TVC Capital Raises $115M, Keeps Focus on Software, Value Investing

San Diego-based TVC Capital, a small private equity firm that specializes in growth-stage investments in software companies, has closed its third investment fund with $115 million in capital commitments.

All of the firm’s existing institutional investors participated in the fund, TVC Capital III, along with three new investors, according to Jeb Spencer, a co-founder and managing partner. The new investors include Horsley Bridge Partners, a global fund-of-funds institutional investor based in San Francisco.

In a statement, Horsley Bridge managing director Lance Cottrill says, “We find TVC’s uniquely differentiated strategy, disciplined approach and proven ability to add value to their portfolio companies to be very compelling.”

Spencer says the fund was oversubscribed, and closed 90 days after TVC began fund-raising. “We could easily have raised a $150 million fund,” Spencer said yesterday. “But we have to stick to our philosophy and keep our fund size small. We want to be able to continue to invest in software companies with $3 [million] to $15 million in revenue.”

The firm will still have to expand its staff, and is looking to hire professionals experienced in software and growth equity investment, Spencer said.

The nine-year-old firm raised $75 million for its second growth equity fund in 2012, and currently has about $225 million under management.

TVC has so far realized three successful exits from its first fund: the sale of El Segundo, CA-based Accordent Technologies to Polycom; the sale of San Diego-based Del Mar DataTrac to Ellie Mae; and the sale of Seattle’s Mercent to CommerceHub, a Liberty Media subsidiary.

TVC’s second fund saw its first exit in October, when San Diego’s Anametrix was acquired by San Jose, CA-based Ensighten.

TVC says its investment philosophy emphasizing operational value creation and working “in the trenches” with software management teams to accelerate growth, maximize value, and position companies for a profitable exit.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.