Facebook, Accel and Founders Fund Launch fbFund; To Give Grants To Facebook App Startups

During his keynote conversation with Michael Arrington this afternoon at the TechCrunch40 conference, Facebook founder and CEO Mark Zuckerberg announced that the company will be launching a new entity called fbFund with Accel and Founders Fund.

The size of the fund will be $10 million (coming from Accel and Founders Fund) with anywhere between $25 to $250 thousand in grants available for each selected startup dedicated to developing Facebook applications. Founders Fund and Accel will get the right of first refusal for the first round of financing of any company in the fund.

Peter Thiel of Founders Fund and Jim Breyer of Accel will be involved in the fund. Josh Kopelman of First Round Capital, founder of LinkedIn Reid Hoffman, Rajeev Motwani of Google, and Mark Zuckerberg himself will be on fbFund’s board of advisors. Chamath Palihapitiya, VP of Product Marketing and Operations of Facebook, will be handling fbFund internally for Facebook

Zuckerberg’s announcement comes two months after Bay Partners decided to earmark millions of dollars for investment in Facebook applications. Bay Partners’ prospects will certainly be diminished as the result of Facebook’s move to fund applications built on its own platform.