Morgenthaler is one of the oldest

private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a ty ...

investment firms in the US investing through both

venture capital Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...

and

leverage buyout A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loan ...

transactions. Morgenthaler operates two connected private equity businesses:Robin Bellas (partner at Morgenthaler Ventures)
Lecture to Stanford University Entrepreneurship Students
2004-10-06 * Morgenthaler Ventures – venture capital business focused on life sciences and information technology investments * Morgenthaler Partners – buyout business focused on

management buyout A management buyout (MBO) is a form of acquisition in which a company's existing managers acquire a large part, or all, of the company, whether from a parent company or individual. Management-, and/or leveraged buyout became noted phenomena of 1 ...

leveraged recapitalization In corporate finance, a leveraged recapitalization is a change of the company's capital structure, usually substitution of debt for equity. Overview Such recapitalizations are executed via issuing bonds to raise money and using the proceeds to bu ...

s and leveraged

rollup A rollup (also "roll-up" or "roll up") is a process used by investors (commonly private equity firms) where multiple small companies in the same market are acquired and merged. The principal aim of a rollup is to reduce costs through economies o ...

s. The firm which was founded by David Morgenthaler in 1968, is based in

Cleveland Cleveland ( ), officially the City of Cleveland, is a city in the U.S. state of Ohio and the county seat of Cuyahoga County. Located in the northeastern part of the state, it is situated along the southern shore of Lake Erie, across the U.S. ...

with offices in Menlo Park, California,

Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...

, and

Boulder, Colorado Boulder is a home rule city that is the county seat and most populous municipality of Boulder County, Colorado, United States. The city population was 108,250 at the 2020 United States census, making it the 12th most populous city in Color ...

History

David Morgenthaler David Turner Morgenthaler (August 5, 1919 – June 17, 2016) was an American businessman who founded the venture capital firm Morgenthaler Ventures. He was also instrumental in helping change the U.S. capital gains tax rate from 49% to 28% in 197 ...

founded the firm in 1968 after a career as an operating executive. From 1957 until 1968, Morgenthaler was CEO of Foseco, Inc., a manufacturer of

specialty chemicals Speciality chemicals (also called specialties or effect chemicals) are particular chemical products which provide a wide variety of effects on which many other industry sectors rely. Some of the categories of speciality chemicals are adhesives, agr ...

owned by early venture capital firm J.H. Whitney & Co. After selling his venture-backed business to an international company, Morgenthaler decided to pursue

investing on his own.

David Morgenthaler

In addition to his role in building a nationally focused venture capital firm, Morgenthaler also took a leadership role in establishing the legitimacy and potential of the nascent venture capital industry. He served from 1977 to 1979 as the President and then Chairman of the National Venture Capital Association (NVCA). During Morgenthaler's tenure at NVCA, he was called to testify before Congress in support of the capital gains tax reduction enacted in 1978. He was also involved in changing the ERISA legislation in 1979, allowing for pension funds to invest in private equity for the first time. ''(See also: Early history of private equity: Regulatory and tax changes) Morgenthaler was awarded the first National Venture Capital Lifetime Achievement Award in 1998 for his role in the emergence of the venture capital industry. Morgenthaler was inducted into the

Private Equity Analyst ''Private Equity Analyst'' is a newsletter that since 1988 has provided news and information about the private-equity market and its investment specialities, including venture capital, leveraged buyouts, mezzanine investing and turnarounds. Based ...

's Venture Capital Hall of Fame. Earlier in his career, Morgenthaler was a member of the management team of several young growth companies. He received both a BS and a MS degree in mechanical engineering from the

Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the ...

in 1941. Morgenthaler died in June 2016, at the age of 96. He worked up until the very end, with his son noting that he was testing an app from his hospital bed. "At age 96, almost 97, who does that?" his son said.

Investment funds

Since the 1980s, when Morgenthaler began raising

private equity fund A private equity fund (abbreviated as PE fund) is a collective investment scheme used for making investments in various equity (and to a lesser extent debt) securities according to one of the investment strategies associated with private equity ...

s from

institutional investors An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked co ...

in the early 1980s, the firm has raised over $2.8 billion of investor commitments. * 1985 - Morgenthaler Venture Partners II - $ 30m * 1989 - Morgenthaler Venture Partners III - $ 65m * 1995 - Morgenthaler Venture Partners IV - $ 135m * 1998 - Morgenthaler Venture Partners V - $ 300m * 2000 - Morgenthaler Venture Partners VI - $ 575m * 2001 - Morgenthaler Venture Partners VII - $ 850m * 2005 - Morgenthaler Venture Partners VIII - $ 450m * 2008 - Morgenthaler Ventures IX - $ 400m+ Historically, Morgenthaler funds have made both

and

leveraged buyout A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loan ...

investments out of the same fund. In November 2008, Morgenthaler Ventures exceeded its fundraising goal and closed its ninth fund (Morgenthaler Venture Partners IX) at slightly more than $400 million. MVP IX is the first Morgenthaler fund to focus solely on venture capital investments. By comparison, Morgenthaler Ventures was allocated approximately $315 million to invest in the previous fund. In August 2013, General Partners Gary Little, Rebecca Lynn, and Gary Morgenthaler formed a new and separate firm called

Canvas Venture Fund Canvas is an extremely durable plain-woven fabric used for making sails, tents, marquees, backpacks, shelters, as a support for oil painting and for other items for which sturdiness is required, as well as in such fashion objects as handbag ...

with an inaugural $175M early-stage IT-only fund. These three general partners continue to serve on the boards of their Morgenthaler portfolio companies, including Lending Club (the fourth largest Internet IPO since 2001 behind Facebook, Twitter and Google), MuleSoft, Evernote, Doximity, etc. They were later joined by Paul Hsiao, a 10-year partner at NEA, in May 2014. Canvas was named the No.1 "VC Firm to Watch" by Forbes on its 2015 Midas List.

References

External links

Morgenthaler
(company website) {{Venture capital firms Private equity firms of the United States Venture capital firms of the United States Financial services companies established in 1968 Companies based in Cleveland 1968 establishments in Ohio

History

David Morgenthaler

Investment funds

References

Further reading

External links