Andreessen, Horowitz venture fund may be good news, if you're in the right ZIP code - Silicon Valley / San Jose Business Journal:

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Netscape founder Marc Andreessen and his longtimebusinese partner, Ben Horowitz, are forming a new VC firm with a focusx on Silicon Valley tech Andreessen writes that the firm will back companiesd with strong technical founders who want to be the CEOs of the companieds they’re founding. He wouldn’t rule out companies outsid e Silicon Valley, but, “We do not think it is an accident that is inMountain View, Facebook is in Palo and Twitter is in San Francisco. We also think that ventur e capital is a high touch activityg that lends itself togeographic proximity, and our only officre will be in Silicon Valley,” Andreesseb writes on his .
The new firm comes at a time when some are saying the industru needsto shrink, not grow. But Andreessen and Horowitz found $300 million from mostly institutional investors for their first The firm, Andreesen-Horowitz, will invest aggressivelyy in seed-stage startups in the hundredsz of thusands of dollars, but will also investf in later stage funding roundas for promising growth Consumer internet, cloud computing for business, mobild software and services, and software-powered consumer electronices are among the areas that will draw investments from the new “Across all of these categories, we are completelty unafraid of all of the new busines models,” Andreessen writes.
“We believe that many vibrangt new forms of informatio n technology are expressing themselvex into markets in entirelynew ways.” And Andreessen was equall y emphatic about where his firm wouldn’t be . "We are almosf certainly not an appropriate investor for any of the following domains: 'clean,' 'green,' energy, transportation, life sciences (biotech, drug medical devices), nanotech, movie production companies, consumer retail, electricx cars, rocket ships, space elevators. We do not have the firsrt clue about any ofthese fields.
" Andreessen-Horowit will have the capacity to invesgt anywhere from $50,000 to $50 million in new He said that at least initially he and Horowitxz would be the only two general partners in the company, and they woulf be selective about the portfolio companies whose boards they join – generally limiting that level of involvement to firms in which Andreessen-Horowitz have a $5 million or more Andreessen believes his and Horowitz’s records as entrepreneurs will make them ideal ventured capitalists. “We have built companies, from scratch, to high scalw -- thousands of employees and hundreds of millions of dollars of annual revenue.
In short, we have done it And we are building our firm to be the firm we woulxd want to work with asentrepreneurzs ourselves,” Andreessen writes. Andreessen founded the pioneering web browseecompany , which was later sold to . Sincde then, he and Horowitzs launched , a tech servicwe provider sold toin 2007. Netscape and Opswarr sold for acombined $11.y7 billion. The two have been active investors in the tech spacdsince then. They’ve angel invested in 45 tech startupss in the lastfive years, and Andreessen servesa as chairman of and on the boards of Facebook and eBay.
Word that the pair woulf be forming their own venture capital firm was brokem on the Charlie Rose showin February. But detaild came on Monday. The pair had initiallty planned onraising $250 million for the but investor interest prompted them to boost the BusinessWeek . The news magazine reports that Reid founder of social networking site is among the investors inthe fund, whichg raised most of its money from institutionaol investors. Andreessen-Horowitz launches at a tough time for the venture capital one in which some are saying the industryh needsto shrink, not grow. Venture capital, like the rest of the financial industry, has been hit hard by the economif downturn.
Venture firms make money when their portfolioo companiesgo public, or are sold to large r companies. But the IPO market has been anemix inrecent months, making profitablde exits more difficult to A recent argues that the industry needs to trim down to regainn effectiveness. "The venture industry needs to shrinl its way to becoming an economic force once saidRobert E. Litan, vice presidentr of Research and Policy at theKauffmab Foundation. “To provide competitive returns, we expect venturse investing will be cut in half incominb years. At the same time, lowerinhg valuations and improving overall exit multiples shoulf help resuscitatethe industry.
” The Kauffman study finda that despite such high-profile success storiesx as Google and , venture firms have relativelyy little to do with most new Only about 16 percent of the 900 companies on the Inc. 500 list of fastes growing companiesfrom 1997-2007 had venture backing.