BY EVELYN M. RUSLI
Chris Sacca is known in Silicon Valley for his Western-style button-down shirts and his early investments in start-up companies like Twitter.
But for big institutional investors, Mr. Sacca, 35, is becoming known as an important gatekeeper in meeting the demand for the private shares of fast-growing Internet companies.
His fund has already bought about $400 million worth of shares of Twitter over a number of months, giving it a stake of roughly 9 percent and implying a valuation of $4.2 billion to $4.5 billion for the microblogging site.
JPMorgan Chase and its Digital Growth Fund, a new $1.2 billion vehicle, is a major investor in Mr. Sacca’s fund, and it will indirectly own shares of Twitter as a result. JPMorgan is not directly negotiating with Twitter to acquire a stake in the company, said three people close to the matter, who spoke on the condition of anonymity because details of the deal were private.
Mr. Sacca has raised more than $1 billion for his fund, two of those people said. The investment fund, which opened last summer, is not yet closed and will have other institutional investors as well, these people said.
The JPMorgan investment in Mr. Sacca’s fund was reported on Monday by thetechnology news site TechCrunch. JPMorgan declined to comment.
With his deep ties in Silicon Valley, Mr. Sacca is a natural guide for JPMorgan as it tries to shore up its technology investments.
A Georgetown Law graduate, Mr. Sacca was a lawyer at Fenwick & West in Mountain View, Calif., before plunging into the start-up world. He held executive positions at Speedera Networks, and Google, where he led the wireless efforts and worked on mergers and acquisitions.
After his departure from the search giant in 2007, Mr. Sacca recast himself as an angel investor. He was one of the earliest investors in Twitter, taking part in a $5 million financing round in late 2007, with Union Square Ventures, Charles River Ventures and the investor Ron Conway.
Mr. Sacca was never on Twitter’s payroll, but he served as a crucial adviser during its formative years and worked closely with its early employees. His personal blog profile says he continues to act as an adviser.
Those connections proved valuable late last year, as Mr. Sacca’s fund began to buy large blocks of shares from Twitter stockholders.
The fund has been buying shares of Twitter from several early investors and current and former employees, including Evan Williams, a co-founder; Spark Capital; and Union Square Ventures. Many of Twitter’s late-stage investors, like T. Rowe Price, Benchmark Capital and Insight Venture Partners, have not sold their shares to Mr. Sacca’s fund, according to one of the people familiar with the matter.
Twitter declined to comment on Monday. The company, which now claims nearly 200 million registered users, was valued at $3.7 billion in December, during its last round of financing.
Although Twitter will be a crucial pillar in the fund’s portfolio, according to this person, Mr. Sacca is looking at a variety of Internet investments. His fund-holding company, Lowercase Capital, has already made dozens of bite-size investments — usually less than $500,000 — in Web companies. The group includes several start-ups with a social media bent, like Gowalla, a location-based social network; DailyBooth, a photo-sharing site; and Swipely, a site where users can share purchase decisions.
Several large banks and mutual funds, like Goldman Sachs, T. Rowe Price andMorgan Stanley, have acquired major stakes in popular Web companies at multibillion-dollar valuations.
Goldman Sachs raised $1.5 billion to invest in Facebook at a $50 billion valuation. That round, which closed in January, included $1 billion from Goldman clients outside the United States. As more institutional firms try to plow money into these fast-growing start-ups, deeply connected investors like Mr. Sacca seem well positioned to capitalize on the growing demand.
JPMorgan’s Digital Growth Fund has already raised $1.22 billion, according to a recent regulatory filing — well beyond the $500 million to $750 million the fund was expected to raise. JPMorgan plans to collect about $13 million in commissions.
Claire Cain Miller and Michael J. de la Merced contributed reporting.