By Tom Ballard, Chief Alliance Officer, PYA
For those who attended the concluding fireside chat at last week’s “36|86 Conference,” there was a reference to a big announcement forthcoming from Andreessen Horowitz, the well-known and highly successful Silicon Valley venture fund.
In fact, Moderator Paul Santinelli of North Bridge Venture Partners said something to the effect that “you have a major announcement to make.” Andreessen Horowitz’s Scott Kupor quickly said, “Well, I’m not sure we’re ready to do so right now.”
The big news came on Friday, three days after the firm’s Managing Partner spoke at the “36|86 Conference,” and it was another seismic announcement from the seven-year old firm. Fund V will be a $1.5 billion commitment to make investments across the board – from seed stage to mid-stage, more mature companies.
During his fireside chat in Nashville on Tuesday, Kupor said Andreessen Horowitz had a “predilection for technical founding CEOs,” adding the firm seeks to understand “what does that person need to make him or her a long-time CEO.” Andreessen Horowitz then involves its broad cadre of General Partners, all of whom are former start-up CEOs.
Much of what Kupor said last week was not new, but it should be viewed as important, coming from the Managing Partner of such a well-respected firm.
Not surprising, he said the minimum bar to get before Andreessen Horowitz starts with market size, “Is it large enough,” Kupor said, adding later, “Don’t assume we know?” If the answer is “yes,” the next question to answer is “Why bet on this team? What makes this team uniquely qualified?” Another key factor is the uniqueness of the company.
Andreessen Horowitz makes about one-half of its investments in consumer facing start-ups and the other half in enterprise facing companies including those innovating on business models.
Kupor added that there needs to be a real problem that the start-up is solving.
“It’s product first over company first,” he said.