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Summary:

Netscape co-founder Marc Andreessen and former Opsware exec Ben Horowitz are looking to raise $250 million for their early-stage fund, which…

Netscape co-founder Marc Andreessen and former Opsware exec Ben Horowitz are looking to raise $250 million for their early-stage fund, which focuses on seed bets in the range of $500,000 to $1 million, according to peHUB. Since it’s hard to put that much money to work in such small investments, peHub expects the fund to invest in larger follow-on first rounds with some of its portfolio companies,

Some VCs and fund LP investors question whether the two will be able to reach their goal, but even getting close would make their fund very large for an early-stage investor. Andreessen and Horowitz say they do not plan to take board seats at their portfolio companies during the early seed rounds.

Andreessen announced in February 2009 that he and Horowitz were starting a VC fund focused on seed bets, citing the fact that many startups only need $500,000 to $1 million to bring their product to market – not a ton more than the $100,000 investments they typically made out of their own pockets at the time. In March, Spark Capital announced it was launching its own seed fund – focused on bets around $250,000 called Start@Spark, which followed an investment in angel investor Y Combinator by Sequoia Capital just a week earlier.

Since selling Netscape to AOL (NYSE: TWX) for $4.2 billion million in 1998, Andreessen has been an active investor – getting in early in such buzzy startups as Digg, Twitter and Yelp.

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  1. Rory – Believe that should read $4.2 *billion*…

  2. That should indeed read 4.2 BILLION, not million.

  3. What will be interesting to see is whether this kind of ready, shoot, aim approach to venture investing will play out. In contrast to most VCs (or my perception of their work), both of them won't be taking board seats and just buy some time to see which amount of their investments make it to real success (i.e. $$$).

    If you are a promising entrepreneur, what will your incentive be to go to them instead of some other VC who could provide more guidance? Will it lead to adverse selection due to them financing more start-ups with less oversight and perhaps fewer due diligence up-front?

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