VCs weigh in on Shervin Pishevar’s exit from Menlo Ventures

In his brief, 20-month tenure as a managing partner at Menlo Ventures, Shervin Pishevar did a lot of moving and shaking. He teamed with Lady Gaga’s manager on the Talent Fund, a $20 million micro-fund for seed-stage companies. And he put Menlo’s money into high-profile social startups like Uber and TaskRabbit.

But it’s all over now. Or almost all, anyway. As Kara Swisher first reported, Pishevar and Scott Stanford, who’s run Internet investment banking for Goldman Sachs, are starting a new outfit called Sherpa, which as I understand it will both incubate new startups and invest in them. Pishevar will remain connected to Menlo as something called a venture advisor; in my relatively limited experience, that’s a common way for a VC’s portfolio companies not to be left out in the cold when he or she leaves the firm.

Even though both sides are saying nice things about each other, I’d caught recent scuttlebutt that made me think some of Menlo’s other partners were growing weary of the media spotlight that followed Pishevar. Nothing, though, suggested a divorce was looming. It’s also possible that Pishevar simply chafed under the team structure of a traditional venture firm or that Menlo decided it wanted to hew more closely to its traditional focus on enterprise technology – its greatest hits include companies like Bay Networks, IronPort and LSI Logic.

What’s even less clear is just what this means for Menlo, reputation-wise.  A big deal was made when Menlo added Pishevar, an exceedingly well-connected serial entrepreneur and angel investor. The nearly 40-year-old firm had missed out on the social networking craze that was still in full effect when Pishevar signed on in June 2011. Once he joined the party, “They became way more relevant and were doing some important deals, albeit at really high follow-on prices,” said one VC I spoke to. (He asked not to be named because, well, VCs never like to slag each other on the record.)

A veteran at another venture firm, though, doubted that Pishevar’s defection would hurt Menlo. “They have a ton of cash under management” — $4 billion, in fact — “and a very solid discipline for late-stage investing,” this person said. Which, if you think about it, makes it all the more understandable that Pishevar would bail to do his own seed-stage firm.


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