Analysis, Startups, Technology

Some Insights into Marc Andreessen’s New Venture Capital Firm, Andreessen Horowitz

Marc AndreessenGist: Andreessen, founder of Netscape, and Horowitz start forward-thinking venture capital firm with a fund of $300 million, investing $50k to $50 million. They prefer technical founders, and like technical CEOs. They want to understand the technology and the product well, instead of viewing from a distance, and aren’t interested in areas they don’t have experience in (unlike many VC firms.) However, the firm is difficult to contact, but it’s a radical and forward-thinking firm.

Marc Andresseen, known for founding Netscape Communications (now part of AOL Time Warner (TWX)) and Ben Horowitz have started Andresseen Horowitz, a $300 million technology venture fund. Andressen notes on his blog the launch and the details of the fund. They are investing $50,000 to $50 million into technology startups. Andreessen and Horowitz have built a venture fund that is special in a few ways.

First, Andreessen Horowitz is a very focused venture capital firm. Their investments are only in technology, and not in other areas (whereas some other firms invest in whatever might sound good.)

“We are almost certainly not an appropriate investor for any of the following domains: “clean”, “green”, energy, transportation, life sciences (biotech, drug design, medical devices), nanotech, movie production companies, consumer retail, electric cars, rocket ships, space elevators. We do not have the first clue about any of these fields.”

As a result, Andreessen Horowitz make an effort to really understand the product itself, along with making sure the business’s financial models are sound. It’s obvious that Andreessen knows quite a bit about technology and startups as well, and has experienced the trenches of startups (at, I may add, an extremely exciting 90s boom company, Netscape.) Andreessen Horowitz is more focused on understanding the product itself, how it works, and the technology behind it, without losing sight of the financials as well. Most venture firms lose sight of having an intimate knowledge of the technology and product.

They demonstrate this as well by preferring technical founders. The notorious “business-side founder” that likes to do whistle-blowing and order-giving that doesn’t want to do any of the heavy lifting doesn’t seem to be an interest to Andreessen Horowitz. In addition, they are looking for founders that intend to become CEOs. Extrapolating from that, they’re looking for a technical CEO lead. (Andreessen also notes that the firm will assist them in development of CEO skills.)

It’s also quite small in makeup. Andreessen and Horowitz will be the only two General Partners in the firm, and they don’t expect to bring on more. Andreessen has an eye for good startups. Along with co-writing the Mosaic browser and founding Netscape Communications, he is Chairman of Ning and on the board of Facebook and eBay (EBAY).

Interestingly, it’s also hard to find. To get in contact with Andreessen Horowitz, most likely an introduction would be required. Andreessen Horowitz doesn’t have a website or a contact email. We’ll see how this scarcity and limiting of connections and in-lanes works out for Andreessen Horowitz.

Andreessen Horowitz presents itself as a flexible, radical, forward-thinking and entrepreneur-focused venture fund, which is exactly the kind of venture fund that there needs to be more of. I’m personally a big fan of Andreessen Horowitz, since the firm sets itself apart from others.

Although Andreessen Horowitz is also investing $50k–$1 million, and from its size is somewhat close to an angel firm, it may be interesting to see an angel firm modeled after the same ideas and mentality as Andreessen Horowitz to rise.