Most kinds of hardware have become such commodity items that if any serious money is to be made out of new computer companies, software has to be the place to look – problem is that software companies generate relatively little volume – a Microsoft Corp comes along once in a generation, and don’t need that much cash, which makes them relatively uninteresting to venture capitalists. Private venture capital partnership, Menlo Park, California-based Mayfield Fund is addressing the problem with the launch of Mayfield Software Partners, a highly specialised venture capital fund raised for software investment at the earliest stages. The $4m fund will provide seed and start-up financing in sums from $50,000 to $500,000 and was formed to assist promising software entrepreneurs whose needs were not adequately being met by traditional capital sources. Mayfield believes that many successful industry professionals meet entrepreneurs they would like back with cash, but that the needs of the start-up in many cases exceed the individual’s resources or spare time. The firm envisions Mayfield Software Partners as a means of bringing together the interests of Mayfield, successful individuals as active Limited Partners, and software entrepreneurs. The new fund’s structure includes an equal capital investment by Mayfield Fund and a group of 20 individual Limited Partners. Mayfield’s Software Team and the fund’s Limited Partners will be available to provide strategic and management assistance to portfolio companies. Limited Partners of the new fund include Chuck Boesenberg, chairman, president and chief executive of Central Point Software Inc; Mike Boich, chairman of Radius Inc; Doug Carlston, chairman and chief executive of Broderbund Software Inc; Esther Dyson, president of EDventure Holdings; Fred Gibbons, president and chief executive of Software Publishing Corp; and Tim Mott, chairman and chief executive of Macromedia Inc. Since its founding in 1969, Mayfield has had more than $370m of capital under management and has backed over 200 companies that today represent a total market value of over $20,000m, it claims.
