potential companies. But the West Coast is where the center of gravity for technology and investing, especially in consumer, mobile and cloud computing, has clearly shifted. Over the past 12 years, we’ve taken our rich East Coast history from our office next door to MIT and gone West.
CRV XVI is the first fund we’ve raised with the bulk of our investing team in the Bay Area. A decade ago, the majority of partners and our portfolio were East Coast-based. Today, that’s totally reversed. Six of our eight investors are based in Menlo Park, and our team has worked with some of the world’s most talented entrepreneurs at companies like Twitter, Yammer and Zendesk who are building the next consumer Internet giants and revolutionizing the way enterprises work. Those three companies alone have a combined market value of more than $24 billion today, and CRV was the first institutional investor in all three — something we are very proud of.
In addition to our physical presence in Silicon Valley, we’ve also made a symbolic change. As much as we love the Charles River, we are now CRV. Even more important than the name, we have created a clear and deliberate articulation of the values we think make CRV unique among venture firms.
These values are front and center on our website, and they all stem from our deep respect for entrepreneurs. We are lucky enough to be in business with change-the-world entrepreneurs, and we don’t take it for granted. Because we invest early, the relationships we build with founders last years, not months, often through pivots and growing pains, and we want to be with them for every part of the ride. We often say that we strive to be the board member the entrepreneurs want to call, not the one they need to call. We mean it.
Rather than raise large funds and adopt multi-stage business models, CRV has stayed committed to early-stage investments with small funds. We think it’s the best model for our firm, and our Limited Partners seem to agree. This latest fund of $393 million was raised in record time. We spent two weeks meeting with our Limited Partners and closed a few weeks later. We are deeply honored to have earned the trust of the foundations, endowments and pension funds that invest with CRV. We don’t take that trust lightly. And we are deeply indebted to the world-class entrepreneurs who have accepted us as business partners throughout the years.
For those of you who run teams or work in teams, you know that team dynamics are the critical factor in defining success. Our team now includes investors with a combined experience of almost 70 years in venture capital — Devdutt Yellurkar, George Zachary, and Saar Gur based in Menlo Park, and Izhar Armony and me in Boston. But it also includes young investors on the West Coast, such as Annie Kadavy, Max Gazor, and Rafael Corrales, all of whom bring great experience and insight to our table. They are as much the future of CRV as our move West. And we couldn’t be more excited about our next chapter.