Tech Industry

Barksdale venture group breaks up

Former Netscape CEO Jim Barksdale and two partners in his venture capital firm take jobs elsewhere, given what one partner calls "a difficult climate for funds."

Jim Barksdale's venture capital fund is shutting down, and Barksdale and two other partners have taken new jobs.

Barksdale, the former CEO of Netscape Communications, set up the Barksdale Group in 1999. Tuesday, he was named a special adviser to General Atlantic Partners, a Greenwich, Conn.-based private equity group. Peter Currie, a partner at the Barksdale Group, is joining General Atlantic as a partner.

Barksdale Group partner Danny Rimer has been named a partner at Geneva-based Index Ventures, and will be working out of that firm's London office, executives for Index Ventures said.

The Barksdale Group bills itself on its Web site as being focused on applications and infrastructure that are "instrumental in forging the Net Economy"--an economic sector that during the last two years has largely been discredited. Its initial venture fund had backed tech start-ups including HomeGrocer.com, Respond.com, Listen.com, Loudeye and Tellme Networks.

Rimer said that the group decided against starting up a second fund. The members decided instead to take new jobs, but will continue to have partner meetings, manage the first fund and maintain all board seats on the portfolio companies.

"The Barksdale Group will continue" in an administrative fashion, Rimer said. "We will continue to be involved with the companies, but will not be making new investments, and the office will shut down."

One of those companies, formerly known as Rearden Steel and newly rechristened Moxi Digital, this week is emerging from secrecy to enter the home-entertainment market with a long-awaited multimedia system.

HomeGrocer was one of The Barksdale Group's best-known investments. In 1999, the venture firm put $5 million into the online company, which went public in March 2000, raising $245 million. HomeGrocer later saw its stock languish with the online grocery business, and it was bought by competitor Webvan in June 2000. Webvan filed for bankruptcy about a year later.

The group's first and only fund of $180 million, half of which came from the partners, is 70 percent invested, and the remaining money will be spent in follow-on investments in the existing portfolio companies, Rimer said.

"It's a difficult climate for funds. To raise money would take the lion's share of a year and hundreds of meetings," he said. "(We decided) we would rather join institutions that have done this for a long time and have a track record than go out there and raise a new fund."

But if the climate in Silicon Valley isn't as sunny as it used to be, Rimer said he thinks there's potential elsewhere.

"If you look around Silicon Valley and what's gone on in the VC industry, it's fairly mature and fairly crowded," he said. "You look in Europe, and it's still an environment where there is no firm that has taken center stage as the primary firm yet. That is an opportunity that is extremely attractive."