LinkedIn's Reid Hoffman now a VC

Founder of business social networking site joins venture firm Greylock Partners

In spite of shrinkage in the venture capital industry, one Silicon Valley venture capital firm, Greylock Partners, announced a boost Monday, having set up a new $575 million fund, one of the biggest of the year.

In addition to the new fund, Greylock Partners also happily announced the recruitment of Reid Hoffman, the founder and chairman of the popular business-oriented social networking site, LinkedIn. With 85 investments to his name over the last six years, Hoffman has contributed to some big names in social networking and other social media-related sites, like Digg, Facebook, Flickr, Zynga, and many others. Since Greylock has invested in many of the same companies--Digg, Facebook, and LinkedIn--the partnership seems only logical.

“I definitely wear too many hats,” Hoffman said. “[Greylock and I] both wanted to make sure we had good, aligned interests. My interest was that I would continue to be massively focused on LinkedIn, and their interest was that I would help provide intelligence on the consumer Internet.”

Hoffman says he will remain in his position as chairman of LinkedIn, and his work on angel investing will now be devoted solely to working with Greylock.

Venture investing won't be anything too new for Hoffman, who has been an angel investor for eight years. He'll just be doing the scouting and investing for Greylock, while continuing his work as chairman at LinkedIn. Jeff Weiner became CEO of LinkedIn back in June, so there need be no concern about who'll keep the company going strong.

Besides Greylock Partners, Khosla Ventures, Sequoia Capital and Accel Partners have all also managed to raise funds this year for startup companies. Greylock will continue to focus its funds on early-stage companies, but may look into later-stage companies as well if the investment seems enticing enough.