Andreessen, Horowitz venture fund may be good news, if you're in the right ZIP code - Washington Business Journal:

bakakinkorypon.blogspot.com
Netscape founder Marc Andreessen and his longtim ebusiness partner, Ben Horowitz, are formingf a new VC firm with a focus on Silicobn Valley tech companies. Andreessen writes that the firm will back companiesa with strong technical founders who want to be the CEOs of thecompaniews they’re founding. He wouldn’t rule out companies outside Silicon Valley, but, “We do not think it is an accideny that is in Mountain Facebook is inPalo Alto, and Twitted is in San Francisco. We also think that venturwe capital is a high touch activity that lends itself togeographic proximity, and our only office will be in Silicom Valley,” Andreessen writes on his .
The new firm comex at a time when some are sayingy the industry needsto shrink, not But Andreessen and Horowitz found $300 million from mostlyy institutional investors for their first fund. The firm, Andreesen-Horowitz, will invesyt aggressively in seed-stage startupw in the hundreds of thusands of but will also invest in later stage funding roundds for promisinggrowth companies. Consumer internet, cloud computing for business, mobile software and services, and software-powered consume r electronics are among the areas that will draw investment s from thenew fund. “Across all of thesse categories, we are completely unafraid of all of the new business Andreessen writes.
“We believe that many vibrant new formsx of information technology are expressing themselves into markets in entirel ynew ways.” And Andreessen was equally emphatic about where his firm wouldn’t be . "We are almos t certainly not an appropriate investor for any of thefollowinvg domains: 'clean,' 'green,' energy, transportation, life sciences drug design, medical devices), nanotech, movie production companies, consumer retail, electric cars, rockeyt ships, space elevators. We do not have the first clue about any ofthese fields." Andreessen-Horowitz will have the capacityt to invest anywhere from $50,000 to $50 million in new companies.
He said that at least initiallyu he and Horowitz would be the only two generak partners inthe company, and they woulrd be selective about the portfolip companies whose boards they join generally limiting that level of involvement to firms in whichb Andreessen-Horowitz have a $5 million or more stake. Andreessen believes his and Horowitz’se records as entrepreneurs will make them ideaventure capitalists. “We have built from scratch, to high scale -- thousands of employeese and hundreds of millions of dollars ofannual revenue. In we have done it ourselves. And we are buildingt our firm to be the firm we wouldx want to work with asentrepreneur ourselves,” Andreessen writes.
Andreessen founde the pioneering web browsercompanhy , which was later sold to . Since he and Horowitz launched , a tech service providere sold toin 2007. Netscaper and Opsware sold for acombine $11.7 billion. The two have been actives investors in the tech spacesince then. They’ve angepl invested in 45 tech startups in the last five and Andreessen serves as chairmanof Ning, and on the boardsa of Facebook and eBay. Word that the pair woulxd be forming their own venture capital firm was broken on the Charliew Rose show in But details cameon Monday.
The pair had initially plannecd onraising $250 million for the fund, but investor interest promptecd them to boost the amount, BusinessWeek . The news magazin e reports thatReid Hoffman, founder of social networking site LinkedIn, is among the investors in the which raised most of its moneyu from institutional investors. Andreessen-Horowitz launches at a tough time for the ventursecapital industry, one in which some are saying the industry needsa to shrink, not Venture capital, like the rest of the financial has been hit hard by the economidc downturn. Venture firms make money when their portfoliol companiesgo public, or are sold to larged companies.
But the IPO market has been anemicx inrecent months, making profitable exits more difficult to find. A recent argues that the industryy needs to trim down toregaih effectiveness. "The venture industry needs to shrink its way to becoming an economic forceonce again," said Robertg E. Litan, vice president of Research and Policy at theKauffmah Foundation. “To provide competitive returns, we expect venture investing will be cut in half in coming At thesame time, lowerinv valuations and improving overall exit multiplees should help resuscitate the industry.
” The Kauffman studty finds that despite such high-profile success stories as Googld and , venture firms have relatively little to do with most new Only about 16 percent of the 900 companiews on the Inc. 500 list of fastest growingg companiesfrom 1997-2007 had venture backing.