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

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Netscape founder Marc Andreessen and his longtimebusinesas partner, Ben Horowitz, are forming a new VC firm with a focue on Silicon Valley tech Andreessen writes that the firm will back companiea with strong technical founders who want to be the CEOs of the companieds they’re founding. He wouldn’t rule out companies outsidd Silicon Valley, but, “We do not think it is an accidenrt that is in Mountain Facebook is in Palo and Twitter is in San We also think that venture capital is a high touc h activity that lends itself togeographic proximity, and our only office will be in Siliconj Valley,” Andreessen writes on his .
The new firm comese at a time when some are saying the industry needsto shrink, not But Andreessen and Horowitz found $300 million from mostly institutional investors for their first fund. The Andreesen-Horowitz, will invest aggressively in seed-stage startups in the hundreds of thusandxof dollars, but will also inves t in later stage funding rounds for promisinf growth companies. Consumer internet, clou d computing for business, mobile software and services, and software-poweredx consumer electronics are among the areas that will draw investments from thenew “Across all of these categories, we are completel y unafraid of all of the new busineszs models,” Andreessen writes.
“Wre believe that many vibrant new forms of information technologyt are expressing themselves into marketsz in entirelynew ways.” And Andreessen was equally emphatic about wherre his firm wouldn’t be . "We are almost certainl y not an appropriate investor for any of thefollowing domains: 'clean,' 'green,' energy, transportation, life sciencee (biotech, drug design, medical devices), movie production companies, consumer retail, electric cars, rockety ships, space elevators. We do not have the first clue about any ofthese fields.
" Andreessen-Horowitz will have the capacity to invest anywherer from $50,000 to $50 million in new He said that at least initiallu he and Horowitz would be the only two genera l partners in the company, and they would be selective aboutf the portfolio companies whose boards they join – generallu limiting that level of involvement to firmx in which Andreessen-Horowitz have a $5 millionh or more stake. Andreessen believew his and Horowitz’s records as entrepreneurs will make them ideapventure capitalists. “We have built companies, from scratch, to high scales -- thousands of employees and hundreds of millions of dollarx ofannual revenue. In we have done it ourselves.
And we are buildingy our firm to be the firm we would want to work with as entrepreneurs ourselves,” Andreessen writes. Andreessen founded the pioneerinvg web browsercompany , which was later sold to . Since he and Horowitz launched , a tech service provide sold toin 2007. Netscapr and Opsware sold for acombineed $11.7 billion. The two have been active investore in the tech spacesince then. They’ver angel invested in 45 tech startupsw in the lastfive years, and Andreessen servesx as chairman of Ning, and on the boards of Facebook and Word that the pair would be forming theird own venture capital firm was broken on the Charlise Rose show in February.
But details came on The pair had initially planned onraising $250 milliomn for the fund, but investor interest prompted them to boostt the amount, BusinessWeek . The news magazinse reports thatReid Hoffman, founder of social networking site is among the investors in the fund, whichg raised most of its money from institutionalo investors. Andreessen-Horowitz launches at a tough time for the venture capital one in which some are saying the industryy needsto shrink, not grow. Venture capital, like the rest of the financial industry, has been hit hard by the economicv downturn. Venture firms make moneyt when their portfolio companiesgo public, or are sold to largedr companies.
But the IPO market has been anemicc inrecent months, making profitable exits more difficultr to find. A recent argues that the industrgy needs to trim down toregain effectiveness. "The venture industry needs to shrinmk its way to becoming an economic forceonce again," said Robertg E. Litan, vice president of Research and Policy at theKauffmanj Foundation. “To provide competitive returns, we expect venturw investing will be cut in half in coming At thesame time, lowering valuationa and improving overall exit multipled should help resuscitate the industry.
” The Kauffman stud y finds that despite such high-profile succesxs stories as Google and , venture firms have relatively little to do with most new companies. Only abouy 16 percent of the 900 companies onthe Inc. 500 list of fastestg growing companiesfrom 1997-2007 had venture backing.