Venture capital survey: Small firms make a splash

Recently, the small boutique venture capital firm has seemed like an endangered species.

Investment money has cascaded into venture capital firms, and the funds they manage have bloated. Some of the bigger VC funds have so much cash they can invest upward of $20 million a deal.

That has left fewer sources of money for entrepreneurs seeking modest amounts of funding — say on the order of $1 million.

But lately, a handful of venture capitalists is stepping into the void. Silicon Valley VCs are leaving big firms to start their own, smaller firms, with plans to manage $100 million or less.

Smaller firms are more likely to back smaller, early-stage companies — barely out of the garage — and have the patience to step into the trenches and work closely with an entrepreneur, say their supporters.

By Matt Marshall
Mercury News

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