Mayfield Said to Be Seeking Smaller Fund Than Raised in 2008

Mayfield Fund, the venture capital firm founded in 1969, is seeking a smaller pool of capital for its next fund than the $400 million it raised in 2008, according to three people familiar with the plan.

Mayfield XIV aims to raise $300 million with a maximum of $360 million, said the people who declined to be named because the fundraising is private. The Menlo Park, California-based firm has a total of $2.7 billion under management.

Unlike a number of its Silicon Valley peers, Mayfield missed out on bets in social media companies whose returns have bolstered venture fundraising. Institutional Venture Partners, which backed Zynga Inc. (ZNGA), is planning to raise $750 million to $1 billion for its next fund. Elevation Partners LP, an investor in social media websites Facebook Inc. (FB) and Yelp Inc. (YELP), is seeking $1 billion. The two firms also are based in Menlo Park.

Kamini Ramani, a spokeswoman for Mayfield, declined to comment.

Mayfield makes early-stage investments in mobile, cloud- based business software, social media, energy and big data. As it solicits capital, Mayfield Fund can point to the pending initial public offering of SolarCity Corp. the developer of rooftop solar power systems whose chairman is Elon Musk. The company said in a statement April 30 that it’s planning an IPO.

Mayfield profited from its investment in data-storage supplier 3Par Inc. when it was sold to Hewlett-Packard Co. (HPQ) in September 2010. The firm, along with Menlo Ventures and Worldview Technology Partners, earned $560 million.

Expanding Team

The firm also has expanded its investment team last year by adding Tim Chang as a managing director from Norwest Venture Partners to focus on mobile, gaming, digital media and enterprise applications. It appointed two venture advisers and promoted two investment professionals at that time.

Mayfield was stung by bets made in Internet shares as the dot-com bubble burst in 2000. As a result, it raised $375 million in 2005, a steep drop from the close to $1 billion it raised in just three days in 2000.

Investors including Harvard University, the Massachusetts Institute of Technology and Stanford University decided against backing the firm’s 2005 fund due to concern over the losses.

Mayfield was co-founded in 1969 by Tommy Davis, a Harvard Law School graduate who worked for U.S. intelligence in Burma during World War II. It also manages a $111 million fund focused on early-stage investments in India-based companies.

To contact the reporters on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Tom Giles at tgiles5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.