Mark Patricof

MESA+, a four-year old venture arm of the investment bank and strategic advisory firm MESA Global, is launching a $10 million venture fund today for seed stage and Series A investments. The fund will be allocated towards companies in consumer Internet, digital content, advertising, marketing, and commerce and focus on investments in New York, from the Mesa+'s Union Square headquarters.

"Since its inception, MESA has worked hard to connect startups with our network in the media and entertainment world," the company said in a press release, noting that, "we are a startup ourselves." The firm has ballooned from four people to more than 25, including its three partners: Jacob Brody, Andrew Montgomery, and Mark Patricof.

Mr. Brody, a fixture in the city's startup scene, is a mentor at the Entrepreneurs Roundtable accelerator and on the advisory board of Livelyhoods, a non-profit that empowers impoverished children in Africa by training them to become direct sales reps. Mr. Montgomery is also a VP at MESA Global, where he's worked on financing and M&A deals with clients like Blue Man Group, Interpublic Group, and Fantasy Sports Ventures.

Mr. Patricof, son of long-time venture capitalist (and one-time runway model!) Alan Patricof, is also a managing partner at MESA Global. He cofounded <kpe>, leading clients like CBS, Sony, and Viacom toward the transition to digital. He started his career at Creative Artists Agency and was a finalist for the Ernst & Young Entrepreneur of the Year Award.

In a statement about the fund, Mr. Patricof noted the firm's crossover appeal between tech, media, and entertainment: "These industries have increasingly become intertwined; the complex relationship between these industries has made it difficult for many entrepreneurs to build their businesses."

In the press release, MESA+ also offered some details about the fund as well as its frequent co-investors:

MESA+ expects to invest in 50 to 70 companies alongside high quality co-investment partners. We are off to a great start having already invested in 7 companies in New York and California alongside funds including Lerer Ventures, Google Ventures, IA Ventures, Andreessen Horowitz, True Ventures, Floodgate and Betaworks. We are able to invest globally, however our focus will be on the New York market where MESA has a hometown footprint. MESA+ will not lead investment rounds or take board seats, but we will be a trusted partner to our portfolio companies by providing recruiting assistance, strategic advice, PR and business development opportunities.

MESA+ has an impressive group of limited partners that fit well with its investment focus on digital media, including Conde Nast, Saban Capital, and Sony Music. The fund's LP advisory committee includes Andrew Siegel, senior VP of strategy and corporate development at Advance Publications, parent company to both Conde Nast and Reddit, as well as Jonathan Miller, News Corp's former chief digital officer. For its startup bona fides, that list of advisors also includes Dan Maccarone, cofounder and CEO at Charming Robot and cofounder at Hard Candy Shell, which designed the original UX for Hulu, Foursquare, Rent the Runway and Jetsetter.

Can we all just relax?

News broke this morning that the SEC is thinking about relaxing the limit that keeps private companies from having more than 500 shareholders. It's a move that would reshape the tech world, making it possible for companies to significantly delay their IPOs by relying on a broad pool of wealthy individuals to provide them capital to grow. It's troubling as well, since it would mean more small investors putting money into firms that don't make their financials public.

"Just because you can afford a car, doesn't mean you know how to drive one," quipped Larry Lenihan, CEO of First Mark Capital and a board member at SecondMarket, in a call this morning. "Bitch and moan and call me a socialist, but people do need to be protected from themselves," said Lenihan. "While I think it makes sense to relax the shareholder limit and the general solicitation ban, this has to come with new regulations and increased transparency in the private markets."

Union Square Ventures' Fred Wilson had the opposite reaction to the news. "The best companies will most likely eventually go public and deal with the issues that being a public company presents, but the value creation that occurs pre-IPO has been and will likely to continue to be very significant," he wrote no his blog, A VC. "And it would be a fantastic outcome if the SEC decides to allow the general public to be a more active participant in the value creation that happens while companies are still privately held."

Some in the New York venture community see the focus on private markets as misplaced. "I think the SEC and White House should be focused on helping small companies to go public," Greycroft's Alan Patricof told Betabeat by phone. "That would have a greater benefit for entrepreneurs and our economy than expanding the scope of these private markets."

According to the WSJ story, the average number of IPOs each year has plummeted, from 503 during the 1990s to 130 during the aughts. At the same the transactions in private shares has jumped from $2.4 billion in 2009 to $4.6 billion last year. But has the general public really missed out on an enormous opportunity, as Wilson suggests? Certainly LPs in the nation's top venture funds may have seen great returns, and USV has some big winners in its portfolio of private companies. But as an industry, venture returns over the last decade have been flat to negative.

If the SEC's response to the boom in private markets is to broaden access to them, both by increasing the pool of possible stake holders and relaxing the ban on soliciting buyers, then it needs to put in place new rules as well. That would help to ensure that platforms like SecondMarket and Sharepost become a productive new paradigm for funding young companies, not an artifact of the cyclical boom and bust in tech, with a new class of smaller investors left holding the bag.