July 6, 2009

Andreessen Looking For The Next Big Entrepreneur

Marc Andreessen, co-founder of Netscape Communications Corp. and Opsware Inc., is ready to take a stab a finding another entrepreneur to invest in.

He is starting a new career as a venture capitalist with his longtime business partner Ben Horowitz.

Andreessen Horowitz, their venture capital firm, opens Monday with a $300 million fund earmarked primarily for startups involved in the Internet, software, consumer gadget and data storage.

The two are planning on being able to connect with hard-driving entrepreneurs that are determined to shake up the status quo.

"We tend to be pro-megalomania," Andreessen said. "We are big fans of an inexperienced person who has great technology and wants to build a company while staying on as CEO."

Andreessen, who turns 38 on Thursday, changed the way people used the Internet by developing a graphical Web browser called Mosaic in the early 1990s and went on to co-found Netscape before he turned 25.

Later, once Netscape was sold to AOL for $10 billion in 1999, Andreessen had the audacity to start Opsware in a time that the dot-com enterprise started to collapse, in 2000.  Although Opsware suffered through some rough times, it eventually paid off by being sold to Hewlett-Packard Co. for $1.7 billion in 2007.

Horowitz, who is 43, played a key role in both Netscape and Opsware.

The past successes of those companies made it easier for Andreessen and Horowitz to obtain money for the venture capital industry.  With the stock market plummeting most of the last year, there have been few startups that have been able to find buyers or complete initial public offerings.  The adverse condition of the economy has made it difficult for start-up businesses to find investments, which has discouraged them from financing new ideas.

Andreessen and Horowitz are unfazed by this because they believe promising technology faces less competition during recessions.

Their message has resonated well with college endowments, wealthy individuals and other funds that are investors in Andreessen and Horowitz's new firm.

It has also helped that Andreessen and Horowitz have done good with personal investments since they struck it rich with Netscape.  Since Netscape they have invested in 45 startups, including Twitter Inc., LinkedIn Corp and Digg Inc.

Andreessen will still remain active in Ning Inc., although he is co-managing the new venture capital fund.  He has personally invested more than $10 million in Ning, which provides online communities for people with common interests.

Andressen and Horowitz expect to invest anywhere between $300,000 in incubating ideas to $15 million in companies that have been around for a long time.  They said that they would advise entrepreneurs when asked, but will not make their decisions for them.

"We have done it before so we know a lot about the things that can go wrong" for startups, Horowitz said.