Venturing into a New Era of Capital
By Azam on September 22, 2008 
Most headlines these days are focusing on the recent turmoil in the capital markets with the destruction of firms, capital, and some shattered lives from collateral damage of collateral debt. A more quiet revolution is taking place, and a new form of capitalism is emerging to fund entrepreneurs. Silicon Valley VCs changed the way technology companies were created and evolved. The VCs unleashed a wave of new entrepreneurs and some of the largest technologies firms into the public. The new wave of investors has evolved from the Silicon Valley of Sand Hill. The investors and entrepreneurs involved in the Silicon Valley model are creating a new creative capital cycle. A number of investment funds are putting smaller amounts of capital, for smaller stakes, and for earlier stage investing. New investment funds designed under the new model for investing are proving the model works very well: Union Square Ventures , First Round, and Founders Fund.
The landscape in the financial markets is changing the established conventions. So, it is not surprising that entrepreneurs and the capital used to fund them would change. The best way for a budding entrepreneur to learn the process would be from a successful entrepreneur with capital. The new funds are usually run by entrepreneurs or individuals experienced working with early stage startups and helping them reach the exit.
Entrepreneurs feel more comfortable working with experienced entrepreneurs that been through the entire process and having a better understanding that they can relate to. The Sand Hill firms typically prefer later stage investments with more proven team of experienced professionals to minimize risk and more likely to offer higher returns. Most Silicon Valley VCs would not entertain the entrepreneurs that the new model funds consider. A number of the Venture Capital funds end up participating in later rounds of funding in these promising entrepreneurs and their respective companies that received earlier funding.
News Funds and Selected Portfolio Companies
Union Square Ventures
Adaptive Blue, Clickable, Delicious (Yahoo), DisqUs , Etsy, Feedburner(Google), Tumbler ,Twitter, Zynga
FirstRoundCapital
Like.Com, Mashery , Mint Software, Xobni , RockYou , StumbleUpon(eBay), Wikia
Founder Fund
Facebook, IronPort (Cisco), ooma, powerset (MSFT), raptr, slide, smart drive, yammer
Categories : TechTags : First Round Capital, Founder Fund, New Funds, Union Square Ventures