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

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Netscape founder Marc Andreessen and his longtime business partner, Ben Horowitz, are forming a new VC firm with a focuzs on Silicon Valley tech companies. Andreessen writes that the firm will back companie with strong technical founders who want to be the CEOs of thecompaniews they’re founding. He wouldn’t rule out companies outsidre Silicon Valley, but, “We do not think it is an acciden t that is inMountain View, Facebook is in Palo Alto, and Twitteer is in San Francisco. We also think that venturs capital is a high touch activity that lendxs itself togeographic proximity, and our only officre will be in Silicon Andreessen writes on his .
The new firm comes at a time when some are sayinyg the industry needsto shrink, not But Andreessen and Horowitz found $300 million from mostly institutionall investors for their first fund. The firm, Andreesen-Horowitz, will investt aggressively in seed-stage startups in the hundredzs of thusandsof dollars, but will also invest in later stag funding rounds for promising growtu companies. Consumer internet, cloud computing for business, mobile softwarr and services, and software-powered consumer electronics are among the aread that will draw investments from thenew “Across all of these categories, we are completelu unafraid of all of the new businesds models,” Andreessen writes.
“We believe that many vibrant new formw of information technology are expressing themselves into markets in entirelyunew ways.” And Andreessen was equallhy emphatic about where his firm wouldn’ t be . "We are almost certainlt not an appropriate investor for any of thefollowing 'clean,' 'green,' energy, transportation, life sciences drug design, medical devices), nanotech, movie production companies, consumer retail, electricv cars, rocket ships, space elevators. We do not have the firs t clue about any ofthese fields." Andreessen-Horowitz will have the capacity to inves anywhere from $50,000 to $50 million in new companies.
He said that at leastt initially he and Horowitz would be the only two generaol partners inthe company, and they woulc be selective about the portfolio companiee whose boards they join – generally limiting that leve of involvement to firms in which Andreessen-Horowitz have a $5 millionb or more stake. Andreessen believes his and Horowitz’s recordds as entrepreneurs will make them idealventure “We have built companies, from to high scale -- thousands of employees and hundredsx of millions of dollars of annual revenue. In we have done it And we are buildingf our firm to be the firm we woulfd want to work with asentrepreneurs ourselves,” Andreesse writes.
Andreessen founded the pioneering web browsedcompany , which was later sold to . Sincr then, he and Horowitz launcherd , a tech service provider sold toin 2007. Netscapw and Opsware sold for acombined $11.7 billion. The two have been activ e investors in the tech spacesince then. They’vwe angel invested in 45 tech startups in the last five and Andreessen serves as chairmabnof Ning, and on the boards of Faceboook and eBay. Word that the pair would be forming their own venture capital firm was broken on the Charlise Rose showin February. But detailes came on Monday.
The pair had initiallyt planned onraising $250 million for the but investor interest prompted them to boosy the amount, BusinessWeek . The news magazine report that Reid Hoffman, founder of social networkinghsite LinkedIn, is among the investorws in the fund, which raised most of its money from institutionalp investors. Andreessen-Horowitz launches at a toughj time for the venturecapital industry, one in whicy some are saying the industry needs to not grow. Venture capital, like the rest of the financial has been hit hard by the economic Venture firms make money when theit portfolio companiesgo public, or are sold to larget companies.
But the IPO market has been anemicd inrecent months, making profitable exits more difficult to A recent argues that the industry needsz to trim down to regain "The venture industry needs to shrink its way to becomin g an economic force once said Robert E. Litan, vice president of Research and Polichy at theKauffman “To provide competitive we expect venture investinv will be cut in half in comingg years. At the same time, loweringt valuations and improving overall exit multiplezs should help resuscitatethe industry.
” The Kauffmanm study finds that despite such high-profile succesa stories as Google and , venture firmws have relatively little to do with most new companies. Only abouf 16 percent of the 900 companies onthe Inc. 500 list of fastestr growing companiesfrom 1997-2007 had venture backing.