Venture Capitalist Sets Up Java Fund

High-tech venture capital powerhouse Kleiner Perkins Caufield & Byers said Wednesday it has created a $100-million fund to invest in start-up firms developing businesses based on the hot new Java technology for the World Wide Web.

Kleiner Perkins--which since its 1972 founding has created a web of companies similar to Japan’s networks of closely affiliated businesses--named 10 major technology companies, including International Business Machines Corp., Compaq Computer Corp. and Netscape Communications Corp., as investors in the new fund.

It said the Java Fund was closed to any new investment.

Kevin Compton, a Kleiner Perkins general partner who will be a fund manager, said the fund aims to improve small firms’ access to corporate investors at a time when new product development has been shortened considerably by the frenzy over the Web.

“These companies have to live in Web weeks now, and instead of spending a year, or who knows how long, it takes to get corporate partners, they’ve got them on Day One,” he said.

Java developer Sun Microsystems Inc., itself a company launched with support from Kleiner Perkins, is the largest investor in the fund after Kleiner Perkins’ institutional investors as a group.

“We could have just let the market take care of this because there’s a lot of money in the market right now,” Eric Schmidt, chief technology officer at Sun Microsystems, said in an interview.

But, he noted, the fund aims to build on the broad enthusiasm over Java, which has been licensed by a wide range of software developers ranging from Redmond, Wash.-based software giant Microsoft Corp. to the Taiwanese government.

“There’s a certain benefit that’s hard to quantify of having people with a shared goal, with a clear name and a clear objective,” investing together, he said.