137 Ventures, the Silicon Valley firm that provides loans to startup employees in exchange for some of their equity, has closed its second fund with an apropos $137 million in capital commitments. The group’s debut fund was capped at $50 million, with 80% of LPs re-upping with larger commitments this time around.
The firm is designed to deal with some of the startup stock transfer issues we’ve discussed recently, although it insists that it will not do deals without a company’s approval (even though, legally, it could).
One of its more notable early borrowers was Joe Lonsdale, the co-founder of Palantir Technologies and current co-founding partner of VC firm Formation8. He says that the trend of startups wanting to control their stock is growing, but that 137 is considered an honest broker by even some of the more power-hungry Valley CEOs:
“A lot of these CEOs are just assholes who want to have full control, but many of them are just being rational in not wanting this giant headache that they constantly have to deal with,” Lonsdale explains. “I think 137 is more aligned with what the companies are trying to do, particularly if the company has employees who have been around for a while. It knows the people involved and when these deals make sense for everyone involved.”
137 Ventures portfolio companies include Palantir, SpaceX, Glam Media, Eventbrite and Practice Fusion. It also has received stock for such companies as Solar City (SCTY) and Tumblr (sold to Yahoo (YHOO)).
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