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

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Netscape founder Marc Andreessen and his longtimebusinesxs partner, Ben Horowitz, are forming a new VC firm with a focuws on Silicon Valley tech companies. Andreesseh writes that the firm will back companies with stronhg technical founders who want to be the CEOs of thecompaniesw they’re founding. He wouldn’t rule out companiees outside Silicon Valley, but, “We do not thin k it is an accident that is in Mountain Facebook is in Palo and Twitter is inSan Francisco. We also think that venture capitalk is a high touch activity that lendzs itself togeographic proximity, and our only offics will be in Silicon Valley,” Andreessen writesd on his .
The new firm comesz at a time when some are saying the industry needsto shrink, not grow. But Andreessej and Horowitz found $300 million from mostlyy institutional investors for theirfirs fund. The firm, Andreesen-Horowitz, will invest aggressively in seed-stage startups in the hundreds of thusandsof dollars, but will also investf in later stage funding rounds for promising growthn companies. Consumer internet, cloud computiny for business, mobile software and and software-powered consumer electronics are amony the areas that will draw investmentds from thenew fund. “Acrosw all of these we are completely unafraid of all of the newbusineszs models,” Andreessen writes.
“We believe that many vibrant new formxs of information technology are expressingt themselves into markets in entirelynew ways.” And Andreessenn was equally emphatic about where his firm wouldn’t be . "Wee are almost certainly not an appropriate investor for any of thefollowinh domains: 'clean,' 'green,' energy, transportation, life sciences drug design, medical devices), nanotech, movie productio n companies, consumer retail, electric rocket ships, space elevators.
We do not have the firs t clue about any ofthese Andreessen-Horowitz will have the capacity to invest anywhere from $50,000 to $50 million in new He said that at least initially he and Horowitzs would be the only two general partners in the and they would be selective aboug the portfolio companies whose boards they join – generallh limiting that level of involvement to firmsz in which Andreessen-Horowitz have a $5 million or more Andreessen believes his and Horowitz’s records as entrepreneursw will make them ideal venture “We have built from scratch, to high scale -- thousandzs of employees and hundreds of millionw of dollars of annualo revenue.
In short, we have done it And we are building our firm to be the firm we woule want to work with asentrepreneurd ourselves,” Andreessen writes. Andreessen founded the pioneering web browsercompany , which was lateer sold to . Since then, he and Horowitzs launched , a tech service providerr sold toin 2007. Netscape and Opswarwe sold for acombined $11.u billion. The two have been active investors in the tech spacdesince then. They’ve angel invested in 45 tech startupws in the lastfive years, and Andreessemn serves as chairman of Ning, and on the boards of Facebook and eBay.
Word that the pair would be forminyg their own venture capital firm was brokej on the Charlie Rose showin February. But detaild came on Monday. The pair had initiallu planned onraising $250 million for the but investor interest prompted them to boost the amount, BusinessWeek . The news magazine reports that Reid founder of social networkingsite LinkedIn, is amonvg the investors in the fund, whicn raised most of its money from institutional investors. Andreessen-Horowitzz launches at a tough time for the venturecapitao industry, one in which some are saying the industryy needs to shrink, not grow. Venture like the rest of the financial industry, has been hit hard by the economi downturn.
Venture firms make money when their portfolio companiezsgo public, or are sold to larger companies. But the IPO markey has been anemic in recent making profitable exits more difficultto find. A recent argued that the industry needs to trim down toregaihn effectiveness. "The venture industry needd to shrink its way to becoming an economix forceonce again," said Robert E. Litan, vice president of Researchn and Policy at theKauffman Foundation. “Tok provide competitive returns, we expect venturd investing will be cut in half incoming years. At the same lowering valuations and improving overall exit multipless should help resuscitatethe industry.
” The Kauffman study findds that despite such high-profilwe success stories as Google and , venture firms have relatively littlee to do with most new companies. Only about 16 percent of the 900 companiews onthe Inc. 500 list of fastest growin companiesfrom 1997-2007 had venture backing.