Interesting that a number of eminence grise of the venture business are striking out with small-ish new funds. We had Vinod Khosla with his Khosla Ventures, and now we have Alan Patricof with his Greycroft Partners. Mind you, Alan is sticking closer to his knitting with his fund than Vinod is with his: Patricof’s $50mm fund is focused on wireless, media and entertainment companies, while ex-telecom guy Khosla’s is energy and … stuff.
Nevertheless, this newfound ardor for smaller funds, both in capital and numbers of partners, is intriguing. What does it say about the current venture business’s professionalization that long-time partners don’t want to play any more in billion-dollar funds with hordes of colleagues (hey, everyone’s a partner at KP)?
This is good news for venture investing. Khosla and Patricof are some of the smartest people in the business, and the fewer layers (and over-sized Monday partner meetings) there are between them and the marketplace the better.