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

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Netscape founder Marc Andreessen and his longtime business Ben Horowitz, are forming a new VC firm with a focus on Silicon Valley tech companies. Andreessen writes that the firm will back companiea with strong technical founders who want to be the CEOs of thecompaniezs they’re founding. He wouldn’t rule out companies outside Silicob Valley, but, “We do not thini it is an accident that is in Mountain Facebook is inPalo Alto, and Twittere is in San Francisco. We also think that ventures capital is a high touch activity that lendsd itself togeographic proximity, and our only officee will be in Silicon Valley,” Andreesse n writes on his .
The new firm come s at a time when some are saying the industry needato shrink, not grow. But Andreessen and Horowitz founfd $300 million from mostly institutional investors for theidrfirst fund. The firm, Andreesen-Horowitz, will invesf aggressively in seed-stage startups in the hundredss of thusandsof dollars, but will also invesg in later stage funding rounds for promisingh growth companies. Consumer cloud computing for business, mobile software and services, and software-powered consumer electronics are among the areads that will draw investmentsz from thenew fund. “Acrossd all of these categories, we are completelyt unafraid of all of the new business Andreessen writes.
“We believe that many vibrant new formss of information technology are expressin g themselves into markets in entirelynew ways.” And Andreessen was equally emphatic about wher his firm wouldn’t be . "Wer are almost certainly not an appropriate investorf for any of thefollowing domains: 'clean,' 'green,' transportation, life sciences drug design, medical devices), nanotech, movid production companies, consumer retail, electric rocket ships, space We do not have the firstf clue about any of these fields.
" Andreessen-Horowitz will have the capacitg to invest anywhere from $50,000 to $50 million in new He said that at least initially he and Horowita would be the only two generalk partners in the company, and they woulds be selective about the portfolio companies whose boarde they join – generally limiting that level of involvement to firms in which Andreessen-Horowitz have a $5 millionb or more stake. Andreessen believews his and Horowitz’s records as entrepreneurs will make them idealkventure capitalists. “We have built from scratch, to high scale -- thousands of employeeas and hundreds of millions of dollars ofannuaol revenue.
In short, we have done it And we are building our firm to be the firm we woul d want to work with asentrepreneurz ourselves,” Andreessen writes. Andreessen foundex the pioneering web browseercompany , which was later sold to . Sincew then, he and Horowitz launche d , a tech service provider sold toin 2007. Netscapde and Opsware sold for acombinedx $11.7 billion. The two have been active investorx in the tech spacesince then. They’vw angel invested in 45 tech startups in the last five and Andreessen serves as chairman of and on the boards of Facebookand eBay. Word that the pair woulde be forming their own venture capitakl firm was broken on the Charli Rose showin February.
But details came on The pair had initially planned onraisinh $250 million for the fund, but investor interesy prompted them to boostr the amount, BusinessWeek . The news magazine reports thatReid Hoffman, founded of social networking site LinkedIn, is among the investorsx in the fund, which raisecd most of its money from institutional investors. Andreessen-Horowitz launchews at a tough time for the venturwcapital industry, one in which some are saying the industryt needs to shrink, not grow. Venture capital, like the rest of the financialk industry, has been hit hard by the economic Venture firms make money when their portfoliok companiesgo public, or are sold to larget companies.
But the IPO market has been anemic inrecentf months, making profitable exits more difficult to find. A recen argues that the industry needzs to trim down toregain effectiveness. "Th venture industry needs to shrinki its way to becoming an economic forceonce again," said Robert E. Litan, vice president of Researcy and Policy at theKauffman Foundation. “To provide competitive we expect venture investing will be cut in half incomintg years.
At the same lowering valuations and improvinhg overall exit multiples should help resuscitate the The Kauffman study finds that despitwsuch high-profile success stories as Google and , ventur e firms have relatively littlew to do with most new companies. Only abouf 16 percent of the 900 companies onthe Inc. 500 list of fastesf growing companiesfrom 1997-2007 had venturs backing.