Many undertaking industry observers have wondered if Andreessen Horowitz, a firm that manages $ 45 billion, has its footage to finally become a company publicly traded.
Co -founder Marc Andreessen said he is not “having to get the firm’s public” in investing this week as the best podcast. But he discussed his goal of building A16Z in a sustainable company, extracting inspiration from JP Morgan and publicly trading private capital firms.
Historically, entrepreneurship capital firms have been partnerships consisting of a “small tribe of people sitting in a room together, trying to dance one -another’s ideas when making investments,” Andreessen said in Podcast.
The problem with the partnership model, he said, is that he is very dependent on the ideas and expertise of those people at the table with “no fundamental value of wealth”, as he described. Once the original partners retire, the firm loses its value, even if a new generation of investors takes over.
“But even if they can continue it, there is no fundamental value of wealth. That future generation will have to hand it over to the third generation,” he said. “This will probably fail in the third generation. It will be one day on Wikipedia: that firm existed, and then it left.”
The partnership model can be profitable. The billions of A16Z under management generate significant money management fees for the firm, in addition to profits made when its investments succeed.
However, Andreessen said he constantly remembers internal staff and limited partners that the company is not raising money just to reap the tariffs. It is to give the company money ready to invest in growing companies.
“When we go to the scale, this is because we think it is necessary to support the types of companies we want to help our founders build,” he said.
Andreessen says his biggest goal for A16Z is to create a lasting company. One alternative to a partnership is to build an investment company that is managed as a business, which means there is management, numerous staff layers, sharing work with specializations and training programs, said Andreessen.
Of course there are precedents of small partnerships that evolve into large corporations, which Andereessen can use as a model for A16Z ambitions.
“Goldman Sachs and JP Morgan, 100 years ago, looked like small venture capital firms,” he said. “Then their leaders, over time, turned them into large exclusivities and large public companies.”
He also appointed other examples of private partnerships were transformed into large companies publicly traded as large private capital firms. Blackstone, who now has a market capitalization of over $ 200 billion, was released in 2007. Apollo, KKR and Carlyle held their IPO immediately after Blackstone, and TPG listed in Nasdaq in early 2022.
Andreessen argues that as these companies grew from partnerships in large corporations, their long -term success became less dependent on some key investors.
“A large part of what we have tried to do is build something that has that kind of enduring aspect to it,” he said.
In many ways, Andreessen Horowitz already looks more like an operating company than many VC firms. A16Z has dozens of people in its marketing group and large teams that help portfolio companies recruit talent and sell their products. The firm runs separated cryptocurrencies, bio and health strategies, and American dynamism.
But there is probably another reason that Andreessen is inclined to restructure away from the classic VC system. When it comes to partnerships, he says, “actually results in most cases, what you find out is that people actually dislike each other.”
