Your Money: Venture capital reviving

Public stock and bond markets got you down? Venture capital is starting to look good again.

VC and angel funding have rebounded strongly since 2008 and the financial crisis, and Golden Seeds Fund 2 L.P., a vintage 2011 fund, is just one example. The fund is focused on making early-stage portfolio investments, such as Cognition Therapeutics Inc., a Pittsburgh life-sciences company, and is building a portfolio of 20-plus investments through 2013.

Golden Seeds is a network of angel investors wagering on start-ups at a time when small business needs financing more than ever. Angel investors are individuals or small groups that invest in start-ups, in return for convertible debt or a piece of ownership.

Golden Seeds specializes in women equity owners. Previous investments have included gDiapers, a disposable and 100 percent biodegradable alternative, and Jane Friedman's Open Road Integrated Media.

Friedman was previously chief executive officer of HarperCollins Publishers Worldwide before starting her e-book and publishing business.

"We're looking for the female Warren Buffett," said Peggy Wallace, a managing partner at Golden Seeds and former managing director at JPMorgan Chase & Co.

Golden Seeds' second fund is raising $25 million and is closing capital commitments by the end of 2011. The investment committee is made up of managing partners such as Jim Estill (early-stage investor in Research in Motion Ltd., maker of the BlackBerry), Golden Seeds founder Stephanie Hanbury-Brown, and Joan Zief, a managing director and 35-year veteran of Goldman Sachs Group Inc.

This kind of investing is definitely not for everyone. Similar to hedge funds, VC and angel investors must be accredited to participate in the funds, which means they must have a net worth of at least $1 million, excluding primary residence, or $200,000 in annual income.