PaidContent reports that AOL Ventures is creating a $10 million venture capital fund for local start-ups. The fund expects to support the “increasing number of startups” in the market. AOL Ventures had previously announced that it is spending $50 million this year to launch Patch.com in “hundreds” of communities.

The company also announced it will relaunch its “City’s Best” entertainment guides in 25 cities, while adding geotargeted local content to AOL.com. In its announcement, AOL CEO Tim Armstrong says the local space online is “an untapped market for the most part and one of the largest commercial opportunities online that has yet to be won.”

AOL Ventures EVP Jon Brod is the opening keynote at Marketplaces 2010 next week in San Diego.