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Accel partner Jim Breyer and Venrock's David Siminoff plan to take money from Hollywood talent agency William Morris and AT&T to form a new fund, according to the New York Times. It will be financed with "tens of millions of dollars" and looks to invest as little as $250,000 in digital-media startups based in Southern California.

AT&T exec Susan Johnson said she hopes the fund will focus on "mobile opportunities." Siminoff told the Times the historical friction between Los Angeles and SIlicon Valley won't be a problem. "The ethos of this fund is about reducing the friction," he said. "Hollywood people are not stupid. They are just not technology people." That line of argument will be a tough sell in the Valley.