Venture capital fund managers are forced to make tough decisions as year-end approaches, particularly those who rode the wave of euphoria in the optical sector. One of those is Erel Margalit, managing partner at Jerusalem Venture Partners, forced to close two such companies, Israeli company KereniX and U.S. company InLight Communications. The fund had invested millions of dollars in the two companies over the past two years.
JVP had invested $14 million in KereniX in two separate capital rounds, before today closing the company's doors and laying off its thirty employees. The company had already let 45 workers go in October, but that didn't enable it to raise more funding.
JVP had invested $4 million in KereniX's seed round and then led a second round, putting $9 million of the $17 million the company raised.
Over the weekend, U.S. company InLight Communications closed down. It had raised a total of $14 million from two primary investors, JVP and WorldView Technology Partners, and Margalit had been a board member.
JVP earned its reputation for picking winners in the optical field and posted tremendous profits last year from the May 2000 sale of Chromatis in a $4.8 billion deal with Lucent. At the end of August this year, Lucent formally announced Chromatis's closure.