Netscape's Andreessen and Horowitz form VC fund

By David Lawsky

SAN FRANCISCO (Reuters) - Well-known Internet entrepreneurs Mark Andreessen and Ben Horowitz have raised $300 million (186 million pounds) for a new venture capital fund, declaring they plan to avoid the danger of forcing start-up companies to make money too soon.

Shunning a quick investment return may sound counterintuitive at a time when other venture capitalists are scratching for cash or being forced to shut down, but Andreessen and Horowitz beg to differ.

They point to dozens of start-ups they had a hand in -- but more important for fundraising may be Andreessen's fame as founder of the world's first Web browser company, Netscape. Horowitz was an executive there as well.

Andreessen-Horowitz -- dubbed "A to Z" -- has only two general partners, an unusually high cash-to-investor ratio.

"We have designed our charter so we can invest in a range anywhere from $50,000 to $50 million," Andreessen said. "We can invest in early stages, we can invest in classic venture rounds where you might invest $5 million or $8 million, we can also do late stage. It's what we call full spectrum," he said.

Venture capital is a long-haul journey, with investments often lasting seven years or more before a company can make money. The $300 million is designed for a 10-year run, and Andreessen said that it could stretch out even longer for some companies.

Silicon Valley and the West Coast are full of successful companies, from Intel (INTC.O) to Cisco Systems (CSCO.O) and Google (GOOG.O), but they are tough to pick.

The venture capital industry crashed in 2001 when the dot-com bubble burst and has never recovered to the levels of the late 1990s. With fewer initial public offerings, the industry has languished except for a few successful firms.