The firm created a buyouts arm after the 2000 market crash. Now, the strategy could differentiate it from other VC firms as another downturn emerges.
General partner Chelsea Stoner , pictured here with team member Gavin Tasker, says the market downturn could present Battery Ventures—unlike most other VC firms—with the chance to buy out more growth stage startups.As Battery Ventures closed in on its second decade as a firm in 2001, its partners congregated in Stowe, Vermont to ski.
“This is a ripe time for exactly that same deal type to happen,” says general partner Chelsea Stoner. “We’re already starting to see some companies that are really solid businesses but not able to raise money.” Unique to the market moment, however, the firm’s venture-oriented investors say they expect more of their growth stage investments to look like buyout deals as well. In December, Bessemer Venture Partners launched a similar growth buyouts practice, but otherwise, traditional venture firms have seldom explored this type of strategy.
“Valuations have had the most run-up over the last few years among growth stage businesses,” he says. “As that resets and companies need to think differently about their cost structure and raising capital, we may have an opportunity to go in and buy the majority of their businesses.”
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