Idealab Capital Partners has a new name and plans to open new offices in
Los Angeles and Silicon Valley, according to managing directors Bill Elkus
and Erik Lassila. The offices, along with the pleasantly incubator-free
name Clearstone Venture Partners, are part of the firms strategy to
survive an investment climate increasingly wary of venture investors who
made their fortune the height of the dot-com boom.
Founded in 1998 in Pasadena, Calif., the firm is searching for a new
home in Los Angeles, although in the meantime it continues to share office
space with Bill Grosss beleaguered incubator idealab!. Mr. Elkus,
who expects to settle on a new space shortly, said he plans to add to
the team of eight in the firms Los Angeles office. The firm has
already announced one of its new venture partner hires, Leonid Kazovsky,
a professor of electrical engineering at Stanford and head of the universitys
optical communication research laboratory.
Mr. Lassila will oversee the firms expansion in Silicon Valley.
According to Mr. Lassila, the firm has already settled on a space on Sand
Hill Road and plans to add another partner to its team of four by the
end of the year. The new partner will focus on early-stage deals in software
News of the firms new name and location were preceded by Clearstone
Venture Partners decision to forgo raising its third fund, with
a target of $500 million. Mr. Elkus said the decision, which was reached
last month, was due to the firms slower investment pace. Asked if
the fund-raising was cancelled due to lack of interest on part of investors,
Mr. Elkus said the firm nixed the idea before many of its potential investors
had a chance to respond to the offer.
According to Mr. Lassila, the decision was also influenced by the fact
that many of the companies in the firms portfolio will not require
as much follow-on financing as originally planned because theyve
reduced their burn rates. In recent months several of the firms
portfolio companies have announced layoffs, including San Mateo, Calif.-based
Zelerate, a provider of open source e-commerce business applications,
and Jobs.com of Irving, Texas, an online career recruitment and information
resource, which filed for Chapter 11 bankruptcy protection.
Mr. Elkus stresses that the firm continues to support all of its companies,
but wouldnt disclose how much of the $200 million left from its
second fund is earmarked for follow-on financing. That number changes
week to week, he said.
He said the firm still has enough to make at least eight to 12 new investments.
Mr. Lassila expects the remaining capital to carry the fund through 2002.
The firm has just closed deals with Neomar, a wireless software company,
SummitLogic, an enterprise application provider, and Zyoptics, a wireless
optical networking company.