OpenView Weighs Next Steps After Deep Layoffs: Return Investors’ Capital or Rebuild with New Funds?
Last week, OpenView Ventures made headlines after the venture capital firm abruptly shut down its operations. The firm also laid off a significant portion of its staff and put a halt to investments in new startups. Now, the company finds itself at a crossroads, grappling with decisions about its future direction and how to handle the $570 million recently committed by endowments and other institutions for its latest fund.
According to a report by The Information, citing an individual with direct knowledge of the discussions, the firm’s senior partners engaged in all-day meetings early Monday. The discussions revolved around reviewing the investment portfolio and considering two competing proposals.
In one scenario, partners would approach the fund’s backers, urging them to cancel their commitments and reducing the size of the latest fund. In an alternative scenario, partners would seek the backers’ approval to continue investing in new companies despite the significant leadership changes within the firm.
“Earlier Monday, the firm’s senior partners held all-day meetings to review their investment portfolio and discuss dueling proposals: In one scenario, partners would ask the fund’s backers to cancel their commitments and would reduce the size of the latest fund. In another, partners would seek the backers’ blessing to invest in some new companies despite a dramatic leadership change, according to a person with direct knowledge of the discussions,” The Information reported.
According to a report from Forbes, the abrupt downturn of OpenView can be attributed to the departure of two key leaders. The unexpected announcement of partner Mackey Craven’s exit in recent weeks reportedly took the firm by surprise. This sudden shift created a leadership vacuum at OpenView, leading to the decision to put a pause on new investments.
We covered OpenView back in March after the firm closed $570 million in funding for its seventh fund (Fund VII) to invest in high-growth software startups. The latest fund, which represents OpenView’s largest funding to date and a 25% increase over the firm’s sixth fund, will provide greater support to entrepreneurs during this difficult macroeconomic period.
Since its inception in 2006, OpenView has raised a total of $2.4 billion across its seven funds and has partnered with more than 60 companies including Datadog, Calendly, Axonius, JumpCloud, UserTesting, and Workfront, among others. The firm had a team of nearly 80 members, which resulted in a ratio of two and a half people per portfolio company.
Before its demise, OpenView was led by veteran investors including Scott Maxwell, Mackey Craven, and Blake Bartlett, along with a next generation of partners who joined the partnership in its sixth fund.