General Catalyst Co-Founder John Simon Joins Sigma Prime
Simon was a co-founder at Cambridge-based General Catalyst Partners, but announced in July that he was leaving the firm after 12 years. Simon also has served as an executive at several companies, including a founding role at UroMed Corporation.
As of this morning, Simon was still listed as a “managing director emeritus” on the General Catalyst website. His investments there covered a broad range, including mobile startups like Jumptap and Paydiant, biotechs like OvaScience and TearScience, and medical device companies such as DC Devices and iWalk.
Sigma Prime, as Scott Kirsner notes, is in the process of raising a new venture fund that could be worth $150 million. That’s quite a bit smaller than the $500 million that General Catalyst last raised, and Simon says that’s by design—he wanted to focus on early stage investments.
“This is the kind of stuff that I love the most, enjoy the most, am the best at—and also has produced wonderful results,” Simon says.
At first, after forming a vehicle for his own angel investing, Simon thought he might do what many early stage investors have done recently and raise a micro-VC type of fund to quarterback on his own.
They got to talking, and the idea of a solo fund went out the window.
“It’s really not the capital. It’s the size of the group,” Simon says. “At Sigma Prime, you’re talking about six investment professionals, four of which are managing directors, all in the same office focused on the same thing, same stage, same kinds of activity.”
Sigma Prime is an interesting story in its own right, having formed from the split of Sigma Partners into two separate firms on the East Coast and West Coast. Sigma Prime already has closed a portion of its $150 million fund and is investing out of that pool, with the possibility of rounding up the balance in the near future, Simon says.
“All of us at Sigma Prime have been part of bigger funds, bigger entities, half-billion-dollar funds with a lot more investing partners and so forth,” he says. “And we basically have said, `This is what we want to do.’”
And while General Catalyst’s investments were more spread out geographically, Simon says his work at Sigma Partners will be noticeably more concentrated in the Northeast. He also expects to focus on business and enterprise software, an area where Sigma has specialized.
“With mobile and big data and cloud-based architectures, you basically have $300 billion a year of IT spend that is going to be compeltely reallocted and reprioritized,” he says. “And a lot of it is going to go to startups that are offering innovative, cloud-based services.”