Union Square Ventures Is Raising A New $200 Million Opportunity Fund

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Update 1/15/11: Union Square ended up raising $165 million for this fund. More info here.

Union Square Ventures is raising $200 million for a new fund called the Union Square Ventures Opportunity Fund LP. According to an SEC filing, the VC firm already raised $135 million for the fund from 19 investors. The last time Union Square raised money was for its $156 million Union Square Ventures 2008 LP fund.

Union Square Ventures is the leading early stage VC firm in New York City led by Fred Wilson, Brad Burnham, and Albert Wenger. The filing also lists a new partner, John Buttrick. Its portfolio includes Twitter, Foursquare, Zynga, Tumblr, Boxee, Disqus, Etsy, Clickable, and Indeed.

Partner Fred Wilson is well known for betting on startups right out of the gate before most other VCs will touch them, and is also highly-visible because of his popular blog, A VC. He recently raised concerns about too many venture investors chasing returns, wanting to invest in venture startups without really understanding their business. But in that same post he also wrote:

The venture capital business is showing good returns for the first time in a decade. The sectors that are performing best are web services and early stage/seed investing. These are sectors we have been investing in for over fifteen years. We’ve seen these sectors boom and bust before and we’ll probably see it again. We are committed to these sectors and have no plans to leave them.

Union Square’s new Opportunity Fund will presumably focus on the same sorts of early stage Internet startups Union Square is so good at sniffing out. Although the name is different its previous funds, which are differentiated by date. So it is possible that the Opportunity fund will focus on a different set of opportunities. I have an email out to Union Square about this and will update when I hear back.

Update: Fred Wilson says: “We cannot comment at this time because we’re still in the process of raising the fund. We look forward to giving you a full report when that process concludes, which is expected later in January”

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