ATA Ventures closes $150m debut fund

The new venture fund, which will focus on IT investments, comes online at a time when established firms crank out their follow-on funds.

Venture capital firm ATA Ventures has announced the close of its premier fund on $150 million (€117 million).

The firm will focus on information technology that utilizes “integrated solutions”, including nanotechnologies, semiconductors, integrated optics and emerging software, according to a statement.

The Redwood City, California firm was officially launched earlier this year by investment professionals Michio Fujimura, Hatch Graham and T.  Peter Thomas, each of whom bring a different background to the firm. Fujimara spent the last 15 years as owner and operator of Vanguard Systems Consulting (VSC), a venture consultant business in the Silicon Valley area. Hatch co-founded several telecommunications companies including Wave7 Optics in Georgia and California-based Resonext. Thomas rounds out the group as a veteran venture capitalist, serving as a general partner since 1985 at Menlo Park, California-based Institutional Venture Partners (IVP).

According to Graham, the three decided to team together a year and a half ago when they noticed that many new investment ideas were not getting serviced by the more established venture funds, which were busy sorting out portfolio company issues. Fujimara’s firm had served as advisor to both IVP and for some of Graham’s companies.

Graham says the fundraising kicked off in September 2003 and was more-or-less closed by the end of July. However, the firm kept a $5 million slot open for one investor that needed to have a board meeting in September to make a decision. Officially, ATA’s fund closed Sept. 30. “We had been turning away investors since July,” Graham adds.

Limited partners in the fund comprise a variety of foundations, endowments, pension funds, and fund of funds, and also include the Hewlett Foundation.
The close of a first-time venture fund is highly unusual in today’s fundraising environment, as many LPs are leery to invest with new firms following the tech bust. A report issued by the National Venture Capital Association (NVCA) and private equity data provider Thomson Venture Economics earlier this week also said that follow-on funds continued to be trend.

But Graham says many established venture firms have had to turn away LPs as a result of smaller fund sizes, and as a result, these spurned investors have sought to allocate their capital into other funds.