Alan Patricof was a venture capitalist before the term even existed. In 1969 he formed Alan Patricof Associates, which became Apax Partners, now one of the world’s largest private equity firms and an early investor in AOL, Apple, and Office Depot. Today, Patricof runs Greycroft Partners, a boutique V.C. firm that invests in new media and wireless companies. Here, he talks about investing during a risky era.

If you had an extra $100,000, how would you invest it?
I certainly would not invest everything immediately. I would do it cautiously, on a gradual basis.

But it depends on your age and net worth. If you only have $100,000 to invest, put 40 percent in stocks, including some international concerns; 25 percent in convertible preferred or convertible debt; 25 percent in 15-year federally backed C.D.’s with a 6 percent return. And I would keep 10 percent in cash, to take advantage of any further decline in the market. I don’t think we’ve fully experienced the economic malaise permeating the system.

What types of investments should an investor steer clear of?
Avoid the airlines, which have multiple issues with labor and operating costs. And avoid any investments you don’t understand.

As a venture capitalist, do you keep investing when the market is in crisis?
We’re very actively investing. There’s been a decline in money allocated to startups, but that’s healthy. The venture business is in much better shape than it was during the tech bubble. The values are sounder, the expectations much more realistic, the management much more experienced. For an entrepreneur with a good business plan and a good management team, this is a perfect time to raise capital.

How does someone make a private investment?
To invest in a venture capital fund, you must be a “qualified investor”; most funds ask for investments of at least $1 million. Another alternative is angel groups. There are at least 100 angel groups in the U.S., probably more than 300 worldwide. And an angel investment gets you in on the ground floor of a new company: You can get highly involved in building the business.

If your grandchildren were going to start investing for the long term, what would you tell them?
Alternative energy will be much bigger in the coming years, and the internet is going to be our primary way of getting information for a long time. In the technology sector, look at companies that provide I.T. and software services, which allow for better productivity across our industrial base. And mobile phones are an interesting opportunity. They will be ubiquitous and deliver services that touch every aspect of our lives: video, information services, global positioning, music. So I’d put money in the mobile-phone industry. Although when I need to reach my wife, I email her. She doesn’t check her voice mail, so it’s faster than using the phone.

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