If you’re an entrepreneur looking for VC funding, times have been better. The dour economy has caused many VCs to tighten the financing spigots and raise their standards.
But that’s only part of the story. The truth is that venture capital, like so many industries, is undergoing some major changes. Marc Andreessen, a veteran entrepreneur who is most widely recognized for helping create the Mosaic web browser and founding Netscape, is hoping his entrepreneurial prowess that has served him so well in creating startups can give him a leg up in the world of funding them.
His new VC firm, Andreessen Horowitz, is a collaboration with business partner Ben Horowitz. The duo has invested in 45 startups as angels over the years and currently serve on the boards of directors of a number of them. So it’s somewhat natural that Andreessen and Horowitz make it ‘official‘ with a firm of their own.
They’ll be starting with a decent amount of firepower: Andreessen Horowitz is launching with a $300m fund. While it’s hardly the biggest VC fund in the world, it’s not a bad amount, especially given the economy. And thanks to the prevalence of firms that have suddenly become far more risk adverse, there’s likely a lot that can be done with that type of cash.
In a post on his blog, Andreessen lays out Andreessen Horowitz’s ‘core principles‘ and provides some details about how the firm will operate. Of note:
- Andreessen and Horowitz will be the only general partners at the firm for the time being.
- The pair are willing to make investments ranging from $50,000 to $50m with various investment structures being acceptable.
- Andreessen Horowitz favors investments in companies with technical founders who intend to remain as CEO.
- Companies in Silicon Valley are preferable, although the firm will consider companies that are located elsewhere.
Given the cachet Andreessen has amongst many Valley entrepreneurs, there’s no doubt Andreessen Horowitz will have solid dealflow to start. Their focus on the founders, willingness to be flexible with deal structure and plan not to take a board seat on investments less than $5m will certainly won’t hurt either.
But there are still a lot of questions. Will Andreessen’s success as an entrepreneur help him make prescient investment decisions? Can a firm really build a workable portfolio with investments ranging in size from as little as $50,000 to as much as $50m? Is a focus on technical founders who want to stay at the helm of their companies really a smart strategy?
As an entrepreneur, Andreessen has been right more times than he’s been wrong. It will be fun to monitor his track record as an investor.
Photo credit: Joi via Flickr.