Posts Tagged ‘Accel Partners’

Inside Marc Andreessen’s New Venture Capital Fund

July 4, 2009

Happy Fourth of July!

Let’s celebrate entrepreneurs and venture capitalists who embody economic freedom!

On that note, check out the story I wrote about Netscape cofounder Marc Andreesseen’s new $300 million VC fund. Bonus: a video of me blabbing about it with tech editor Peter Elstrom.

Here’s the top:

With the financial world in turmoil, this may seem like a terrible time to start a new venture capital firm. But not for Marc Andreessen, co-founder of Internet pioneer Netscape Communications, and business partner Ben Horowitz. The two Silicon Valley entrepreneurs just raised $300 million to launch the firm, dubbed Andreessen Horowitz, say several sources involved in the effort. The pair had originally planned to raise $250 million, but boosted the amount because of strong investor interest.

Andreessen and Horowitz are expected to publicly unveil their firm later this month and declined to comment. But sources say the duo raised most of the money from institutional investors, including Horsley Bridge Partners, a San Francisco firm that invests corporate and government pension-fund money in venture firms. Among the new firm’s other backers are prominent tech industry players including Reid Hoffman, founder of the social networking site LinkedIn, and Peter Thiel, former CEO of the payment service PayPal. “Marc is doing some innovative things,” says Hoffman, who confirmed his involvement. “I like the direction he is going.”

Click here to read the rest of the story.

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Startup to Watch: Knewton Raises $6 Million from Bessemer Venture Partners and Accel Partners

April 8, 2009

Yesterday, New York-based online education startup Knewton announced a big fundraising win with a $6 million B round.

Bessemer Ventures led the round and original investors Accel Partners, First Round Capital and angel investor Reid Hoffman put in some more money.

Knewton currently offers LSAT and GMAT prep courses online but the company is pursuing a much more ambitious vision. Its larger goal is to use its adaptive learning technology as a platform for online education that could be used by textbook publishers, schools, companies and other third parties. If the company pulls off this trick, it could be one hell of a business. After all, education is a multi-trillion industry.

“Education is the last of the information industries to move online,” says Knewton CEO Jose Ferreira, a former venture capitalist and derivatives trader at Goldman Sachs. “When it breaks, it breaks fast. And that’s going to happen in the next five years. All the education content will go online in the next 10 years. And textbooks will go away. The question is who is going to power that platform. It’s probably going to be one or two companies.”

Venture Capital Funding Enters Deep Freeze

January 20, 2009

It’s official: The venture capital market is freezing up. And don’t expect the market to warm up any time soon.

In the fourth quarter of 2008, venture capitalists raised only $3.37 billion, down a staggering 71% from the year-ago quarter, when VCs raised $11.67 billion, according to a January 20 release by Thomson Reuters and the National Venture Capital Association. This is the smallest amount of money raised since the second quarter of 2004, when VCs raised $3.3 billion.

The size of the average fund and the number of funds able to scare up capital is also rapidly shrinking. In the fourth quarter, 43 funds accounted for that $3.37 billion, down from 84 funds in the year-ago period. That is the smallest amount of funds raised since the third quarter of 2003, when 33 funds raised $1.8 billion.

The shrinking amount of capital means that fewer new companies will get financing, and that older startups without market traction are likely to wither away.

“With some notable exceptions, we can expect this slower pace to continue well into 2009,” said Mark Heesen, president of the NVCA in the press release.

After years of waiting for an industry shakeout that never happened, many VCs now expect the industry to shrink significantly since some institutional investors are pulling back from the venture capital asset class. “There are likely to be fewer firms over the next few years,” says Ira Ehrenpreis, general partner with Technology Partners, a firm based in Palo Alto, CA. “And that’s a good thing. A pruned tree will be healthier.” Ehrenpreis believes the industry could shrink by as much as 20%.

Another silver lining: The largest and most successful VC firms continue to be able to raise large war chests. Two of the three largest funds raised in the fourth quarter were by Accel Partners, a well-established firm that has invested in Facebook, JBoss, MetroPCs and many other prominent startups.

Accel raised an Accel Growth Fund with $480 million to invest in more mature new companies. It also raised Accel London III with $525 million to invest in young European startups.

How Much Money Has Facebook Raised?

May 10, 2008

There’s been a number of differing estimates about how much money Facebook has raised. TechCrunch pegs it at $493 million.

But here’s what Facebook CFO Gideon Yu told me: Facebook has had 4 rounds of equity capital financing and two rounds of debt financing. Here are its investors:

Microsoft: $240 million
Li Ka-shing: $120 million
Group of individual investors: $15 million

Before that Yu says Facebook raised another $37.5 million from a “B” round venture investment from Accel Partners and a “C” round investment from Greylock Partners and Meritech Capital Partners.

$12.5 million came from Accel Partners in May 2005. And in April 2006 $25 million came from Greylock Partners, Meritech Capital Partners and Facebook’s existing investors Accel Partners and Peter Thiel also participated. Lastly, published reports have said that in late 2004 Peter Thiel invested $500,000 in angel money in Facebook.

That comes out to a grand total of $413 million. Add in the $100 million it got from TriplePoint at that brings you to $513 million. But that still does not include the first round of debt financing. I don’t know how much that was for.