The JVP IV fund plans to invest in young communications and Internet nuts-and-bolts companies that are seeking early rounds of financing. The fund will allocate approximately $15 million per company over the life of the fund, with initial investments ranging from upward of $5 million for a software company to around $10 million to $15 million for large equipment makers.
"Israel has great technologies and has one of the highest ratios of technologists per capita in the world," said Glen Schwaber, a general partner with JVP's New York office. "There are a lot of technologists that have come from the universities, military and multinational corporations that have set up development centers there."
Within the telecommunications and Internet industries, JVP focuses its investments in fiber-optic components and systems companies, along with storage area networking, wireless and Web hosting businesses.
In addition to seeking companies that have a strong management team and technology, JVP also invests in companies with access to U.S., European and East Asian markets. Some of the companies that have received investments from this fund include Internet Protocol services equipment maker Quarry Technologies and Internet content routing-system developer Magnifire.
JVP typically participates in rounds that will fund a company's operations for 12 months to 18 months before it needs its next equity infusion, Schwaber said. Its per-company investments have gotten larger, as the climate has gotten more difficult for companies to raise money in shorter time spans.
"We're putting in more money in first-round investments than we have in the past," he noted.
JVC is also expanding its investment strategy to include optical companies in the Boston, New York and Washington, D.C., areas, where the firm has seen a lot of activity in the industry.
The venture firm hopes to ultimately raise upward of $500 million for JVP IV, which it expects to close in September. The fund's investors include France Telecom, Boeing, Nortel Networks, Columbia University, Merrill Lynch Ventures, the Government of Singapore, Hebrew University and Bank Leumi.