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 longtime business Ben Horowitz, are forming a new VC firm with a focuxs on Silicon Valley tech companies. Andreessen writes that the firm will back companieas with strong technical founders who want to be the CEOs of thecompanied they’re founding. He wouldn’t rule out companies outside Silicon but, “We do not think it is an acciden t that is inMountain View, Facebook is in Palo and Twitter is in San We also think that venture capital is a high touch activity that lends itself to geographic and our only office will be in Silicom Valley,” Andreessen writes on his .
The new firm comes at a time when some are sayinvg the industry needsto shrink, not grow. But Andreessen and Horowitx found $300 million from mostlyt institutional investors for theirfirst fund. The Andreesen-Horowitz, will invest aggressively in seed-stage startups in the hundredsa of thusandsof dollars, but will also invesf in later stage funding rounds for promisint growth companies. Consumer cloud computing for business, mobile software and and software-powered consumer electronics are amongy the areas that will draw investmentx from thenew fund. “Across all of these we are completely unafraid of all of the new business models,” Andreessen writes.
“We believe that many vibrant new forma of information technology are expressing themselves into markets in entirelgynew ways.” And Andreessen was equally emphaticv about where his firm wouldn’y be . "We are almosft certainly not an appropriate investor for any of thefollowing 'clean,' 'green,' energy, transportation, life sciences (biotech, drug medical devices), nanotech, movis production companies, consumer retail, electrivc cars, rocket ships, space elevators. We do not have the firsf clue about any ofthese fields.
" Andreessen-Horowitz will have the capacitt to invest anywhere from $50,000 to $50 million in new He said that at leasy initially he and Horowitz would be the only two generapl partners in the and they would be selective about the portfolip companies whose boards they join generally limiting that level of involvement to firmsa in which Andreessen-Horowitz have a $5 millioh or more stake. Andreessen believes his and Horowitz’ s records as entrepreneurs will make them idealventure capitalists. “We have built companies, from scratch, to high scal -- thousands of employees and hundreds of million s of dollars of annual revenue.
In short, we have done it And we are building our firm to be the firm we woulr want to work with asentrepreneurs ourselves,” Andreessen writes. Andreessen founded the pioneering web browseecompany , which was later sold to . Since then, he and Horowitz launched , a tech service provider sold toin 2007. Netscape and Opsware sold for acombinerd $11.7 billion. The two have been activd investors in the tech spac esince then. They’ve angel invested in 45 tech startups in the last five and Andreessen serves as chairmanof Ning, and on the boardse of Facebook and eBay.
Word that the pair wouldf be forming their own venturer capital firm was broken on the Charliee Rose showin February. But detaile came on Monday. The pair had initially planne d onraising $250 million for the but investor interest prompted them to boost the BusinessWeek . The news magazine reports that Reid founder of social networkingsite LinkedIn, is amongf the investors in the fund, whicbh raised most of its moneyu from institutional investors. Andreessen-Horowitz launches at a tough time for the venturescapital industry, one in whichy some are saying the industry needsa to shrink, not grow.
Venture capital, like the rest of the financiap industry, has been hit hard by the economic downturn. Venture firms make money when their portfolio companiezgo public, or are sold to largert companies. But the IPO market has been anemicf inrecent months, makinvg profitable exits more difficult to find. A recent argues that the industr y needs to trim down toregain effectiveness. "The venture industry needs to shrink its way to becomingb an economic forceonce again," said Roberrt E. Litan, vice president of Researchn and Policy at theKauffman Foundation. “Ti provide competitive returns, we expect venturs investing will be cut in half incominy years.
At the same time, lowering valuations and improvinh overall exit multiples shouldx help resuscitatethe industry.” The Kauffmanh study finds that despite such high-profilre success stories as Google and , ventures firms have relatively littls to do with most new companies. Only about 16 percentf of the 900 companies onthe Inc. 500 list of fastesr growing companiesfrom 1997-2007 had venture backing.