Andreesen Horowitz: New VC Focuses on Tech

"We believe that the product is the heart of any technology company," says serial entrepreneur Marc Andreessen in a Sunday blog post announcing the new $300 million venture capital fund he raised with partner Ben Horowitz known as Andreessen Horowitz.

Andreessen continues:

The company gets built around the product. Therefore, we believe it is critical that we as investors understand the product. We are ourselves computer scientists and information technologists by experience and training; therefore, we plan to focus on products in the domain of computer science and information technology.

Andreessen's entrepreneurial credits include founding Netscape Communications Corp., Opsware (bought by Hewlett-Packard Co. [NYSE:HPQ]) and private-label social networking service Ning. His angel investments include Digg Inc., Facebook Inc., LinkedIn Corp. and Twitter Inc.

Horowitz is a co-founder of Opsware who served as an executive at Netscape.

Andreessen, who plans to continue serving on the boards of Facebook and eBay Inc. (NASDAQ:EBAY) and as chairman of Ning, writes:

Between the two of us, Ben and I have started three companies directly, created many new products and services, run operating businesses at high levels of scale, angel invested in 45 tech startups in the last five years, and served on a broad cross-section of company boards with some of the best entrepreneurs and investors in the industry.

Like other first-time VC funds led by former entrepreneurs, Andreessen and Horowitz seem to have had an easy time raising money in this otherwise challenging climate. The initial target was reportedly $250 million.

Like August Capital Management LLC's recent $650 million fund -- the largest raised this year -- Andreessen Horowitz has the potential to do some very big deals, with investments expected to range from as little as $50,000 to as much as $50 million in a single company.

"We plan to aggressively participate in funding brand new startups with seed-stage investments that will often be in the hundreds of thousands of dollars," says Andreessen. "But we will also invest in venture stage and late stage rounds of high-growth companies."

Although there will be a wide range of investment sizes and stages, Andreessen Horowitz will focus on a more narrow range of sectors: consumer Internet, business Internet (cloud computing, "software as a service"), mobile software and services, software-powered consumer electronics, infrastructure and applications software, networking, storage, databases, and other back-end systems.

"Across all of these categories, we are completely unafraid of all of the new business models," blogs Andreessen. "We believe that many vibrant new forms of information technology are expressing themselves into markets in entirely new ways."

There's a long list of areas in which Andreessen Horowitz will not be participating, including cleantech, energy, transportation, life sciences, biotech, medical devices, nanotech, movie production, consumer retail, electric cars, rocket ships and space elevators.

"We do not have the first clue about any of these fields," quips Andreessen. - Mary Kathleen Flynn