It took Skype co-founders Niklas Zennström and Janus Friis over a year to raise funds for their Internet telephony service. They were turned down by one VC after another, mostly because no one in Europe wanted to risk betting on two entrepreneurs with a crazy idea. Most sought the comfort of investing in the late stage companies.

“It became obvious to us that if we became successful, one of our next ventures would be to start an entrepreneur-friendly venture fund,” Zennström recalled in a conversation this morning  with me. Zennström and Friis did just that when they started Atomico in 2006 and raised their first fund, Atomico Ventures I two years ago and have just closed a new $165 million fund (Atomico Ventures II) that is going to invest in seed to early stage companies in Europe. They had previously raised an undisclosed amount of money (a lot less than rumored $450 million I had reported in 2008) from which they have invested in start-ups such as Seesmic, Viagogo and Mydeco.

The duo had aimed for a maximum cap of $266 million for their second fund, but the economic downturn made it difficult for the London-based firm to hit that target. Zennström is happy that they were actually able to close a fund during such a rough economic times.But Atomico is going after a great niche.

The firm is pitching itself as fund for the founders by the founders — something sorely needed in stodgy Europe. When I was in Paris for Le Web 2009, one of the most common refrains was the lack of venture capitalists with a risk tolerance akin to their American counterparts.  Many entrepreneurs lamented that most of the established firms were looking to invest in less riskier investments.

“We are going to be investing in anything from guys with an idea and a PowerPoint to early stage prototypes,” said Zennström. Niklas says the fund is looking to make investments that are in the single million dollar range, and will invest in 20-to-35 companies over the life of the fund. Atomico has already invested in seven companies from its second fund. These include startups such as online music service provider Rdio and Tariq Karim’s Jollicloud, a maker of netbook operating systems.

So what else will Atomico invest in? Niklas says the firm is definitely not interested in capital intensive companies such as enterprise software and semiconductor start-ups. Instead, the two want to focus on companies making consumer Internet service and web apps aimed at small & medium sized businesses. But in the end, Zennström said, the idea is not to get married to investing in any theme or getting too fascinated by one thing. Except one — smart entrepreneurs.