Twitter Sacca raising 2nd fund for Internet startups

Chris Sacca, the former Google Inc. executive turned Twitter Inc. investor and venture capitalist, is seeking investors for a new fund focused on startups, two years after creating his debut fund. Lowercase Spur LP opened in late 2011 with Sacca’s own money and is now soliciting outside investors, according to a memo dated March 2012 and obtained by Bloomberg News. Sacca was talking to investors last year about raising as much as $50 million for the fund, said two people familiar with the matter, who declined to be named because the fundraising is private. The 39-page private placement memorandum includes a chart of 10 investments already made by Lowercase Spur, including music site Turntable.fm, mobile private-car service Uber Technologies Inc. and online marketing company FanBridge Inc. The Healdsburg, California-based fund has invested a total of $2.88 million, with about half of that going to Uber. The minimum commitment from each new investor is $250,000. The memo also said that the first fund, Lowercase I, is worth 5.3 times its original value and returned every dollar of contributed capital to the limited partners. Lowercase Spur is being established, in part, to provide additional capital to some companies in that fund. Sacca raised less than $10 million for the first fund in mid-2010. He aims to close the new one by month’s end, a person familiar with the matter said. ‘Anomalous Returns’ “Lowercase I currently has what we believe are eight to 10 outstanding companies that are likely to generate anomalous returns,” the memo said. As they raise more money, “we anticipate that Lowercase Spur will be able to participate in such follow-on financings where Lowercase I simply cannot due to its size, investment strategy and allocation model,” it said. Sacca declined to comment. Lowercase Spur will invest over the course of a decade and collect a 10 percent management fee over each of the first two years. The memo didn’t say how much money the fund is planning to raise. Sacca will also keep 25 percent of the fund’s net profits, with the rest going to the limited partners. Sacca, 36, was head of special initiatives at Mountain View, California-based Google until 2007, and previously was a lawyer at Fenwick & West LLP. Sacca was an early investor in microblogging service Twitter and runs a separate fund, with financing from JPMorgan Chase & Co., focused on buying Twitter shares.