![]() ![]() We talk about what hedge funds do, and the intersection between hedge funds and fair disclosure. We take them through Sarbanes-Oxley, financial disclosure, patent laws, antitrust. We take companies through what we call the parade of horrors-all the stuff that happens to a public company. So walk us through getting to an IPO today. They were largely just press releases on their way to an IPO. One was “Grow big or go home.” The other was “Forget details, just do deals.” The second one got them into trouble because some of their companies had very little substance. One of the local VCs had two mottoes in 1999. Our entrepreneurs are therefore almost completely focused on the substance of what they’re doing-as opposed to what happened in 1999, when everyone tried to take companies public in two years on the basis of a lot of hype. You build a company that’s so big and powerful and well defended that it can withstand the pressures of being public. I tell them they shouldn’t even think about going public until they’ve built what I call a fortress. In the meantime, how do you prepare them for that moment? I tell our entrepreneurs, “If you build a big successful independent company, at some point you almost certainly will go public.” As venture capitalists, we have a 13-year lockup on our money, so we take “long term” seriously. What does that mean for investors like you? One symptom of the hangover is that fewer start-ups are doing IPOs. But if you’re afraid to make any investments that might be stupid, you’ll never get any big winners-because the big outlier winners tend to look crazy at the start. I get these things as wrong as anybody else. The problem is that you never know which ones are which. It’s in the nature of venture capital and start-up investing that there are always stupid investments. But given the history of these things, this is probably a good time to get in.ĭo you see the danger of a new bubble out there? We started our firm in 2009, after probably the worst 10 years ever in venture capital. But current attitudes are very much based on what happened in the past. The rational thing is to focus on the future, not the past. The minute anything starts to show even a little bit of life, they say, “Oh, my God, it’s another bubble!”Īre you saying that the general view of the market is irrational? Everybody’s hypersensitive about another bubble. It’s similar to what happened after the Great Depression: Not until the 1950s did people really start focusing again on the stock market. It’s a really big deal, especially for anybody over age 35. To what extent is the start-up business still hungover from the last boom and bust in tech stocks? We don’t spend a lot of time trying to teach CEOs to be innovators. ![]() We think CEOs can be taught, so we specialize in training innovators to become CEOs. ![]() We work with our companies when they absolutely have to do this, but it’s very challenging.Ĭan entrepreneurs be taught? Or are the skills innate? It’s hard to pair a product innovator with a business partner-or to partner the founder with an outside CEO-and have them get anywhere. If they fall down on any of those three fronts, generally it’s a casualty.ĭo all those skills really have to reside in one person? When people like that actually deliver and work hard for 10 years, the results are miraculous. We’re trying to find a product innovator who is entrepreneurial and wants to start a company, and who also has the bandwidth and discipline to become a CEO. HBR: How would you characterize the best entrepreneurs you work with?Īndreessen: We aim for a trifecta in the people we want to back. In this edited interview with HBR’s editor in chief, Adi Ignatius, Andreessen talks about the complex challenges entrepreneurs now face and an investment opportunity that slipped away. ![]() Now he’s a cofounder and partner of Andreessen Horowitz, a Menlo Park venture capital fund that’s trying to make smart bets on tech start-ups in a climate much icier than the one during the dot-com boom. Within 18 months the enterprise had gone public and Andreessen had become a symbol of the internet generation. As freshly minted university graduates in the 1990s, he and his partners went hat in hand to venture capitalists in Silicon Valley to fund their new project, the breakthrough web browser Netscape Navigator. Marc Andreessen knows both sides of the start-up game. ![]()
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