Andreessen Horowitz

Andreessen Horowitz

Type	Private
Industry	Private equity
Founded	2009
Founder(s)	Marc Andreessen and Ben Horowitz
Headquarters	Menlo Park, California
Products	Venture capital
Website	www.a16z.com

Andreessen Horowitz is a venture capital firm founded in 2009 by Marc Andreessen and Ben Horowitz. The company's headquarters is in Menlo Park, California.

Founding and partners

Between 2005 and 2009, Andreessen and Horowitz were active investors in technology companies. Separately and together, they invested $4 million in 45 start-ups such as Twitter.^[1] During that time, the two became well known as superangel investors.^[1]

On July 6, 2009, Andreessen and Horowitz launched their venture capital fund with an initial capitalization of $300 million.^[2] In November 2010, the company raised another $650 million for a second venture fund^[3] at a time when the field of venture capitalism was contracting.^[2] In less than two years, the firm had a total of $1.2 billion under management in two funds.^[4] As of January 31, 2012, the firm was managing $2.7 billion in assets with the closing of its third fund at $1.5 billion.^[5] In May 2011, Andreessen Horowitz ranked as the no. 1 VC firm according to Investor Rank, based on the firm’s networks and level of syndication with other venture firms.^[6] Andreessen ranked no. 10 on the 2011 Forbes Midas List of Tech’s Top Investors^[7] while he and Horowitz ranked no. 6 on Vanity Fair’s 2011 New Establishment List^[8] and no.1 on CNET’s 2011 most influential investors list.^[9]

In addition to Andreessen and Horowitz, the firm’s general partners include John O’Farrell, Scott Weiss, Jeff Jordan, and Peter Levine.

Investments

In September 2009 the firm invested $50 million for 2 percent of Skype stock.^[10] The investment was largely seen as risky because many believed Skype would be crippled by intellectual property litigation (initiated by Skype’s founders) as well as direct competitive attacks from Google and Apple.^[10] “When we bought the company from eBay, many thought that Skype, like so many acquired technology companies, had lost its technical talent,” Horowitz told The Wall Street Journal.^[10] “Through our research, we found that Skype had a core group of engineers who were completely dedicated to the mission. They stayed through the eBay acquisition and were hugely determined to make Skype the communications company of the future.” The gambit paid off when Skype sold to Microsoft in May 2011 for $8.5 billion.^[10]

In February 2011, Andreessen Horowitz invested $80 million in Twitter,^[2] becoming the first venture firm that holds stock in all four of the highest-valued, privately held social media companies: Facebook, Groupon, Twitter and Zynga.^[4] Andreessen Horowitz has also invested in Airbnb, Lytro, Jawbone, Foursquare and other high-tech companies.^[2]

Andreessen Horowitz invests in both early-stage start-ups, which may raise just $50,000, and established growth companies, which often raise tens of millions of dollars.^[11] The firm is currently invested in 156 companies, which includes its own portfolio of 90 companies^[12] as well as 66 start-ups^[13] through its funding of Y Combinator's Start Fund.^[14] Andreessen Horowitz's investments span the mobile, gaming, social, ecommerce, education and enterprise IT (including cloud computing, security, and Software as a Service) industries.^[4]

Former U.S. Treasury Secretary Larry Summers is a special adviser to the firm and former Hollywood power broker Michael Ovitz is among its investors.^[15] The media corporation Bloomberg L.P. is also an investor in Andreessen Horowitz.^[16]

Exits

• Groupon, IPO, 2011
• Instagram, Acquired, 2012
• skype, Acquired, 2010
• Zynga, IPO, 2011

Structure

The firm is structured differently from most other venture capital firms in several ways. Instead of having general partners who specialize in a specific industry, each Andreessen Horowitz partner works on behalf of all its portfolio companies, an approach modeled after the Hollywood talent agency Creative Artists Agency.^[17] Andreessen Horowitz helps start-ups it invests in with everything from recruiting to public relations. Margit Wennmachers, a marketing veteran who joined Andreessen Horowitz in 2010, is among the few venture capital marketing executives at the partner level.^[18] The firm has developed a database of top designers, coders, and executives and uses it to help fill positions at its start-ups. Andreessen Horowitz has 11 staff members (as of September 2011) dedicated to recruiting, which is unusual for a VC firm.^[15]

References

1. ^ ^{a b} Wong Kromhout, Wileen. "Ben Horowitz MS ’90". UCLA Engineering. UCLA. http://www.engineer.ucla.edu/visitor-links/alumni/alumni-profiles-1/ben-horowitz-ms-201990. Retrieved 13 April 2012. 
2. ^ ^{a b c d} Maney, Kevin. "Marc Andreessen puts his money where his mouth is". CNNMoney. CNN. http://money.cnn.com/2009/07/02/technology/marc_andreessen_venture_fund.fortune/index.htm. Retrieved 13 April 2012. 
3. ^ Cain Miller, Claire (November 3, 2010). "Andreessen Horowitz Starts Second Fund". The New York Times. http://bits.blogs.nytimes.com/2010/11/03/andreessen-horowitz-starts-second-fund/. Retrieved 14 April 2012. 
4. ^ ^{a b c} Horowitz, Ben. "Andreessen Horowitz has a new $200m Co-Investment Fund". ben's blog. Andreessen Horowitz. http://bhorowitz.com/2011/04/06/andreessen-horowitz-has-a-new-200mm-co-investment-fund/. Retrieved 13 April 2012. 
5. ^ Rao, Leena. "Andreessen Horowitz Closes $1.5 Billion New Fund". Venture. TechCrunch. http://techcrunch.com/2012/01/31/andreessen-horowitz-closes-1-5-billion-in-new-funding/. Retrieved 14 April 2012. 
6. ^ Schonfeld, Erick. "The Top 10 VC Firms, According To InvestorRank". Top 10 Overall VC Funds. TechCrunch. http://techcrunch.com/2011/05/25/top-10-vc-firms-investorrank/. Retrieved 13 April 2012. 
7. ^ "#10 Marc Andreessen". Midas List Tech's Top Investors. Forbes. http://www.forbes.com/lists/midas/2011/profile/marc-andreessen.html. Retrieved 13 April 2012. 
8. ^ "The 2011 New Establishment List: And the Top Spot Goes to...". VF Daily. Vanity Fair. http://www.vanityfair.com/online/daily/2011/09/the-2011-new-establishment-list--and-the-top-spot-goes-to---?mobify=0. Retrieved 13 April 2012. 
9. ^ "Marc Andreessen and Ben Horowitz". CNET News. CNET. http://news.cnet.com/2300-1001_3-10010632.html. Retrieved 13 April 2012. 
10. ^ ^{a b c d} Ovide, Shira (May 10, 2011). "Microsoft-Skype Deal: Andreessen Horowitz Takes Victory Lap". The Wall Street Journal. http://blogs.wsj.com/deals/2011/05/10/microsoft-skype-deal-andreessen-horowitz-takes-victory-lap/. Retrieved 14 April 2012. 
11. ^ Arrington, Michael. "Andreessen Horowitz Celebrates First Year With New General Partner John O'Farrell". News. TechCrunch. http://techcrunch.com/2010/06/20/andreessen-horowitz-celebrates-first-year-with-new-general-partner-john-ofarrell/. Retrieved 14 April 2012. 
12. ^ Gustin, Sam. "Tech Boom: Andreessen Horowitz Raises $1.5 Billion VC Fund Read more: http://business.time.com/2012/01/31/tech-boom-andreessen-horowitz-raises-1-5-billion-vc-fund/#ixzz1ryDuNeCa". Time Business. Time. http://business.time.com/2012/01/31/tech-boom-andreessen-horowitz-raises-1-5-billion-vc-fund/. Retrieved 14 April 2012. 
13. ^ Mitroff, Sarah. "Y Combinator shows off 39 companies at Demo Day". News. VentureBeat. http://venturebeat.com/2012/03/27/y-combinator-demo-day-march-2012/. Retrieved 19 April 2012. 
14. ^ Kelly, Meghan. "Andreessen-Horowitz to give $50K to all Y Combinator startups through Start Fund". Deals. VentureBeat. http://venturebeat.com/2011/10/14/andreessen-horowitz-to-give-50k-to-all-y-combinator-startups-through-start-fund/. Retrieved 19 April 2012. 
15. ^ ^{a b} "Disrupting the disrupters". Technology Quarterly: Q3 2011. The Economist. http://www.economist.com/node/21527020. Retrieved 14 April 2012. 
16. ^ Danielle Kucera (6 March 2012). "Andreessen Horowitz Invests $25.5M in Jumio’s Online Payments". Bloomberg. http://go.bloomberg.com/tech-deals/2012-03-06-andreessen-horowitz-invests-25-5m-in-jumios-online-payments. 
17. ^ Menn, Joseph. "Andreessen expands venture capital business". Financial Services. The Financial Times. http://www.ft.com/intl/cms/s/0/af5c1a7c-e717-11df-880d-00144feab49a.html?ftcamp=rss#axzz1gRgXwx3C. Retrieved 14 April 2012. 
18. ^ Cain Miller, Claire (15 June 2010). "Andreessen Horowitz Hires a Female Partner". The New York Times. http://bits.blogs.nytimes.com/2010/06/15/andreessen-horowitz-hires-a-female-partner-from-outcast-communications/. Retrieved 19 April 2012. 

External links

• Andreessen-Horowitz web site