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VC firm Highland repents, returns to Silicon Valley

Updated (see correction about Keith Benjamin below)

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Highland Capital Partners, a Mass. based venture capital firm that abandoned Silicon Valley in 2001 after the bubble burst, has returned -- just the latest sign of what seems to be a pick up in activity here.

The return is apparently not driven by the Web 2.0 fad, though. Corey Mulloy, the partner who is spearheading the effort, invests in medical technology. Highland is bringing over another person, and is looking to hire a venture partner and other personnel here, according to a piece in VentureWire (subscription required).

The firm expects to start investing from its seventh fund of $800 million.

Related note: Keith Benjamin, who opened the San Francisco partner of Highland Capital Partners during the Internet boom, but who was forced out in 2001, now has a blog, called SF Venture. Its another example of a VC who has been blogging for months without us even noticing. Benjamin is now investing at Levensohn Venture Partners in SF.

Update: Our apologies to Keith. As an investment banker at Robertson, he helped take eToys public, and that is how he got to know the Highland Capital folks who had invested in eToys. But he says he joined Highland in 1999, after the firm had made its initial decision to hold its eToy holdings (true, as an analyst, Keith had recommended the stock). eToys tanked earlier than most companies. But Keith says he wasn't even part of the decision later in 2000 when the firm decided again what to do with its eToys stock. So we are striking this: You may recall the story about Benjamin: He'd reportedly persuaded his more conservative Boston partners not to sell the firm's stake of about 10 percent eToys. The company was valued at $7.7 billion during the peak, but then the stock cratered. -- not good for Benjamin's rep at the time. He'd apparently convinced his firm to buy even more eToys stock.

Maybe that's why it took so long for Highland to return. This time, it looks less like a momentum play, which is a good thing. They're opening an office on Menlo Park's Sand Hill Road, not San Francisco. And Benjamin, who entered the VC world fresh from investment banking, now has some experience under his belt too -- also a good thing.


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Comments

I started to be active in the venture community at Robertson, where I was a frequent sponsor of venture investments through Robertson䴜s internal investment vehicle, Bayview Capital. In 1999, I joined Highland Capital Partners, a Boston-based venture capital firm, where I was a General Partner and opened the firm's San Francisco office. I led a number of investments at Highland, including Coremetrics. I joined Levensohn Venture partners in 2002.

Sandy Roberts on March 17, 2006 8:38 AM
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I thought the fool got canned...he did not mention it on his blog...

cody on March 17, 2006 8:40 AM
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eith joined LVP from Highland Capital Partners, a Boston-based venture capital firm, where he was a General Partner and opened the firm's San Francisco office. Keith led a number of investments at Highland, including Coremetrics.

TheMan on March 17, 2006 8:41 AM
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Folks, I've since updated the part about Benjamin Keith and eToys. Not sure who is making the scissored comments above, but it is worth pointing out that Keith invested in Coremetrics and at least three other companies at Highland. Coremetrics just raised more funding, and is so is still alive and apparently doing well. Three others include dot-com companies like Fatbrain and TheMan, and Keith apparently managed to sell them and get out without total losses. We don't know exactly how much he recouped, and he wouldn't tell us.

Matt Marshall on March 18, 2006 11:27 AM
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