Many venture industry observers wondered if Andressen Horowitz, a company that manages $ 45 billion, has a sight to be a publicly traded company.
Co -founder Marc Andreessen said in the best podcast in this week’s investment, “We don’t steal beats to popularize the company.” However, he discussed the goal of constructing the A16Z to a continuous company, and inspired by the private equity fund company publicly traded with JP Morgan.
Historically, the venture capital company said, “It is composed of a small tribe of small people sitting in the room, and is trying to bounce the idea when investing.”
He is a problem with the partnership model that he relies greatly on the ideas and expertise of people at a table with “no basic asset value.” If the original partner retires, the company loses much value even if a new generation of investors take over.
“But even if they can go, there is no fundamental asset value. The next generation will only have to convey it to the third generation. ” “Perhaps it will fail in the third generation. Someday you will be in Wikipedia. The company existed and disappeared. ”
Partnership models can be advantageous. Millions of dollars of A16Z, which is being managed, generates significant money management fees for the company in addition to profits when investing is successful.
But Andressen told an internal employee and a limited partner that the company continued to remind the company that the company was not raising money to harvest fees. It is to provide the company with the cash to invest in the growing company.
“When we go for scale, we think we need to support the types of companies that we want to help them build,” he said, “he said.
Andressen says that his bigger goal for A16z is to create a continuous company. The alternative to the partnership is to build an investment company that is managed like a business. In other words, Andressen said that there is a labor department and an educational program in the field of management, several hierarchies, and specialized fields.
There is a precedent of a small partnership that evolves into a large company that can be used as an ambition for A16Z.
“100 years ago, Goldman Sachs and JP Morgan looked like a Little Venture Capital company.” “Then their leaders have changed them into huge franchises and big public companies over time.”
He also changed other cases of private partnerships into large -scale listed companies such as large private equity funds. BLACKSTONE, which currently has a market cap of more than $ 20 billion, was released in 2007. Apollo, Kkr and Carlyle held IPO immediately after Blackstone, and the TPG was listed on NASDAQ in early 2022.
Andreessen argues that long -term success has become less dependent on some major investors as these companies grow from partnerships to large companies.
“The big part of what we were trying to do is to build something with that kind of continuous side,” he said.
In many ways, Andressen Horowitz looks like an operating company more than many VC companies. The A16Z has dozens of people in the marketing group and large teams, helping portfolio companies recruit talent and sell their products. The company operates a separate encryption, bio and health and American epidemiological strategies.
However, there may be another reason why Andreessen is going to move away from the classic VC system. He says, “In most cases, people do not actually like each other.”
