Looking for Funding? Accel Partners just Raised $1 Billion

In a recent post; James Geshwiler, Managing Director of Boston Common Angels, questioned whether this is Wall Streets recession or ours [venture capitalists & entrepreneurs]?

The recession has affected some venture capital firms, but that doesn't mean all of them. Many firms are having trouble coughing up committed money for follow up investments. Their limited partners, such as college endowments, have pulled in the reins saying they won't be able to commit new money until 2010.

Accel Partners; on the other hand, just "brushes the dust off their shoulders" and hoards in another $1 Billion for two new funds they've been raising money for over the past 2 months. The money isn't only huge, the opportunity is too. They'll be able to take advantage of the old adage, "buy low, sell high" and theres not better time to do that then in a recession. Here's two reasons why:

1. Companies that were planning on doing an IPO for more dough will no longer be able to during the recession. "The growth equity money comes at an opportune time, when many more mature companies that expected to go public or sell themselves by now are instead left languishing in venture portfolios, in need of fresh cash to sustain themselves." The heightened need may put Accel Partners in a position to command high equity stakes for less investment. Therefore, reducing risk.

2. There're many startups who've had their cash called and need follow on investments. The same story holds, Accel Partners comes to the rescue. They're in an ideal situation to hand pick the best startups at the best price.

Accel Partners is even better well positioned considering one of the funds is for late-stage companies and the other for very young startups.

Few venture capital firms, if any others, will be able to raise this type of money during the recession. Their ability to do so likely comes from their long 25 year strong track record and leadership position in the industry and Silicon Valley with previous investments such as Facebook, MetroPCS (an unlimited wireless service), and Glam Media (a huge fashion and celebrity network for woman). They were also one of the investors in Yahoo and comScore .

“No one knows when the markets will open again, but if you were able to deliver your fair share to investors during the brief liquidity window, that’s a positive thing.”

- Theresia Gouw Ranzetta, Partner at Accel Ventures