Morgenthaler

For other uses, see Morgenthaler (disambiguation).

Morgenthaler

Type	Private ownership
Industry	Private equity
Founded	1968
Founder(s)	David Morgenthaler
Headquarters	Cleveland, Ohio, United States Menlo Park, California, United States
Products	Venture capital, Leveraged buyouts
Total assets	$2.8 billion[1]
Employees	30+
Subsidiaries	Morgenthaler Ventures, Morgenthaler Partners
Website	www.morgenthaler.com

Morgenthaler is one of the oldest private equity investment firms in the US investing through both venture capital and leverage buyout transactions. Morgenthaler operates two connected private equity businesses:

• Morgenthaler Ventures – venture capital business focused on life sciences and information technology investments
• Morgenthaler Partners – buyout business focused on management buyouts, leveraged recapitalizations and leveraged rollups.

The firm which was founded by David Morgenthaler in 1968, is based in Cleveland with offices in Menlo Park, Boston, Boulder, Colorado and Princeton, New Jersey.

History

David Morgenthaler founded the firm in 1968 after a career as an operating executive. From 1957 until 1968, Morgenthaler was CEO of Foseco, Inc., a manufacturer of specialty chemicals owned by early venture capital firm J.H. Whitney & Co. After selling his venture-backed business to an international company, Morgenthaler decided to pursue venture capital investing on his own.

History of private equity and venture capital

Early history (Origins of modern private equity) • The 1980s (LBO boom) • The 1990s (LBO bust and the VC bubble) • The 2000s (Dot-com bubble to the credit crunch)

v · d · e

Morgenthaler shifted from a family partnership and began raising institutional funds in the early 1980s. Since its inception, Morgenthaler has worked with entrepreneurs in approximately 300 companies.

David Morgenthaler

In addition to his role in building a nationally focused venture capital firm, Morgenthaler also took a leadership role in establishing the legitimacy and potential of the nascent venture capital industry.

He served from 1977 to 1979 as the President and then Chairman of the National Venture Capital Association (NVCA).

During Morgenthaler's tenure at NVCA, he was called to testify before Congress in support of the capital gains tax reduction enacted in 1978. He was also involved in changing the ERISA legislation in 1979, allowing for pension funds to invest in private equity for the first time. (See also: Early history of private equity: Regulatory and tax changes)

Morgenthaler was awarded the first National Venture Capital Lifetime Achievement Award in 1998 for his role in the emergence of the venture capital industry. Morgenthaler was inducted into the Private Equity Analyst's Venture Capital Hall of Fame.

Earlier in his career, Morgenthaler was a member of the management team of several young growth companies. He received both a BS and a MS degree in mechanical engineering from the Massachusetts Institute of Technology in 1941.

Investment funds

Since the 1980s, when Morgenthaler began raising private equity funds from institutional investors in the early 1980s, the firm has raised over $2.8 billion of investor commitments.

• 1985 - Morgenthaler Venture Partners II - $ 30m
• 1989 - Morgenthaler Venture Partners III - $ 65m
• 1995 - Morgenthaler Venture Partners IV - $ 135m
• 1998 - Morgenthaler Venture Partners V - $ 300m
• 2000 - Morgenthaler Venture Partners VI - $ 575m
• 2001 - Morgenthaler Venture Partners VII - $ 850m
• 2005 - Morgenthaler Venture Partners VIII - $ 450m
• 2008 - Morgenthaler Ventures IX - $ 400m+

Historically, Morgenthaler funds have made both venture capital and leveraged buyout investments out of the same fund. In November 2008, Morgenthaler Ventures exceeded its fundraising goal and closed its ninth fund (Morgenthaler Venture Partners IX) at slightly more than $400 million. MVP IX is the first Morgenthaler fund to focus solely on venture capital investments. By comparison, Morgenthaler Ventures was allocated approximately $315 million to invest in the previous fund.^[2]

Investments

Over the course of more than 40 years, Morgenthaler has made investments in over 300 companies across its venture capital and buyouts businesses.

Notable companies in Morgenthaler’s current portfolio include: Evernote, NexTag, imeem, OncoMed Pharmaceuticals, Avtron, Satiety, and Cortina Systems. Other investments include BlueArc, JasperSoft, Nominum, Peregrine Semiconductor, Unity Semiconductors, and Voltage Security.

References

• David Morgenthaler, March 23, 2006
• Venture Firms Worried Caution flags raised at annual conference, 1996
• Smart Leaders: DAVID MORGENTHALER
• Morgenthaler closes seventh fund on $850m, August 2001.
• Morgenthaler Ventures Wraps Up 2006 With 3 IPOs and 2 Mega M&A Events
• Navigating Sand Hill Road, 2006
• Investors turn away from Ohio as heavy use of tax dollars to woo jobs doesn't pay off. The Toledo Blade, 2006

1. ^ Capital raised since inception
2. ^ Morgenthaler Ventures closes ninth fund on $400m. November 2008

External links

• Morgenthaler (company website)
• Morgenthaler Ventures Profile (The Funded)