Mission Creek

I think the real question will be the ability of these smaller funds will be their ability to remain as an aligned interest if the startup takes a longer than expected time for an exit event.

from mercurynews.com

To be a serious player in Silicon Valley, you’ve long had two options: working for a venture capital firm or becoming an angel investor and plowing your own considerable wealth into budding technology start-ups. Now a new model may be emerging, that of the microfund manager.

For a variety of reasons, a growing number of investors are raising their own, small funds of $10 million to $15 million. Three, all with a slightly different makeup, have sprung up in the past month alone, all with one thing in common: Each is run by one individual who is showing up at the table with other people’s money.

Some of these investors are frustrated with the structure of venture capital partnerships, while others want to invest in extremely small start-ups that traditional VC firms that have been ballooning in size have begun to ignore.

“It’s sort of the next step of angel investing,” says Mark Heesen, the president of the National Venture Capital Association. “VCs just don’t have ability to invest in extremely early stage companies any more, and someone needs to do that in organized fashion. So I think there is a market there, that the timing is right.”

full article here