Venture Capital Journal

MENLO PARK, Calif. — A pair of Kleiner Perkins partners have formed their own Silicon Valley venture firm, leaving the venerable partnership after five years. Alexander Barkas and David Schnell formally departed June 30 to form Prospect Venture Partners, according to Brook Byers, a partner at Kleiner Perkins Caufield & Byers. Prospect will concentrate on life, sciences investments.

Dr. Barkas was reluctant to discuss fund-raising efforts, citing concerns about Securities and Exchange Commission regulations regarding marketing, but did confirm Prospect Venture Partners had begun fund raising “recently, very recently.” Mr. Byers said he thought the new fund would be targeted at $75 million. The new firm was operating out of temporary space in Palo Alto as Venture Capital Journal went to press and looking for a permanent office in the area, according to Dr. Barkas.

The departure doesn’t seem to have engendered hard feelings, and Mr. Byers expects to co-invest with Prospect Venture Partners. “These guys are guys we know,” he said, noting that Kleiner Perkins likes to know the strengths and weaknesses of potential co-investors. “Obviously, we’ve got that from them.” In fact, Mr. Byers said he’d already shown some potential deals to the Prospect Venture Partners team. Also, he said he introduced them to Merrill Lynch & Co.’s advising group in New York to help with the fund raising.

Mr. Byers acknowledged that the health-care field is well stocked with opportunities and that “this is a very good time to raise a fund.” “We’ve been talking about it for a year,” he said. “This has a lot to do with just how people want to spend their time.” Drs. Barkas and Schnell want their own industry-focused fund, as opposed to being part of a large, diversified fund, Mr. Byers explained.

He said Kleiner Perkins’s life sciences investing would not be altered by Drs. Barkas and Schnell leaving. He noted that while each partner is expected to do two deals a year, and he’d already done three. Led by Mr. Byers, the firm’s life sciences team also includes Joseph Lacob and Cynthia Healy. “We’ve got some creative ideas about the life sciences group here, but we’re not ready to talk about that yet,” said Mr. Byers.           –S.N.