StrictlyVC INSIDER Series: Marc Andreesen: Even the best VCs strike out most of the time

Just a note that the first four minutes are very skippable.:) (I did the interview; trust me on this.) But Marc went on to answer lots of questions about the current industry and his firm specifically. A guide to the conversation that we published at TechCrunch and which might be useful here: ----- To start, Twitter stuff. Andreessen suggests he left for now owing to today’s highly politicized environment, saying he feels “free as a bird” as a result. At 4:00: We talk about whether he still believes that there are 15 companies per year that will go on to create at least $100 million in annual revenue (and that those are the firms top VCs must back to stay on top). It’s the thesis around which Andreessen’s venture firm, Andreessen Horowitz, was founded in 2009. My question more specifically is whether that number has grown larger or smaller or remained static. Around 9:00: I asked if more of the winners — no matter their number — are being created outside of the U.S., Silicon Valley-focused Andreessen Horowitz is perhaps missing them. At the 11:20 mark: Here, Andreessen answers whether too much money is finding its way to Silicon Valley and what the impact might be if so. At 16 minutes: Andreessen answers why today’s private companies — which Andreessen has argued can better compete with public companies (versus other public companies) — won’t run into the same exact constraints as their public company counterparts when they eventually go public, too. At 18.5 minutes: Here, I bring up Bill Gurley’s recent theorizing that once Uber goes public, it will be expected to be profitable, and its well-subsidized, still-private competitors will undercut it on price and try to steal market share. I ask whether this is a concern for Andreessen-backed Lyft and others of its portfolio companies. At 22 minutes (ish): Andreessen talks about why it’s easier but not absolutely necessary for founders to implement a dual-class structure in order to maintain control of their companies once public. Approaching 23:30 minutes: I’ve just asked Andreessen why, despite an uptick in M&A by nontraditional tech acquirers (think General Motors and the many private equity firms to go shopping this year), we aren’t seeing more acquisitions by Google, Facebook, or Amazon. 28:00: Now we’re getting into specific questions about Andreessen Horowitz, starting with whether or not Andreessen thinks the firm changed the game on the field by paying more for deals than Silicon Valley investors had ever seen. At 31:30: I note that Andreessen Horowitz missed what seems to be the biggest winner of the last decade: Uber. I ask how that impacts the firm. He doesn’t love this particular question, and steers the conversation down the path of why it makes sense to lead more than one round in a winner (which also came up in my question). At 35:00: I reference a 2015 New Yorker profile of Andreessen, which noted the daunting amount of capital the firm will need to produce for investors who’ve given the firm a whopping $6.2 billion, assuming they expect a venture-like 5x to 10x return. He tells me the firm is “elephant hunting,” a firm he has used frequently to describe Andreessen Horowitz’s investing style. (Evidently, that explanation is sufficiently convincing to the firm’s investors for now.) Around 35:30: Here, I ask a question about whether or not he thinks Andreessen-backed Airbnb could possibly catch up to the valuation of Uber. (Btw, in the course of this answer, he says that Andreessen Horowitz has backed Airbnb “primarily in one round,” so make of that what you will. TC has reported that Airbnb is currently raising another humongous round.) Astute listeners might also note that in a reference to Sequoia Capital’s Alfred Lin, I accidentally refer to him as “Alfred Lee.” I sometimes have verbal dyslexia. 36:30: Has Andreessen Horowitz sold stakes via the secondary market? (He takes his time here, but the answer is yes. I missed the chance to ask where/when, because of his lengthy reply, though the WSJ has reported that the firm sold some of its shares in the ride-share company Lyft earlier this year. ) At 40:35: Andreessen talks here about the firm’s philosophy about selling after an IPO. (“Our LPS are very clear with us, which is that they’re paying us to manage private, not public, money.”) His answer is characteristically more nuanced than that, but it sounds like they distribute stock to their investors faster than other VCs might. At 42:15: I share an observation that I’ve heard from entrepreneurs, which is that they are sometimes disappointed by how little time they get with the AH partner who leads the investment in their company, and that they are sometimes passed off to non-investing partners quickly (and sometimes, those non-investing partners’ junior staffers). He responds. At 45 minutes: The WSJ recently reported that AH’s returns trail those of other firms, but because it’s frankly too soon to know how it will stack up, here I ask Andreessen how he measures the firm’s success in the meantime, and what makes him think his firm’s whole agency-style network set-up is working. At 48:30: Here, I ask how AH decides to pull the plug on an investment. 51:20: This is the last question (I was dinged by an assistant for running over our allotted time): Andreessen, whose son was born last year, answers how fatherhood has surprised him.