Greycroft raises $175 million for third fund

From VatorNews: Looks like Greycroft Partners has a few  extra bucks to spend this Cyber Monday.  The VC firm behind companies like  Klout, The Huffington Post, Buddy Media, Trunk Club, Vizu, and others, announced Monday that it has closed its third fund to the  tune of $175 million.

Nearly all of its previous investors participated in the oversubscribed  round, including JP Morgan, BlackRock Private Equity Partners, Fairview Capital,  and Invesco Private Capital, as well as new investors Hall Capital, Hamilton  Lane, Greenspring Associates, and Cambridge Associates on behalf of their  clients.

The firm says that Greycroft III will follow the same strategy as previous  funds with a focus on B2B and B2C Internet and mobile companies.  The firm  will also focus on smaller Series A rounds, which allows Greycroft to generate  venture-type returns regardless of the IPO market.

Greycroft has already seen some big returns from its last two funds.  It  closed its first fund in 2006 for a total of $75 million, which it invested in  34 companies.  To date, 11 companies from Greycroft I have been sold at a  profit and the fund has generated a 130% return for its investors.

Greycroft II, a $131 million fund, was closed in April 2010 and has invested  in 32 companies, including Klout, Pulse, Tagman, and Maker Studios, among  others.  Four of the companies in Fund II have raised follow-up financing  in excess of $100 million.

With Fund II, Greycroft also branched out from Series A rounds to seed  rounds--with the caveat that it focuses on repeat entrepreneurs.

Greycroft has unique origins based on the idea that 1) startups today are  able to scale much more easily with less direct investment, and 2) large venture  firms have a habit of over-capitalizing early stage companies, which can have  the unintended consequence of blocking many exit opportunities.  Greycroft  launched in 2006 with the aim of spreading out its investments in $500K to $5  million increments (at inception).

“Many believed that venture capitalists should take board seats in every deal  and invest as much as possible in a concentrated set of companies,” said Ian  Sigalow, in a statement.  “Instead we focused on building investor  syndicates, even if it meant less equity for Greycroft, and finding capital  efficient businesses. This approach has resonated with entrepreneurs as well as  co-investors and our limited partners.”

Greycroft was not immediately available to comment, but the firm has  participated in a number of rounds this year, including Scopely, NiftyThrifty, AwesomenessTV, 33Across,  and Koding  Logs, among others.

Some of Greycroft’s portfolio companies that have existed in the last two  years include The Huffington Post, which was sold  to AOL, Babble, which was acquired  by Disney, Buddy Media, which was acquired by Salesforce, Vizu, which was  acquired by Nielsen Holdings, and more.

*Shared by Jeff Vertun, Scott Steuber & Ted Simpson

Downtown LA Draws Chinatrust Bank HQ, Highlighting Its Rising Appeal As A Destination

Ten of Southern California's Top Software Companies