Many Venture Observers I wondered or Andreessen Horowitz, company manages $ 45 billionHe has its view that ultimately grow to be a publicly listed company.
Co -founder Marc Andreessen said that he is not “not hungry to take a public company” this week Invest the best podcast. But he discussed his goal, which is to build A16Z in a lasting company, derived from JP Morgan and publicly traded private equity corporations.
Historically, Venture Capital corporations were partnerships consisting of a “small tribe of people sitting together in a room, trying to bounce back when they make an investment,” said Andreessen in Podcast.
He said that the problem with the partnership model is that it is very dependent on the ideas and knowledge of people at the table with “without basic value of assets”, as he described. When the original partners retire, the company loses high value, even if the recent generation of investors takes power.
“But even if they can continue it, there is no basic value of assets. This next generation will have to pass it on to the third generation – he said. “This will probably fail in the third generation. One day it’ll be on Wikipedia: this company existed and then disappeared. “
The partnership model may be lucrative. Billions of A16Z management generate significant money management fees for the company, in addition to profits made when its investments are succeeded.
However, Andreessen said that it continually reminds internal employees and limited partners that the company does not collect money but to gather fees. This is to offer the company money to speculate in developing corporations.
“When we go on a scale, this is because we think that it is necessary to support the types of companies that we want to help build our founders,” he said.
Andreessen says that its greater goal for A16Z is to create a company that lasts. An alternative to the partnership is to build an investment company that is managed as a company, which implies that it has management, many staff layers, division of labor with specializations and training programs, said Andreessen.
There are definitely precedents of small partnerships evolving in large corporations, which Andreessen can use as a model of ambition A16Z.
“Goldman Sachs and JP Morgan, 100 years ago, looked like small companies Venture Capital,” he said. “Over time, their leaders turned them into huge franchises and large public companies.”
He also called other examples of private partnerships that turned into large publicly listed corporations, equivalent to large private equity corporations. Blackstone, which currently has market capitalization in the amount of over $ 200 billion, made public in 2007. Apollo, KKR and Carlyle organized their IPO shortly after Blackstone, and TPG at the starting of 2022.
Andreessen claims that as these corporations have grown from partnership to large corporations, their long -term success has grow to be less dependent on several key investors.
“A large part of what we tried to do is to build something that has such a lasting aspect,” he said.
In many respects, Andreessen Horowitz looks more like an operational company than many VC corporations. A16Z has dozens of people in a marketing group and large teams that help corporations recruit wallets and sell their products. The company conducts separate cryptocurrency, BIO and health strategies in addition to American dynamism strategies.
But perhaps there is one more reason why Andreessen desires to restructure from the classic VC system. As for the partnership, he says: “In most cases, it turns out that in most cases you will discover that people really do not like each other.”