venture capitalist blog post
https://medium.com/sequoia-capital/coronavirus-the-black-swan-of-2020-7c72bdeb9753
Coronavirus: The Black Swan of 2020
2020-10-27
Sequoia
<div><div><figure></figure><p><em>Here is a note that we sent to Sequoia founders and CEOs today to provide guidance on how to ensure the health of their business while dealing with potential business consequences of the spreading effects of the coronavirus.</em></p><p>Dear Founders &amp; CEOs,</p><p>Coronavirus is the black swan of 2020. Some of you (and some of us) have already been personally impacted by the virus. We know the stress you are under and are here to help. With lives at risk, we hope that conditions improve as quickly as possible. In the interim, we should brace ourselves for turbulence and have a prepared mindset for the scenarios that may play out.</p><p>All of you have been inundated by suggestions for precautions to take around COVID-19 to protect the health and welfare of you, your employees, and your families. Like many, we have studied the available information and would be happy to share our point of view — please let us know if that is of interest. This note is about something else: ensuring the health of your business while dealing with potential business consequences of the spreading effects of the virus.</p><p>Unfortunately, because of Sequoia’s presence in many regions around the world, we are gaining first-hand knowledge of coronavirus’ effects on global business. As with all crises, there are some businesses that stand to benefit. However, many companies in frontline countries are facing challenges as a result of the virus outbreak, including:</p><ul><li><strong>Drop in business activity. </strong>Some companies have seen their growth rates drop sharply between December and February. Several companies that were on track are now at risk of missing their Q1–2020 plans as the effects of the virus ripple wider.</li><li><strong>Supply chain disruptions.</strong> The unprecedented lockdown in China is directly impacting global supply chains. Hardware, direct-to-consumer, and retailing companies may need to find alternative suppliers. Pure software companies are less exposed to supply chain disruptions, but remain at risk due to cascading economic effects.</li><li><strong>Curtailment of travel and canceled meetings.</strong> Many companies have banned all “non-essential” travel and some have banned all international travel. While travel companies are directly impacted, all companies that depend on in-person meetings to conduct sales, business development, or partnership discussions are being affected.</li></ul><p>It will take considerable time — perhaps several quarters — before we can be confident that the virus has been contained. It will take even longer for the global economy to recover its footing. Some of you may experience softening demand; some of you may face supply challenges. While The Fed and other central banks can cut interest rates, monetary policy may prove a blunt tool in alleviating the economic ramifications of a global health crisis.</p><p>We suggest you question every assumption about your business, including:</p><ol><li><strong>Cash runway.</strong> Do you really have as much runway as you think? Could you withstand a few poor quarters if the economy sputters? Have you made contingency plans? Where could you trim expenses without fundamentally hurting the business? Ask these questions now to avoid potentially painful future consequences.</li><li><strong>Fundraising.</strong> Private financings could soften significantly, as happened in 2001 and 2009. What would you do if fundraising on attractive terms proves difficult in 2020 and 2021? Could you turn a challenging situation into an opportunity to set yourself up for enduring success? Many of the most iconic companies were forged and shaped during difficult times. We partnered with Cisco shortly after Black Monday in 1987. Google and PayPal soldiered through the aftermath of the dot-com bust. More recently, Airbnb, Square, and Stripe were founded in the midst of the Global Financial Crisis. Constraints focus the mind and provide fertile ground for creativity.</li><li><strong>Sales forecasts.</strong> Even if you don’t see any direct or immediate exposure for your company, anticipate that your customers may revise their spending habits. Deals that seemed certain may not close. The key is to not be caught flat-footed.</li><li><strong>Marketing.</strong> With softening sales, you might find that your customer lifetime values have declined, in turn suggesting the need to rein in customer acquisition spending to maintain consistent returns on marketing spending. With greater economic and fundraising uncertainty, you might even want to consider raising the bar on ROI for marketing spend.</li><li><strong>Headcount.</strong> Given all of the above stress points on your finances, this might be a time to evaluate critically whether you can do more with less and raise productivity.</li><li><strong>Capital spending.</strong> Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment. Perhaps there is no reason to change plans and, for all you know, changing circumstances may even present opportunities to accelerate. But these are decisions that should be deliberate.</li></ol><p>Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive “are not the strongest or the most intelligent, but the most adaptable to change.”</p><p>A distinctive feature of enduring companies is the way their leaders react to moments like these. Your employees are all aware of COVID-19 and are wondering how you will react and what it means for them. False optimism can easily lead you astray and prevent you from making contingency plans or taking bold action. Avoid this trap by being clinically realistic and acting decisively as circumstances change. Demonstrate the leadership your team needs during this stressful time.</p><p>Here is some perspective from our partner Alfred Lin, who lived through another black swan moment as an operating executive:</p><blockquote><p>“I was serving as the COO/CFO of Zappos when I was summoned to Sequoia’s office for the infamous <a href="https://www.sequoiacap.com/article/rip-good-times">R.I.P. Good Times presentation</a> in 2008, prior to the financial crisis. We didn’t know then, just like we don’t know now, how long or how sharp or shallow of a downturn we will face. What I can confirm is that the presentation made our team and our business stronger. Zappos emerged from the financial crisis ready to seize on opportunities after our competitors had been battered and bruised.”</p></blockquote><p>Stay healthy, keep your company healthy, and put a dent in the world.</p><p>Best,</p><p>Team Sequoia</p></div>||||I|||| Published in

 Sequoia Capital Publication

 Sequoia
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 Mar 5, 2020

 ·
 5 min read

 Coronavirus: The Black Swan of 2020

 Here is a note that we sent to Sequoia founders and CEOs today to provide guidance on how to ensure the health of their business while dealing with potential business consequences of the spreading effects of the coronavirus.

 Dear Founders & CEOs,

 Coronavirus is the black swan of 2020. Some of you (and some of us) have already been personally impacted by the virus. We know the stress you are under and are here to help. With lives at risk, we hope that conditions improve as quickly as possible. In the interim, we should brace ourselves for turbulence and have a prepared mindset for the scenarios that may play out.

 All of you have been inundated by suggestions for precautions to take around COVID-19 to protect the health and welfare of you, your employees, and your families. Like many, we have studied the available information and would be happy to share our point of view — please let us know if that is of interest. This note is about something else: ensuring the health of your business while dealing with potential business consequences of the spreading effects of the virus.

 Unfortunately, because of Sequoia’s presence in many regions around the world, we are gaining first-hand knowledge of coronavirus’ effects on global business. As with all crises, there are some businesses that stand to benefit. However, many companies in frontline countries are facing challenges as a result of the virus outbreak, including:

 * Drop in business activity. Some companies have seen their growth rates drop sharply between December and February. Several companies that were on track are now at risk of missing their Q1–2020 plans as the effects of the virus ripple wider.
 * Supply chain disruptions. The unprecedented lockdown in China is directly impacting global supply chains. Hardware, direct-to-consumer, and retailing companies may need to find alternative suppliers. Pure software companies are less exposed to supply chain disruptions, but remain at risk due to cascading economic effects.
 * Curtailment of travel and canceled meetings. Many companies have banned all “non-essential” travel and some have banned all international travel. While travel companies are directly impacted, all companies that depend on in-person meetings to conduct sales, business development, or partnership discussions are being affected.

 It will take considerable time — perhaps several quarters — before we can be confident that the virus has been contained. It will take even longer for the global economy to recover its footing. Some of you may experience softening demand; some of you may face supply challenges. While The Fed and other central banks can cut interest rates, monetary policy may prove a blunt tool in alleviating the economic ramifications of a global health crisis.

 We suggest you question every assumption about your business, including:

 1. Cash runway. Do you really have as much runway as you think? Could you withstand a few poor quarters if the economy sputters? Have you made contingency plans? Where could you trim expenses without fundamentally hurting the business? Ask these questions now to avoid potentially painful future consequences.
 2. Fundraising. Private financings could soften significantly, as happened in 2001 and 2009. What would you do if fundraising on attractive terms proves difficult in 2020 and 2021? Could you turn a challenging situation into an opportunity to set yourself up for enduring success? Many of the most iconic companies were forged and shaped during difficult times. We partnered with Cisco shortly after Black Monday in 1987. Google and PayPal soldiered through the aftermath of the dot-com bust. More recently, Airbnb, Square, and Stripe were founded in the midst of the Global Financial Crisis. Constraints focus the mind and provide fertile ground for creativity.
 3. Sales forecasts. Even if you don’t see any direct or immediate exposure for your company, anticipate that your customers may revise their spending habits. Deals that seemed certain may not close. The key is to not be caught flat-footed.
 4. Marketing. With softening sales, you might find that your customer lifetime values have declined, in turn suggesting the need to rein in customer acquisition spending to maintain consistent returns on marketing spending. With greater economic and fundraising uncertainty, you might even want to consider raising the bar on ROI for marketing spend.
 5. Headcount. Given all of the above stress points on your finances, this might be a time to evaluate critically whether you can do more with less and raise productivity.
 6. Capital spending. Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment. Perhaps there is no reason to change plans and, for all you know, changing circumstances may even present opportunities to accelerate. But these are decisions that should be deliberate.

 Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive “are not the strongest or the most intelligent, but the most adaptable to change.”

 A distinctive feature of enduring companies is the way their leaders react to moments like these. Your employees are all aware of COVID-19 and are wondering how you will react and what it means for them. False optimism can easily lead you astray and prevent you from making contingency plans or taking bold action. Avoid this trap by being clinically realistic and acting decisively as circumstances change. Demonstrate the leadership your team needs during this stressful time.

 Here is some perspective from our partner Alfred Lin, who lived through another black swan moment as an operating executive:

 “I was serving as the COO/CFO of Zappos when I was summoned to Sequoia’s office for the infamous R.I.P. Good Times presentation in 2008, prior to the financial crisis. We didn’t know then, just like we don’t know now, how long or how sharp or shallow of a downturn we will face. What I can confirm is that the presentation made our team and our business stronger. Zappos emerged from the financial crisis ready to seize on opportunities after our competitors had been battered and bruised.”

 Stay healthy, keep your company healthy, and put a dent in the world.

 Best,

 Team Sequoia

 Covid 19
 Coronavirus
 Startup
 Sequoia Perspectives

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Here is a note that we sent to Sequoia founders and CEOs today to provide guidance on how to ensure the health of their business while dealing with potential business consequences of the spreading effects of the coronavirus.  Dear Founders &amp; CEOs, Coronavirus is the black swan of 2020. Some of you (and some of us) have already been personally impacted by the virus. We know the stress you are under and are here to help. With lives at risk, we hope that conditions improve as quickly as possible. In the interim, we should brace ourselves for turbulence and have a prepared mindset for the scenarios that may play out. All of you have been inundated by suggestions for precautions to take around COVID-19 to protect the health and welfare of you, your employees, and your families. Like many, we have studied the available information and would be happy to share our point of view — please let us know if that is of interest. This note is about something else: ensuring the health of your business while dealing with potential business consequences of the spreading effects of the virus. Unfortunately, because of Sequoia’s presence in many regions around the world, we are gaining first-hand knowledge of coronavirus’ effects on global business. As with all crises, there are some businesses that stand to benefit. However, many companies in frontline countries are facing challenges as a result of the virus outbreak, including:   Drop in business activity. Some companies have seen their growth rates drop sharply between December and February. Several companies that were on track are now at risk of missing their Q1–2020 plans as the effects of the virus ripple wider.  Supply chain disruptions. The unprecedented lockdown in China is directly impacting global supply chains. Hardware, direct-to-consumer, and retailing companies may need to find alternative suppliers. Pure software companies are less exposed to supply chain disruptions, but remain at risk due to cascading economic effects.  Curtailment of travel and canceled meetings. Many companies have banned all “non-essential” travel and some have banned all international travel. While travel companies are directly impacted, all companies that depend on in-person meetings to conduct sales, business development, or partnership discussions are being affected.  It will take considerable time — perhaps several quarters — before we can be confident that the virus has been contained. It will take even longer for the global economy to recover its footing. Some of you may experience softening demand; some of you may face supply challenges. While The Fed and other central banks can cut interest rates, monetary policy may prove a blunt tool in alleviating the economic ramifications of a global health crisis. We suggest you question every assumption about your business, including:   Cash runway. Do you really have as much runway as you think? Could you withstand a few poor quarters if the economy sputters? Have you made contingency plans? Where could you trim expenses without fundamentally hurting the business? Ask these questions now to avoid potentially painful future consequences.  Fundraising. Private financings could soften significantly, as happened in 2001 and 2009. What would you do if fundraising on attractive terms proves difficult in 2020 and 2021? Could you turn a challenging situation into an opportunity to set yourself up for enduring success? Many of the most iconic companies were forged and shaped during difficult times. We partnered with Cisco shortly after Black Monday in 1987. Google and PayPal soldiered through the aftermath of the dot-com bust. More recently, Airbnb, Square, and Stripe were founded in the midst of the Global Financial Crisis. Constraints focus the mind and provide fertile ground for creativity.  Sales forecasts. Even if you don’t see any direct or immediate exposure for your company, anticipate that your customers may revise their spending habits. Deals that seemed certain may not close. The key is to not be caught flat-footed.  Marketing. With softening sales, you might find that your customer lifetime values have declined, in turn suggesting the need to rein in customer acquisition spending to maintain consistent returns on marketing spending. With greater economic and fundraising uncertainty, you might even want to consider raising the bar on ROI for marketing spend.  Headcount. Given all of the above stress points on your finances, this might be a time to evaluate critically whether you can do more with less and raise productivity.  Capital spending. Until you have charted a course to financial independence, examine whether your capital spending plans are sensible in a more uncertain environment. Perhaps there is no reason to change plans and, for all you know, changing circumstances may even present opportunities to accelerate. But these are decisions that should be deliberate.  Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive “are not the strongest or the most intelligent, but the most adaptable to change.” A distinctive feature of enduring companies is the way their leaders react to moments like these. Your employees are all aware of COVID-19 and are wondering how you will react and what it means for them. False optimism can easily lead you astray and prevent you from making contingency plans or taking bold action. Avoid this trap by being clinically realistic and acting decisively as circumstances change. Demonstrate the leadership your team needs during this stressful time. Here is some perspective from our partner Alfred Lin, who lived through another black swan moment as an operating executive:  “I was serving as the COO/CFO of Zappos when I was summoned to Sequoia’s office for the infamous R.I.P. Good Times presentation in 2008, prior to the financial crisis. We didn’t know then, just like we don’t know now, how long or how sharp or shallow of a downturn we will face. What I can confirm is that the presentation made our team and our business stronger. Zappos emerged from the financial crisis ready to seize on opportunities after our competitors had been battered and bruised.”  Stay healthy, keep your company healthy, and put a dent in the world. Best, Team Sequoia
Coronavirus: The Black Swan of 2020
https://medium.com/sequoia-capital/coronavirus-the-black-swan-of-2020-7c72bdeb9753
https://avc.com/2020/11/the-covid-rotation/
The Covid Rotation - AVC
2020-11-10
Fred Wilson
<div><div>
<p>Yesterday morning we got the news that Pfizer’s mRNA Covid vaccine developed in partnership with BioNTech saw 90% efficacy in phase three clinical trials. While this is terrific news, Wall Street saw it as bad news for companies that are doing well during this pandemic (Zoom, Peloton, e-commerce, etc).</p>
<p>This is a chart of Jim Cramer’s Covid 100 index:</p>
<figure></figure>
<p>Wall Street believes the end of the Covid pandemic is in sight and is rotating out of this group. I see that as terrific news, even though I am a large holder of a name or two in that index.</p>
<p>I cannot wait until I can start meeting entrepreneurs again in person. I cannot wait until USV can meet together in person. I cannot wait until I can see live music, movies, theater, etc, etc. These things cannot come soon enough for me.</p>
<p>But I also wonder how many of the habits we acquired during this pandemic (which is NOT over yet), will stick when we can go back to doing all of these things we long to do.</p>
<p>Here are some questions to ponder:</p>
<p>1/ Will our use of Zoom to meet decline materially when the pandemic is over?</p>
<p>2/ Will we get back on planes and resume our business travel like we did before the pandemic?</p>
<p>3/ Will we go back to the spin studio even though we learned to love a spin class on our Peloton?</p>
<p>4/ Will we rush back to stores and abandon our e-commerce habits?</p>
<p>5/ Will we all go back to the office five days a week?</p>
<p>I think the answer is yes to a degree, but almost certainly not totally. We have created new habits in this awful year and they are not going to go away so quickly, or ever.</p>
<p>I don’t know if that means the Covid 100 index is a buying opportunity or it needs to go down some more. I will leave that to Jim Cramer. </p>
<p>I do know that the way we work and live and entertain ourselves has changed materially and forever in this pandemic and things won’t be exactly the same when it is over.</p>
</div>||||I|||| Menu
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 Nov 10, 2020

 The Covid Rotation

 Yesterday morning we got the news that Pfizer’s mRNA Covid vaccine developed in partnership with BioNTech saw 90% efficacy in phase three clinical trials. While this is terrific news, Wall Street saw it as bad news for companies that are doing well during this pandemic (Zoom, Peloton, e-commerce, etc).

 This is a chart of Jim Cramer’s Covid 100 index:

 Wall Street believes the end of the Covid pandemic is in sight and is rotating out of this group. I see that as terrific news, even though I am a large holder of a name or two in that index.

 I cannot wait until I can start meeting entrepreneurs again in person. I cannot wait until USV can meet together in person. I cannot wait until I can see live music, movies, theater, etc, etc. These things cannot come soon enough for me.

 But I also wonder how many of the habits we acquired during this pandemic (which is NOT over yet), will stick when we can go back to doing all of these things we long to do.

 Here are some questions to ponder:

 1/ Will our use of Zoom to meet decline materially when the pandemic is over?

 2/ Will we get back on planes and resume our business travel like we did before the pandemic?

 3/ Will we go back to the spin studio even though we learned to love a spin class on our Peloton?

 4/ Will we rush back to stores and abandon our e-commerce habits?

 5/ Will we all go back to the office five days a week?

 I think the answer is yes to a degree, but almost certainly not totally. We have created new habits in this awful year and they are not going to go away so quickly, or ever.

 I don’t know if that means the Covid 100 index is a buying opportunity or it needs to go down some more. I will leave that to Jim Cramer.

 I do know that the way we work and live and entertain ourselves has changed materially and forever in this pandemic and things won’t be exactly the same when it is over.

 Discuss on Twitter
 View Discussions
 #Current Affairs#stocks
 Previous Post
 Next Post
Yesterday morning we got the news that Pfizer’s mRNA Covid vaccine developed in partnership with BioNTech saw 90% efficacy in phase three clinical trials. While this is terrific news, Wall Street saw it as bad news for companies that are doing well during this pandemic (Zoom, Peloton, e-commerce, etc).
This is a chart of Jim Cramer’s Covid 100 index:
 
Wall Street believes the end of the Covid pandemic is in sight and is rotating out of this group. I see that as terrific news, even though I am a large holder of a name or two in that index.
I cannot wait until I can start meeting entrepreneurs again in person. I cannot wait until USV can meet together in person. I cannot wait until I can see live music, movies, theater, etc, etc. These things cannot come soon enough for me.
But I also wonder how many of the habits we acquired during this pandemic (which is NOT over yet), will stick when we can go back to doing all of these things we long to do.
Here are some questions to ponder:
1/ Will our use of Zoom to meet decline materially when the pandemic is over?
2/ Will we get back on planes and resume our business travel like we did before the pandemic?
3/ Will we go back to the spin studio even though we learned to love a spin class on our Peloton?
4/ Will we rush back to stores and abandon our e-commerce habits?
5/ Will we all go back to the office five days a week?
I think the answer is yes to a degree, but almost certainly not totally. We have created new habits in this awful year and they are not going to go away so quickly, or ever.
I don’t know if that means the Covid 100 index is a buying opportunity or it needs to go down some more. I will leave that to Jim Cramer. 
I do know that the way we work and live and entertain ourselves has changed materially and forever in this pandemic and things won’t be exactly the same when it is over.
The Covid Rotation - AVC
https://avc.com/2020/11/the-covid-rotation/
https://avc.com/category/science/
Science Archives - AVC
2020-01-01
None
<div><div>
<h2> Posts from Science</h2>
<article>
<time>Jan 1, 2020</time>
<h2>
<a href="https://avc.com/2020/01/what-will-happen-in-the-2020s/">What Will Happen In The 2020s</a>
</h2>
<div>
<p>It’s 2020. Time to look forward to the decade that is upon us. </p>
<p>One of my favorite quotes, attributed to Bill Gates, is that people overestimate what will happen in a year and underestimate what will happen in a decade.</p>
<p>This is an important decade for mankind. It is a decade in which we will need to find answers to questions that hang over us like last night’s celebrations.</p>
<p>I am an optimist and believe in society’s ability to find the will to face our challenges and the intelligence to find solutions to them.</p>
<p>So, I am starting out 2020 in an optimistic mood and here are some predictions for the decade that we are now in.</p>
<p>1/ The looming climate crisis will be to this century what the two world wars were to the previous one. It will require countries and institutions to re-allocate capital from other endeavors to fight against a warming planet. This is the decade we will begin to see this re-allocation of capital. We will see carbon taxed like the vice that it is in most countries around the world this decade, including in the US. We will see real estate values collapse in some of the most affected regions and we will see real estate values increase in regions that benefit from the warming climate. We will see massive capital investments made in protecting critical regions and infrastructure. We will see nuclear power make a resurgence around the world, particularly smaller reactors that are easier to build and safer to operate. We will see installed solar power worldwide go from ~650GW currently to over 20,000GW by the end of this decade. All of these things and many more will cause the capital markets to focus on and fund the climate issue to the detriment of many other sectors.</p>
<p>2/ Automation will continue to take costs out of operating many of the services and systems that we rely on to live and be productive. The fight for who should have access to this massive consumer surplus will define the politics of the 2020s. We will see capitalism come under increasing scrutiny and experiments to reallocate wealth and income more equitably will produce a new generation of world leaders who ride this wave to popularity.</p>
<p>3/ China will emerge as the world’s dominant global superpower leveraging its technical prowess and ability to adapt quickly to changing priorities (see #1). Conversely the US becomes increasingly internally focused and isolationist in its world view.</p>
<p>4/ Countries will create and promote digital/crypto versions of their fiat currencies, led by China who moves first and benefits the most from this move. The US will be hamstrung by regulatory restraints and will be slow to move, allowing other countries and regions to lead the crypto sector. Asian crypto exchanges, unchecked by cumbersome regulatory restraints in Europe and the US and leveraging decentralized finance technologies, will become the dominant capital markets for all types of financial instruments.</p>
<p>5/ A decentralized internet will emerge, led initially by decentralized infrastructure services like storage, bandwidth, compute, etc. The emergence of decentralized consumer applications will be slow to take hold and a killer decentralized consumer app will not emerge until the latter part of the decade.</p>
<p>6/ Plant based diets will dominate the world by the end of the decade. Eating meat will become a delicacy, much like eating caviar is today. Much of the world’s food production will move from farms to laboratories.</p>
<p>7/ The exploration and commercialization of space will be dominated by private companies as governments increasingly step back from these investments. The early years of this decade will produce a wave of hype and investment in the space business but returns will be slow to come and we will be in a trough of disillusionment on the space business as the decade comes to an end.</p>
<p>8/ Mass surveillance by governments and corporations will become normal and expected this decade and people will increasingly turn to new products and services to protect themselves from surveillance. The biggest consumer technology successes of this decade will be in the area of privacy.</p>
<p>9/ We will finally move on from the Baby Boomers dominating the conversation in the US and around the world and Millennials and Gen-Z will be running many institutions by the end of the decade. Age and experience will be less valued by shareholders, voters, and other stakeholders and vision and courage will be valued more.</p>
<p>10/ Continued advancements in genetics will produce massive wins this decade as cancer and other terminal illnesses become well understood and treatable. Fertility and reproduction will be profoundly changed. Genetics will also create new diseases and moral/ethical issues that will confound and confuse society. Balancing the gains and losses that come from genetics will be our greatest challenge in this decade.</p>
<p>That’s ten predictions, enough for now and enough for me. I hope I made you think as much as I made myself think writing this. That’s the goal. It is impossible to be right about all of this. But it is important to be thinking about it.</p>
<p>I know that comments here at AVC are broken at the moment and so I look forward to the conversation on email and Twitter and elsewhere.</p>
</div>
</article>
<article>
<time>May 24, 2019</time>
<h2>
<a href="https://avc.com/2019/05/funding-friday-planetary-blocks/">Funding Friday: Planetary Blocks</a>
</h2>
<div>
<p>I backed this project to make a block toys for kids based on the planetary system a few weeks ago.</p>
<p>I am into anything that makes learning fun for kids and this definitely does that.</p>
<p>You can <a href="https://www.kickstarter.com/projects/chopshopstore/planetary-blocks-our-solar-system">back it here</a>.</p>
</div>
</article>
<article>
<time>Dec 15, 2018</time>
<h2>
<a href="https://avc.com/2018/12/audio-of-the-week-mythology-was-the-first-science-fiction/">Audio Of The Week: Mythology Was The First Science Fiction</a>
</h2>
<div>
<p>I loved this A16Z podcast featuring <a href="https://twitter.com/amayor">Adrienne Mayor</a> who recently authored “<a href="https://www.amazon.com/Gods-Robots-Machines-Ancient-Technology/dp/B07K7T9KS3/">Gods &amp; Robots: Myths, Machines, and Ancient Dreams of Technology</a>“. Early in this podcast Adrienne states that mythology was the first science fiction and then she goes on to explain why. It’s a fun and educational listen. My favorite kind.</p>
</div>
</article>
<article>
<time>Aug 21, 2017</time>
<h2>
<a href="https://avc.com/2017/08/sunblock/">Sunblock</a>
</h2>
<div>
<p>From roughly 1pm ET to roughly 3pm ET today there will be an eclipse of the Sun by the Moon over the US.</p>
<p>I like this map which shows when and where the eclipse will take place:</p>
<p></p>
<p>I spent a half hour this morning on the Internet and learned everything I wanted to know about what is happening and why.</p>
<p>I wonder how the earliest inhabitants of planet Earth must have felt when the sky went dark for a few minutes in the middle of the day.</p>
<p>Mankind has learned a lot about the universe we inhabit over the years and that knowledge is now largely available online for anyone to browse and learn from, as I did this morning. Here’s <a href="https://quizlet.com/217564660/august-21-total-solar-map-diagram/">a study set</a> based on today’s eclipse from <a href="https://quizlet.com/">Quizle</a>t (a USV portfolio company) which uses their new diagramming feature.</p>
<p>It is a wonderful time to be alive with so much knowledge at our fingertips.</p>
 </div>
</article>
<article>
<time>Apr 9, 2017</time>
<h2>
<a href="https://avc.com/2017/04/decentralized-self-organizing-systems/">Decentralized Self-Organizing Systems</a>
</h2>
<div>
<p>Mankind has been inventing new ways to organize and govern since we showed up on planet earth. Our history is a gradual evolution of these organization and governance systems. Much of what we are using right now was invented in ancient Greece and perfected in western Europe in the 17th, 18th, and 19th centuries.</p>
<p>I have been thinking for some time that we are on the cusp of something new. I don’t know exactly what it will be but I think it will be inspired by the big technological innovations of the late 20th century and early 21st century and it will be based on decentralized and self-organizing systems.</p>
<p>The Internet is, at its core, a scaled decentralized system. Its design has been a resounding success. It has scaled elegantly and gradually to well over 2bn users over fifty years. No central entity controls the Internet and it upgrades itself and scales itself slowly over time.</p>
<p>Open source software development communities are also an important development of the past fifty years. These communities come together to create and maintain new software systems and are not financed or governed by traditional corporate models. The goals of these communities are largely based on delivering new capabilities to the market and they don’t have capitalist based incentive systems and they have shown that in many instances they work better than traditional corporate models, Linux being the best example.</p>
<p>And, for the past decade or so, we have seen that modern cryptography and some important computer science innovations have led to decentralized blockchain systems, most notably Bitcoin and Ethereum. But there are many more to study and learn from. These blockchain systems are pushing forward our understanding of economic models, governance models, and security models.</p>
<p>I think it is high time that political scientists, philosophers, economists, and historians turn their attention to these new self-organizing and self-governing systems. Maybe they have and I am not familiar with the work. If so, please point me to it. If not, maybe this post and others like it will be an inspiration for the liberal arts to catch up to the computer scientists and mathematicians or at least work closely with them to figure out what is next, to articulate it and put it in the context of other governance and economic systems. From that work can come progress that mankind needs to move beyond the current systems, which work, but have many flaws and are becoming stale and in need of an upgrade.</p>
</div>
</article>
<article>
<time>Jan 18, 2017</time>
<h2>
<a href="https://avc.com/2017/01/protecting-the-right-to-speak-and-write-and-blog/">Protecting The Right To Speak And Write And Blog</a>
</h2>
<div>
<p>I stayed out of the public debate and discussion of the Gawker lawsuit because while I privately came down on the side of Gawker, the specifics of the case made me uncomfortable and I don’t think it was an ideal case to determine what is free speech and what is not.</p>
<p>However, the same lawyer, Charles Harder, who argued the case against Gawker, is back with another libel suit, this time against <a href="https://www.techdirt.com/">Techdirt</a> and its founder and lead writer <a href="https://twitter.com/mmasnick">Mike Masnick</a>. Regular and longtime readers of this blog will know that I am friends with Mike and have supported his efforts to speak out on Techdirt about all sorts of tech policy issues over the years.</p>
<p>The specifics of the Techdirt case are easier for me to get excited about. Mike has consistently and rigorously debunked the claims of Dr. Shiva Ayyadurai that he (Dr Ayyadurai) “invented” e-mail. Dr. Ayyadurai is upset with Mike about this and so he hired Charles Harder to file a $15mm libel suit against Techdirt and Mike.</p>
<p>Regardless of whether Dr. Ayyadurai invented email or not (I highly doubt it), we have a long standing history in scientific and technical circles and in the United States of freely, openly, and publicly debating and discussing technical issues like this. Through that sort of public debate and discussion we determine what is real and what is not and we also move the understanding of science and technology forward. These public debates can get nasty and personal, and that is unfortunate, but I believe it is better that we allow for this debate than set legal precedent that wealthy people can stifle debate by suing publications out of business.</p>
<p>So, I am urging everyone who cares about the legacy of free, open, and public speech and debate about technical issues to support Mike and Techdirt’s efforts to defend themselves. Mike wrote <a href="https://www.techdirt.com/articles/20170111/11440836465/techdirts-first-amendment-fight-life.shtml">a blog post about this issue</a> last week and this is taken from that post:</p>
<blockquote><p><em>I am beyond thankful to the many of you who have reached out and offered to help in all sorts of ways. It is heartening to know so many people care about Techdirt. At some point soon, we may set up a dedicated legal defense fund. But, in the meantime, any support you can provide us will help — whether it’s just alerting people to this situation and the danger of trying to stifle a free press through meritless lawsuits, or it’s supporting Techdirt directly (or, if you have a company, <a href="https://www.techdirt.com/advertise.php">advertising with us</a>). As always, you can support us directly as <a href="https://rtb.techdirt.com/products/friend-of-techdirt/">a Friend of Techdirt</a>, or check out some of the other perks you can get in <a href="https://rtb.techdirt.com/">our Insider program</a>. You can also support us <a href="https://www.patreon.com/techdirt">via Patreon</a>.</em></p></blockquote>
<p>I am hoping that Mike sets up a dedicated legal defense fund and plan to contribute to it if he does. I will let AVC readers know if that happens. Until then, let’s all get behind Mike and put a stop to this nonsense.</p>
</div>
</article>
<article>
<time>May 22, 2016</time>
<h2>
<a href="https://avc.com/2016/05/experiment-and-scandal/">Experiment and Scandal</a>
</h2>
<div>
<p>We are living in a time of great experiments. They are not happening in the lab. They are happening in the real world. And they are being financed by real people. We are witnessing the de-institutionalization of experimentation. We are returning to a time when anyone can be an inventor and innovator. Some of this has happened because of the explosion of venture capital, both in the US and also around the world. Some of this has happened because entertainment and culture has embraced the world of experimentation and innovation (Shark Tank, Silicon Valley). Some of this has happened because the tools for innovation and experimentation have become mainstream and anyone can use them.</p>
<p>I am not thinking of one thing. I am thinking of many things. I am thinking of <a href="https://daohub.org/">The DAO</a>. I am thinking of Bitcoin and Ethereum. I am thinking of <a href="https://www.kickstarter.com/projects/1523379957/oculus-rift-step-into-the-game">Oculus getting financed on Kickstarter</a>. I am thinking of the launch of <a href="https://abcnews.go.com/Business/equity-crowdfunding/story?id=39142325">equity crowdfunding for everyone</a> in the US last week. I am even thinking of things like Theranos.</p>
<p>All of these things are great experiments that will produce great benefit to society if they succeed. But by their nature experiments often fail. They need to fail. Or they would not be experiments.</p>
<p>And one of the challenges with the de-institutionalization of experimentation is that some of these failures will be spectacular. Combine that with the idea that these experiments are being funded by real people and the idea that the world of media/entertainment/culture has injected itself right in the middle of this brave new world and you have the recipe for scandal. And scandal will naturally result in efforts to put the genie back in the bottle (Sarbanes Oxley, Dodd Frank). And these regulatory efforts will naturally attempt to re-institutionalize experimentation.</p>
<p>I find myself wishing we could keep the dollars invested and hype down when we do these massively public experiments. But the dollar/hype cycle is a natural part of being human. Some dollars are invested. We get excited about this investment. We talk it up. More people find out about it and more dollars are invested. More of us get excited about this investment and we talk it up more. Rinse, repeat, rinse, repeat and you get unicorns and distributed autonomous funding mechanisms entrusted with hundreds of millions before anything has even been funded. Eventually some of that gets unwound and the tape is full of red.</p>
<p>Don’t get me wrong. I am all for distributed autonomous organizations and the innovation behind them and in front of them. There isn’t much out there that I am more excited about. But I am also very fearful that this could end badly. And even more fearful of what may be foisted on us by well meaning regulators when that happens.</p>
<p>So let’s celebrate this incredible phase of permissionless innovation we are in. And let’s all understand that we will have many failures. Some of them spectacular. Money will be lost. Possibly hundreds of millions or billions. Let’s expect that. Let’s build that into our mental models. So when that happens, we can suck it up, deal with it, and keep moving forward. Because an open permissionless world of innovation that everyone can participate in is utopia in so many ways. The good that will come of it will massively outweigh any bad. But bad there will be. I can assure you of that.</p>
</div>
</article>
<article>
<time>Apr 26, 2014</time>
<h2>
<a href="https://avc.com/2014/04/video-of-the-week-simon-singh-on-confirmation-bias/">Video Of The Week: Simon Singh on Confirmation Bias</a>
</h2>
<div>
<p>My friend <a href="https://twitter.com/MarkGhuneim">Mark Ghuneim</a> sent me two books last week, <a href="https://www.amazon.com/The-Code-Book-Science-Cryptography/dp/0385495323/">Simon Singh’s The Code Book</a> and <a href="https://www.amazon.com/Secrets-Lies-Digital-Security-Networked/dp/0471453803/">Bruce Schneier’s Secrets and Lies</a>. I am reading The Code Book first and really enjoying it. So I went on YouTube this morning and started watching Simon Singh talks. There are <a href="https://www.youtube.com/results?search_query=simon+singh">a bunch of them</a>.</p>
<p>My favorite is this short (~6 mins) video where Simon demonstrates how the brain is susceptible to confirmation bias. It’s pretty great.</p>
<p></p>
</div>
</article>
<article>
<time>Dec 12, 2013</time>
<h2>
<a href="https://avc.com/2013/12/the-limits-of-capitalism/">The Limits of Capitalism</a>
</h2>
<div>
<p>I am a capitalist. Contrary to the occasional community members who call me a socialist or a techno communist, I believe wholeheartedly in the power of markets to efficently determine what's best in most cases.</p>
<p>But I am not an absolute capitalist. I believe that markets do break down from time to time and we need to recognize when those things happen and do something about it. The labor movement, when it was not corrupt for the most part, is an example of a societal response to a market breakdown.</p>
<p>When we stare into the future, we see that our cars will not have drivers. We see that the stuff we buy from Amazon will be delivered by drones. We see that the foundations and structures of our homes will be built by 3D printed concrete. We see a world where many jobs will not exist anymore. Taken out by technology. The very technology that many of us here at AVC are working hard to create and that many of us here at AVC celebrate.</p>
<p>My partner <a href="https://twitter.com/albertwenger">Albert</a> has been talking about this on <a href="http://continuations.com/">his blog</a> for <a href="http://continuations.com/post/37110837581/thinking-about-employment-part-4">a long time</a>. If you want to see the totality of Albert's thinking on this topic, read <a href="http://continuations.com/tagged/economics">the economics tag on his blog</a>. One of Albert's thoughts is that we may need a basic income guarantee to redistribute the consumer surplus we will be creating when we no longer have to pay for drivers, delivery people, and construction workers in our lives (and many others). He's now doing a research project to look into this idea in greater detail and is <a href="http://continuations.com/post/69483074442/looking-for-a-part-time-research-assistant-paid">looking for a research assistant</a>.</p>
<p>But Albert is not the only one thinking about this stuff. Bruce Bartlett, a senior policy advisor to the Reagan and Bush administrations wrote <a href="https://economix.blogs.nytimes.com/2013/12/10/rethinking-the-idea-of-a-basic-income-for-all/">a piece in the NY Times</a> earlier this week advocating for a basic income guarantee.</p>
<p>And if you haven't read <a href="https://www.theguardian.com/world/2013/dec/08/david-simon-capitalism-marx-two-americas-wire">David Simon's rant on this topic in the Guardian</a>, I would suggest you do.</p>
<p>I am not sure about the basic income guarantee. It feels like welfare to me and that system destroyed many productive lives. People need to work. They need to have something to feel good about doing every day. Work is a big part of self image and self worth. Any system that makes it possible for people to sit at home eating bon bons (as the Gotham Gal likes to say) is not a good system.</p>
<p>That said, we do need to recognize that technology is taking massive costs out of our collective P&amp;Ls and creating a large surplus for many of us. At the same time, the people who made up that cost structure are out of work and struggling to put a roof over their head and feed their families. Shouldn't that surplus, at least part of it, go to assisting those people?</p>
<p>So I welcome this debate and I will not be principled on this point. I will not let ideaology and orthodoxy drive my thinking here. And I don't think anyone else should either. Because this is an important discussion to be having. And not just for the US, but for the entire world.</p>
</div>
</article>
<article>
<time>Sep 14, 2013</time>
<h2>
<a href="https://avc.com/2013/09/video-of-the-week-how-large-are-the-planets-and-the-stars/">Video Of The Week: How Large Are The Planets And The Stars?</a>
</h2>
<div>
<p>A friend sent this video to me this week. I enjoyed it and I suspect you all will too. Best of all, it is only 2 1/2 minutes so it won’t take up much of your day to watch it.</p>
<p></p>
</div>
</article>
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 Posts from Science

 Jan 1, 2020

 What Will Happen In The 2020s

 It’s 2020. Time to look forward to the decade that is upon us.

 One of my favorite quotes, attributed to Bill Gates, is that people overestimate what will happen in a year and underestimate what will happen in a decade.

 This is an important decade for mankind. It is a decade in which we will need to find answers to questions that hang over us like last night’s celebrations.

 I am an optimist and believe in society’s ability to find the will to face our challenges and the intelligence to find solutions to them.

 So, I am starting out 2020 in an optimistic mood and here are some predictions for the decade that we are now in.

 1/ The looming climate crisis will be to this century what the two world wars were to the previous one. It will require countries and institutions to re-allocate capital from other endeavors to fight against a warming planet. This is the decade we will begin to see this re-allocation of capital. We will see carbon taxed like the vice that it is in most countries around the world this decade, including in the US. We will see real estate values collapse in some of the most affected regions and we will see real estate values increase in regions that benefit from the warming climate. We will see massive capital investments made in protecting critical regions and infrastructure. We will see nuclear power make a resurgence around the world, particularly smaller reactors that are easier to build and safer to operate. We will see installed solar power worldwide go from ~650GW currently to over 20,000GW by the end of this decade. All of these things and many more will cause the capital markets to focus on and fund the climate issue to the detriment of many other sectors.

 2/ Automation will continue to take costs out of operating many of the services and systems that we rely on to live and be productive. The fight for who should have access to this massive consumer surplus will define the politics of the 2020s. We will see capitalism come under increasing scrutiny and experiments to reallocate wealth and income more equitably will produce a new generation of world leaders who ride this wave to popularity.

 3/ China will emerge as the world’s dominant global superpower leveraging its technical prowess and ability to adapt quickly to changing priorities (see #1). Conversely the US becomes increasingly internally focused and isolationist in its world view.

 4/ Countries will create and promote digital/crypto versions of their fiat currencies, led by China who moves first and benefits the most from this move. The US will be hamstrung by regulatory restraints and will be slow to move, allowing other countries and regions to lead the crypto sector. Asian crypto exchanges, unchecked by cumbersome regulatory restraints in Europe and the US and leveraging decentralized finance technologies, will become the dominant capital markets for all types of financial instruments.

 5/ A decentralized internet will emerge, led initially by decentralized infrastructure services like storage, bandwidth, compute, etc. The emergence of decentralized consumer applications will be slow to take hold and a killer decentralized consumer app will not emerge until the latter part of the decade.

 6/ Plant based diets will dominate the world by the end of the decade. Eating meat will become a delicacy, much like eating caviar is today. Much of the world’s food production will move from farms to laboratories.

 7/ The exploration and commercialization of space will be dominated by private companies as governments increasingly step back from these investments. The early years of this decade will produce a wave of hype and investment in the space business but returns will be slow to come and we will be in a trough of disillusionment on the space business as the decade comes to an end.

 8/ Mass surveillance by governments and corporations will become normal and expected this decade and people will increasingly turn to new products and services to protect themselves from surveillance. The biggest consumer technology successes of this decade will be in the area of privacy.

 9/ We will finally move on from the Baby Boomers dominating the conversation in the US and around the world and Millennials and Gen-Z will be running many institutions by the end of the decade. Age and experience will be less valued by shareholders, voters, and other stakeholders and vision and courage will be valued more.

 10/ Continued advancements in genetics will produce massive wins this decade as cancer and other terminal illnesses become well understood and treatable. Fertility and reproduction will be profoundly changed. Genetics will also create new diseases and moral/ethical issues that will confound and confuse society. Balancing the gains and losses that come from genetics will be our greatest challenge in this decade.

 That’s ten predictions, enough for now and enough for me. I hope I made you think as much as I made myself think writing this. That’s the goal. It is impossible to be right about all of this. But it is important to be thinking about it.

 I know that comments here at AVC are broken at the moment and so I look forward to the conversation on email and Twitter and elsewhere.

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 #climate crisis#crypto#economics#employment#entrepreneurship#Food and Drink#hacking energy#hacking finance#policy#Politics#Science#VC & Technology
 May 24, 2019

 Funding Friday: Planetary Blocks

 I backed this project to make a block toys for kids based on the planetary system a few weeks ago.

 I am into anything that makes learning fun for kids and this definitely does that.

 You can back it here.

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 Dec 15, 2018

 Audio Of The Week: Mythology Was The First Science Fiction

 I loved this A16Z podcast featuring Adrienne Mayor who recently authored “Gods & Robots: Myths, Machines, and Ancient Dreams of Technology“. Early in this podcast Adrienne states that mythology was the first science fiction and then she goes on to explain why. It’s a fun and educational listen. My favorite kind.

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 Aug 21, 2017

 Sunblock

 From roughly 1pm ET to roughly 3pm ET today there will be an eclipse of the Sun by the Moon over the US.

 I like this map which shows when and where the eclipse will take place:

 I spent a half hour this morning on the Internet and learned everything I wanted to know about what is happening and why.

 I wonder how the earliest inhabitants of planet Earth must have felt when the sky went dark for a few minutes in the middle of the day.

 Mankind has learned a lot about the universe we inhabit over the years and that knowledge is now largely available online for anyone to browse and learn from, as I did this morning. Here’s a study set based on today’s eclipse from Quizlet (a USV portfolio company) which uses their new diagramming feature.

 It is a wonderful time to be alive with so much knowledge at our fingertips.

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 Apr 9, 2017

 Decentralized Self-Organizing Systems

 Mankind has been inventing new ways to organize and govern since we showed up on planet earth. Our history is a gradual evolution of these organization and governance systems. Much of what we are using right now was invented in ancient Greece and perfected in western Europe in the 17th, 18th, and 19th centuries.

 I have been thinking for some time that we are on the cusp of something new. I don’t know exactly what it will be but I think it will be inspired by the big technological innovations of the late 20th century and early 21st century and it will be based on decentralized and self-organizing systems.

 The Internet is, at its core, a scaled decentralized system. Its design has been a resounding success. It has scaled elegantly and gradually to well over 2bn users over fifty years. No central entity controls the Internet and it upgrades itself and scales itself slowly over time.

 Open source software development communities are also an important development of the past fifty years. These communities come together to create and maintain new software systems and are not financed or governed by traditional corporate models. The goals of these communities are largely based on delivering new capabilities to the market and they don’t have capitalist based incentive systems and they have shown that in many instances they work better than traditional corporate models, Linux being the best example.

 And, for the past decade or so, we have seen that modern cryptography and some important computer science innovations have led to decentralized blockchain systems, most notably Bitcoin and Ethereum. But there are many more to study and learn from. These blockchain systems are pushing forward our understanding of economic models, governance models, and security models.

 I think it is high time that political scientists, philosophers, economists, and historians turn their attention to these new self-organizing and self-governing systems. Maybe they have and I am not familiar with the work. If so, please point me to it. If not, maybe this post and others like it will be an inspiration for the liberal arts to catch up to the computer scientists and mathematicians or at least work closely with them to figure out what is next, to articulate it and put it in the context of other governance and economic systems. From that work can come progress that mankind needs to move beyond the current systems, which work, but have many flaws and are becoming stale and in need of an upgrade.

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 #blockchain#crypto#economics#hacking government#policy#Politics#Religion#Science
 Jan 18, 2017

 Protecting The Right To Speak And Write And Blog

 I stayed out of the public debate and discussion of the Gawker lawsuit because while I privately came down on the side of Gawker, the specifics of the case made me uncomfortable and I don’t think it was an ideal case to determine what is free speech and what is not.

 However, the same lawyer, Charles Harder, who argued the case against Gawker, is back with another libel suit, this time against Techdirt and its founder and lead writer Mike Masnick. Regular and longtime readers of this blog will know that I am friends with Mike and have supported his efforts to speak out on Techdirt about all sorts of tech policy issues over the years.

 The specifics of the Techdirt case are easier for me to get excited about. Mike has consistently and rigorously debunked the claims of Dr. Shiva Ayyadurai that he (Dr Ayyadurai) “invented” e-mail. Dr. Ayyadurai is upset with Mike about this and so he hired Charles Harder to file a $15mm libel suit against Techdirt and Mike.

 Regardless of whether Dr. Ayyadurai invented email or not (I highly doubt it), we have a long standing history in scientific and technical circles and in the United States of freely, openly, and publicly debating and discussing technical issues like this. Through that sort of public debate and discussion we determine what is real and what is not and we also move the understanding of science and technology forward. These public debates can get nasty and personal, and that is unfortunate, but I believe it is better that we allow for this debate than set legal precedent that wealthy people can stifle debate by suing publications out of business.

 So, I am urging everyone who cares about the legacy of free, open, and public speech and debate about technical issues to support Mike and Techdirt’s efforts to defend themselves. Mike wrote a blog post about this issue last week and this is taken from that post:

 I am beyond thankful to the many of you who have reached out and offered to help in all sorts of ways. It is heartening to know so many people care about Techdirt. At some point soon, we may set up a dedicated legal defense fund. But, in the meantime, any support you can provide us will help — whether it’s just alerting people to this situation and the danger of trying to stifle a free press through meritless lawsuits, or it’s supporting Techdirt directly (or, if you have a company, advertising with us). As always, you can support us directly as a Friend of Techdirt, or check out some of the other perks you can get in our Insider program. You can also support us via Patreon.

 I am hoping that Mike sets up a dedicated legal defense fund and plan to contribute to it if he does. I will let AVC readers know if that happens. Until then, let’s all get behind Mike and put a stop to this nonsense.

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 #policy#Politics#Science#Web/Tech
 May 22, 2016

 Experiment and Scandal

 We are living in a time of great experiments. They are not happening in the lab. They are happening in the real world. And they are being financed by real people. We are witnessing the de-institutionalization of experimentation. We are returning to a time when anyone can be an inventor and innovator. Some of this has happened because of the explosion of venture capital, both in the US and also around the world. Some of this has happened because entertainment and culture has embraced the world of experimentation and innovation (Shark Tank, Silicon Valley). Some of this has happened because the tools for innovation and experimentation have become mainstream and anyone can use them.

 I am not thinking of one thing. I am thinking of many things. I am thinking of The DAO. I am thinking of Bitcoin and Ethereum. I am thinking of Oculus getting financed on Kickstarter. I am thinking of the launch of equity crowdfunding for everyone in the US last week. I am even thinking of things like Theranos.

 All of these things are great experiments that will produce great benefit to society if they succeed. But by their nature experiments often fail. They need to fail. Or they would not be experiments.

 And one of the challenges with the de-institutionalization of experimentation is that some of these failures will be spectacular. Combine that with the idea that these experiments are being funded by real people and the idea that the world of media/entertainment/culture has injected itself right in the middle of this brave new world and you have the recipe for scandal. And scandal will naturally result in efforts to put the genie back in the bottle (Sarbanes Oxley, Dodd Frank). And these regulatory efforts will naturally attempt to re-institutionalize experimentation.

 I find myself wishing we could keep the dollars invested and hype down when we do these massively public experiments. But the dollar/hype cycle is a natural part of being human. Some dollars are invested. We get excited about this investment. We talk it up. More people find out about it and more dollars are invested. More of us get excited about this investment and we talk it up more. Rinse, repeat, rinse, repeat and you get unicorns and distributed autonomous funding mechanisms entrusted with hundreds of millions before anything has even been funded. Eventually some of that gets unwound and the tape is full of red.

 Don’t get me wrong. I am all for distributed autonomous organizations and the innovation behind them and in front of them. There isn’t much out there that I am more excited about. But I am also very fearful that this could end badly. And even more fearful of what may be foisted on us by well meaning regulators when that happens.

 So let’s celebrate this incredible phase of permissionless innovation we are in. And let’s all understand that we will have many failures. Some of them spectacular. Money will be lost. Possibly hundreds of millions or billions. Let’s expect that. Let’s build that into our mental models. So when that happens, we can suck it up, deal with it, and keep moving forward. Because an open permissionless world of innovation that everyone can participate in is utopia in so many ways. The good that will come of it will massively outweigh any bad. But bad there will be. I can assure you of that.

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 #blockchain#crowdfunding#entrepreneurship#hacking finance#law#regulation 2.0#Science#VC & Technology
 Apr 26, 2014

 Video Of The Week: Simon Singh on Confirmation Bias

 My friend Mark Ghuneim sent me two books last week, Simon Singh’s The Code Book and Bruce Schneier’s Secrets and Lies. I am reading The Code Book first and really enjoying it. So I went on YouTube this morning and started watching Simon Singh talks. There are a bunch of them.

 My favorite is this short (~6 mins) video where Simon demonstrates how the brain is susceptible to confirmation bias. It’s pretty great.

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 Dec 12, 2013

 The Limits of Capitalism

 I am a capitalist. Contrary to the occasional community members who call me a socialist or a techno communist, I believe wholeheartedly in the power of markets to efficently determine what's best in most cases.

 But I am not an absolute capitalist. I believe that markets do break down from time to time and we need to recognize when those things happen and do something about it. The labor movement, when it was not corrupt for the most part, is an example of a societal response to a market breakdown.

 When we stare into the future, we see that our cars will not have drivers. We see that the stuff we buy from Amazon will be delivered by drones. We see that the foundations and structures of our homes will be built by 3D printed concrete. We see a world where many jobs will not exist anymore. Taken out by technology. The very technology that many of us here at AVC are working hard to create and that many of us here at AVC celebrate.

 My partner Albert has been talking about this on his blog for a long time. If you want to see the totality of Albert's thinking on this topic, read the economics tag on his blog. One of Albert's thoughts is that we may need a basic income guarantee to redistribute the consumer surplus we will be creating when we no longer have to pay for drivers, delivery people, and construction workers in our lives (and many others). He's now doing a research project to look into this idea in greater detail and is looking for a research assistant.

 But Albert is not the only one thinking about this stuff. Bruce Bartlett, a senior policy advisor to the Reagan and Bush administrations wrote a piece in the NY Times earlier this week advocating for a basic income guarantee.

 And if you haven't read David Simon's rant on this topic in the Guardian, I would suggest you do.

 I am not sure about the basic income guarantee. It feels like welfare to me and that system destroyed many productive lives. People need to work. They need to have something to feel good about doing every day. Work is a big part of self image and self worth. Any system that makes it possible for people to sit at home eating bon bons (as the Gotham Gal likes to say) is not a good system.

 That said, we do need to recognize that technology is taking massive costs out of our collective P&Ls and creating a large surplus for many of us. At the same time, the people who made up that cost structure are out of work and struggling to put a roof over their head and feed their families. Shouldn't that surplus, at least part of it, go to assisting those people?

 So I welcome this debate and I will not be principled on this point. I will not let ideaology and orthodoxy drive my thinking here. And I don't think anyone else should either. Because this is an important discussion to be having. And not just for the US, but for the entire world.

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 #employment#Politics#Science
 Sep 14, 2013

 Video Of The Week: How Large Are The Planets And The Stars?

 A friend sent this video to me this week. I enjoyed it and I suspect you all will too. Best of all, it is only 2 1/2 minutes so it won’t take up much of your day to watch it.

 Discuss on Twitter
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Posts from Science
Jan 1, 2020
What Will Happen In The 2020s
It’s 2020. Time to look forward to the decade that is upon us. 
One of my favorite quotes, attributed to Bill Gates, is that people overestimate what will happen in a year and underestimate what will happen in a decade.
This is an important decade for mankind. It is a decade in which we will need to find answers to questions that hang over us like last night’s celebrations.
I am an optimist and believe in society’s ability to find the will to face our challenges and the intelligence to find solutions to them.
So, I am starting out 2020 in an optimistic mood and here are some predictions for the decade that we are now in.
1/ The looming climate crisis will be to this century what the two world wars were to the previous one. It will require countries and institutions to re-allocate capital from other endeavors to fight against a warming planet. This is the decade we will begin to see this re-allocation of capital. We will see carbon taxed like the vice that it is in most countries around the world this decade, including in the US. We will see real estate values collapse in some of the most affected regions and we will see real estate values increase in regions that benefit from the warming climate. We will see massive capital investments made in protecting critical regions and infrastructure. We will see nuclear power make a resurgence around the world, particularly smaller reactors that are easier to build and safer to operate. We will see installed solar power worldwide go from ~650GW currently to over 20,000GW by the end of this decade. All of these things and many more will cause the capital markets to focus on and fund the climate issue to the detriment of many other sectors.
2/ Automation will continue to take costs out of operating many of the services and systems that we rely on to live and be productive. The fight for who should have access to this massive consumer surplus will define the politics of the 2020s. We will see capitalism come under increasing scrutiny and experiments to reallocate wealth and income more equitably will produce a new generation of world leaders who ride this wave to popularity.
3/ China will emerge as the world’s dominant global superpower leveraging its technical prowess and ability to adapt quickly to changing priorities (see #1). Conversely the US becomes increasingly internally focused and isolationist in its world view.
4/ Countries will create and promote digital/crypto versions of their fiat currencies, led by China who moves first and benefits the most from this move. The US will be hamstrung by regulatory restraints and will be slow to move, allowing other countries and regions to lead the crypto sector. Asian crypto exchanges, unchecked by cumbersome regulatory restraints in Europe and the US and leveraging decentralized finance technologies, will become the dominant capital markets for all types of financial instruments.
5/ A decentralized internet will emerge, led initially by decentralized infrastructure services like storage, bandwidth, compute, etc. The emergence of decentralized consumer applications will be slow to take hold and a killer decentralized consumer app will not emerge until the latter part of the decade.
6/ Plant based diets will dominate the world by the end of the decade. Eating meat will become a delicacy, much like eating caviar is today. Much of the world’s food production will move from farms to laboratories.
7/ The exploration and commercialization of space will be dominated by private companies as governments increasingly step back from these investments. The early years of this decade will produce a wave of hype and investment in the space business but returns will be slow to come and we will be in a trough of disillusionment on the space business as the decade comes to an end.
8/ Mass surveillance by governments and corporations will become normal and expected this decade and people will increasingly turn to new products and services to protect themselves from surveillance. The biggest consumer technology successes of this decade will be in the area of privacy.
9/ We will finally move on from the Baby Boomers dominating the conversation in the US and around the world and Millennials and Gen-Z will be running many institutions by the end of the decade. Age and experience will be less valued by shareholders, voters, and other stakeholders and vision and courage will be valued more.
10/ Continued advancements in genetics will produce massive wins this decade as cancer and other terminal illnesses become well understood and treatable. Fertility and reproduction will be profoundly changed. Genetics will also create new diseases and moral/ethical issues that will confound and confuse society. Balancing the gains and losses that come from genetics will be our greatest challenge in this decade.
That’s ten predictions, enough for now and enough for me. I hope I made you think as much as I made myself think writing this. That’s the goal. It is impossible to be right about all of this. But it is important to be thinking about it.
I know that comments here at AVC are broken at the moment and so I look forward to the conversation on email and Twitter and elsewhere.
May 24, 2019
Funding Friday: Planetary Blocks
I backed this project to make a block toys for kids based on the planetary system a few weeks ago.
I am into anything that makes learning fun for kids and this definitely does that.
You can back it here.
Dec 15, 2018
Audio Of The Week: Mythology Was The First Science Fiction
I loved this A16Z podcast featuring Adrienne Mayor who recently authored “Gods &amp; Robots: Myths, Machines, and Ancient Dreams of Technology“. Early in this podcast Adrienne states that mythology was the first science fiction and then she goes on to explain why. It’s a fun and educational listen. My favorite kind.
Aug 21, 2017
Sunblock
From roughly 1pm ET to roughly 3pm ET today there will be an eclipse of the Sun by the Moon over the US.
I like this map which shows when and where the eclipse will take place:
 
I spent a half hour this morning on the Internet and learned everything I wanted to know about what is happening and why.
I wonder how the earliest inhabitants of planet Earth must have felt when the sky went dark for a few minutes in the middle of the day.
Mankind has learned a lot about the universe we inhabit over the years and that knowledge is now largely available online for anyone to browse and learn from, as I did this morning. Here’s a study set based on today’s eclipse from Quizlet (a USV portfolio company) which uses their new diagramming feature.
It is a wonderful time to be alive with so much knowledge at our fingertips.
 
Apr 9, 2017
Decentralized Self-Organizing Systems
Mankind has been inventing new ways to organize and govern since we showed up on planet earth. Our history is a gradual evolution of these organization and governance systems. Much of what we are using right now was invented in ancient Greece and perfected in western Europe in the 17th, 18th, and 19th centuries.
I have been thinking for some time that we are on the cusp of something new. I don’t know exactly what it will be but I think it will be inspired by the big technological innovations of the late 20th century and early 21st century and it will be based on decentralized and self-organizing systems.
The Internet is, at its core, a scaled decentralized system. Its design has been a resounding success. It has scaled elegantly and gradually to well over 2bn users over fifty years. No central entity controls the Internet and it upgrades itself and scales itself slowly over time.
Open source software development communities are also an important development of the past fifty years. These communities come together to create and maintain new software systems and are not financed or governed by traditional corporate models. The goals of these communities are largely based on delivering new capabilities to the market and they don’t have capitalist based incentive systems and they have shown that in many instances they work better than traditional corporate models, Linux being the best example.
And, for the past decade or so, we have seen that modern cryptography and some important computer science innovations have led to decentralized blockchain systems, most notably Bitcoin and Ethereum. But there are many more to study and learn from. These blockchain systems are pushing forward our understanding of economic models, governance models, and security models.
I think it is high time that political scientists, philosophers, economists, and historians turn their attention to these new self-organizing and self-governing systems. Maybe they have and I am not familiar with the work. If so, please point me to it. If not, maybe this post and others like it will be an inspiration for the liberal arts to catch up to the computer scientists and mathematicians or at least work closely with them to figure out what is next, to articulate it and put it in the context of other governance and economic systems. From that work can come progress that mankind needs to move beyond the current systems, which work, but have many flaws and are becoming stale and in need of an upgrade.
Jan 18, 2017
Protecting The Right To Speak And Write And Blog
I stayed out of the public debate and discussion of the Gawker lawsuit because while I privately came down on the side of Gawker, the specifics of the case made me uncomfortable and I don’t think it was an ideal case to determine what is free speech and what is not.
However, the same lawyer, Charles Harder, who argued the case against Gawker, is back with another libel suit, this time against Techdirt and its founder and lead writer Mike Masnick. Regular and longtime readers of this blog will know that I am friends with Mike and have supported his efforts to speak out on Techdirt about all sorts of tech policy issues over the years.
The specifics of the Techdirt case are easier for me to get excited about. Mike has consistently and rigorously debunked the claims of Dr. Shiva Ayyadurai that he (Dr Ayyadurai) “invented” e-mail. Dr. Ayyadurai is upset with Mike about this and so he hired Charles Harder to file a $15mm libel suit against Techdirt and Mike.
Regardless of whether Dr. Ayyadurai invented email or not (I highly doubt it), we have a long standing history in scientific and technical circles and in the United States of freely, openly, and publicly debating and discussing technical issues like this. Through that sort of public debate and discussion we determine what is real and what is not and we also move the understanding of science and technology forward. These public debates can get nasty and personal, and that is unfortunate, but I believe it is better that we allow for this debate than set legal precedent that wealthy people can stifle debate by suing publications out of business.
So, I am urging everyone who cares about the legacy of free, open, and public speech and debate about technical issues to support Mike and Techdirt’s efforts to defend themselves. Mike wrote a blog post about this issue last week and this is taken from that post:
  I am beyond thankful to the many of you who have reached out and offered to help in all sorts of ways. It is heartening to know so many people care about Techdirt. At some point soon, we may set up a dedicated legal defense fund. But, in the meantime, any support you can provide us will help — whether it’s just alerting people to this situation and the danger of trying to stifle a free press through meritless lawsuits, or it’s supporting Techdirt directly (or, if you have a company, advertising with us). As always, you can support us directly as a Friend of Techdirt, or check out some of the other perks you can get in our Insider program. You can also support us via Patreon.  
I am hoping that Mike sets up a dedicated legal defense fund and plan to contribute to it if he does. I will let AVC readers know if that happens. Until then, let’s all get behind Mike and put a stop to this nonsense.
May 22, 2016
Experiment and Scandal
We are living in a time of great experiments. They are not happening in the lab. They are happening in the real world. And they are being financed by real people. We are witnessing the de-institutionalization of experimentation. We are returning to a time when anyone can be an inventor and innovator. Some of this has happened because of the explosion of venture capital, both in the US and also around the world. Some of this has happened because entertainment and culture has embraced the world of experimentation and innovation (Shark Tank, Silicon Valley). Some of this has happened because the tools for innovation and experimentation have become mainstream and anyone can use them.
I am not thinking of one thing. I am thinking of many things. I am thinking of The DAO. I am thinking of Bitcoin and Ethereum. I am thinking of Oculus getting financed on Kickstarter. I am thinking of the launch of equity crowdfunding for everyone in the US last week. I am even thinking of things like Theranos.
All of these things are great experiments that will produce great benefit to society if they succeed. But by their nature experiments often fail. They need to fail. Or they would not be experiments.
And one of the challenges with the de-institutionalization of experimentation is that some of these failures will be spectacular. Combine that with the idea that these experiments are being funded by real people and the idea that the world of media/entertainment/culture has injected itself right in the middle of this brave new world and you have the recipe for scandal. And scandal will naturally result in efforts to put the genie back in the bottle (Sarbanes Oxley, Dodd Frank). And these regulatory efforts will naturally attempt to re-institutionalize experimentation.
I find myself wishing we could keep the dollars invested and hype down when we do these massively public experiments. But the dollar/hype cycle is a natural part of being human. Some dollars are invested. We get excited about this investment. We talk it up. More people find out about it and more dollars are invested. More of us get excited about this investment and we talk it up more. Rinse, repeat, rinse, repeat and you get unicorns and distributed autonomous funding mechanisms entrusted with hundreds of millions before anything has even been funded. Eventually some of that gets unwound and the tape is full of red.
Don’t get me wrong. I am all for distributed autonomous organizations and the innovation behind them and in front of them. There isn’t much out there that I am more excited about. But I am also very fearful that this could end badly. And even more fearful of what may be foisted on us by well meaning regulators when that happens.
So let’s celebrate this incredible phase of permissionless innovation we are in. And let’s all understand that we will have many failures. Some of them spectacular. Money will be lost. Possibly hundreds of millions or billions. Let’s expect that. Let’s build that into our mental models. So when that happens, we can suck it up, deal with it, and keep moving forward. Because an open permissionless world of innovation that everyone can participate in is utopia in so many ways. The good that will come of it will massively outweigh any bad. But bad there will be. I can assure you of that.
Apr 26, 2014
Video Of The Week: Simon Singh on Confirmation Bias
My friend Mark Ghuneim sent me two books last week, Simon Singh’s The Code Book and Bruce Schneier’s Secrets and Lies. I am reading The Code Book first and really enjoying it. So I went on YouTube this morning and started watching Simon Singh talks. There are a bunch of them.
My favorite is this short (~6 mins) video where Simon demonstrates how the brain is susceptible to confirmation bias. It’s pretty great.
 
Dec 12, 2013
The Limits of Capitalism
I am a capitalist. Contrary to the occasional community members who call me a socialist or a techno communist, I believe wholeheartedly in the power of markets to efficently determine what's best in most cases.
But I am not an absolute capitalist. I believe that markets do break down from time to time and we need to recognize when those things happen and do something about it. The labor movement, when it was not corrupt for the most part, is an example of a societal response to a market breakdown.
When we stare into the future, we see that our cars will not have drivers. We see that the stuff we buy from Amazon will be delivered by drones. We see that the foundations and structures of our homes will be built by 3D printed concrete. We see a world where many jobs will not exist anymore. Taken out by technology. The very technology that many of us here at AVC are working hard to create and that many of us here at AVC celebrate.
My partner Albert has been talking about this on his blog for a long time. If you want to see the totality of Albert's thinking on this topic, read the economics tag on his blog. One of Albert's thoughts is that we may need a basic income guarantee to redistribute the consumer surplus we will be creating when we no longer have to pay for drivers, delivery people, and construction workers in our lives (and many others). He's now doing a research project to look into this idea in greater detail and is looking for a research assistant.
But Albert is not the only one thinking about this stuff. Bruce Bartlett, a senior policy advisor to the Reagan and Bush administrations wrote a piece in the NY Times earlier this week advocating for a basic income guarantee.
And if you haven't read David Simon's rant on this topic in the Guardian, I would suggest you do.
I am not sure about the basic income guarantee. It feels like welfare to me and that system destroyed many productive lives. People need to work. They need to have something to feel good about doing every day. Work is a big part of self image and self worth. Any system that makes it possible for people to sit at home eating bon bons (as the Gotham Gal likes to say) is not a good system.
That said, we do need to recognize that technology is taking massive costs out of our collective P&amp;Ls and creating a large surplus for many of us. At the same time, the people who made up that cost structure are out of work and struggling to put a roof over their head and feed their families. Shouldn't that surplus, at least part of it, go to assisting those people?
So I welcome this debate and I will not be principled on this point. I will not let ideaology and orthodoxy drive my thinking here. And I don't think anyone else should either. Because this is an important discussion to be having. And not just for the US, but for the entire world.
Sep 14, 2013
Video Of The Week: How Large Are The Planets And The Stars?
A friend sent this video to me this week. I enjoyed it and I suspect you all will too. Best of all, it is only 2 1/2 minutes so it won’t take up much of your day to watch it.
Science Archives - AVC
https://avc.com/category/science/
<div><div><div><a href="https://medium.com/@sequoia?source=post_page-----40f5472cdb49--------------------------------"><div><p></p></div></a><a href="https://medium.com/sequoia-capital?source=post_page-----40f5472cdb49--------------------------------"><div><p></p></div></a></div><p><a href="https://seq.vc/c1i"><em>Carl Eschenbach</em></a><em> on behalf of Team Sequoia</em></p><figure></figure><p>When we partnered with <a href="https://seq.vc/aci">Aurora</a> in early 2019, co-founder and CEO Chris Urmson had been on Sequoia’s radar for several years. As we <a href="https://seq.vc/731">noted</a> at the time, he even helped shape our early thoughts on the autonomous vehicle landscape itself, with a memorable 2016 presentation he shared after leaving his role leading Google’s self-driving unit.</p><p>With deep expertise in a space that we consider one of mankind’s largest and most exciting “science projects,” Chris was already widely respected for both his technical and leadership abilities. But in the years that followed, we got a closer look at what makes him so exceptional — not only as a technologist and as a leader, but as a person.</p><p>Chris and I happen to live only a few miles from each other, and as he began to build Aurora and Sequoia continued to explore self-driving technology, we started meeting for coffee every couple of months. His IQ was immediately clear — but so was his EQ. He is open, authentic and down-to-earth, a truly good human. He also has a clear sense of purpose. Each decision he makes is with Aurora’s mission in mind: to accelerate the adoption of self-driving technology, and to do it safely.</p><p>As we got to know his co-founders, Sterling Anderson and Drew Bagnell, we realized that while Chris may have set the stage, Aurora is led by a dream team, all of whom are all-in on its impressive company culture. Their leadership is contagious — in the Bay Area and Pittsburgh offices alike, we found the same commitment to making our roads safer and our supply chains more efficient, and the same understanding of what it takes to deploy self-driving technology at scale. And at their new trucking center in Texas, which opened last summer, that mindset again quickly took hold.</p><p>In the years since Chris, Sterling and Drew gave us the opportunity to support their mission and lead the Series B, we’ve seen Aurora grow rapidly. But through it all, their culture has remained intact. From a small lidar company in Bozeman, Montana, to the entire ATG unit of Uber — several-hundred-engineers strong — Aurora has successfully added new team members and new ideas while retaining its values. Merging two organizations is difficult even under normal circumstances, much less in the middle of a global pandemic. It wasn’t always seamless. But because Aurora was so intentionally built to scale, they were able to figure it out, and those two teams are now one.</p><p>As Aurora has grown, so have its ambitions — with Chris and the team wisely recognizing that the Aurora Driver platform is a true crossover technology, applicable to autonomous trucking as well as passenger mobility. By starting with trucking, they are helping meet the moment of a supply-chain crisis fueled in part by a shortage of 60,000 truck drivers — which is expected to grow to 160,000 in less than 10 years. In the process, they are also expanding Aurora’s already world-class partnership ecosystem, with an industry-first pilot program with Paccar and FedEx that is already on the roads in Texas (with a safety driver for now).</p><p>Five years after Chris, Sterling and Drew launched their dream of revolutionizing transportation, today’s IPO is an exciting validation of the hard work they and their team have put in, and we are proud to celebrate alongside them. But we also know there is much more hard work to come; this is merely a milestone on the path to commercial deployment of the Aurora Driver. So on behalf of everyone at Sequoia, congratulations to the Aurora team on this accomplishment, and thank you for trusting us to be by your side. We’re confident that you will continue to drive down the road toward safe and autonomous vehicles — even and especially when no one’s at the wheel.</p></div></div>||||I||||          Open in app

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                        Aurora IPO: The Road Ahead

                                                Sequoia

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                                        3 min read
                                          ·
                                        Nov 4, 2021

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                      Carl Eschenbach on behalf of Team Sequoia

                      When we partnered with Aurora in early 2019, co-founder and CEO Chris Urmson had been on Sequoia’s radar for several years. As we noted at the time, he even helped shape our early thoughts on the autonomous vehicle landscape itself, with a memorable 2016 presentation he shared after leaving his role leading Google’s self-driving unit.

                      With deep expertise in a space that we consider one of mankind’s largest and most exciting “science projects,” Chris was already widely respected for both his technical and leadership abilities. But in the years that followed, we got a closer look at what makes him so exceptional — not only as a technologist and as a leader, but as a person.

                      Chris and I happen to live only a few miles from each other, and as he began to build Aurora and Sequoia continued to explore self-driving technology, we started meeting for coffee every couple of months. His IQ was immediately clear — but so was his EQ. He is open, authentic and down-to-earth, a truly good human. He also has a clear sense of purpose. Each decision he makes is with Aurora’s mission in mind: to accelerate the adoption of self-driving technology, and to do it safely.

                      As we got to know his co-founders, Sterling Anderson and Drew Bagnell, we realized that while Chris may have set the stage, Aurora is led by a dream team, all of whom are all-in on its impressive company culture. Their leadership is contagious — in the Bay Area and Pittsburgh offices alike, we found the same commitment to making our roads safer and our supply chains more efficient, and the same understanding of what it takes to deploy self-driving technology at scale. And at their new trucking center in Texas, which opened last summer, that mindset again quickly took hold.

                      In the years since Chris, Sterling and Drew gave us the opportunity to support their mission and lead the Series B, we’ve seen Aurora grow rapidly. But through it all, their culture has remained intact. From a small lidar company in Bozeman, Montana, to the entire ATG unit of Uber — several-hundred-engineers strong — Aurora has successfully added new team members and new ideas while retaining its values. Merging two organizations is difficult even under normal circumstances, much less in the middle of a global pandemic. It wasn’t always seamless. But because Aurora was so intentionally built to scale, they were able to figure it out, and those two teams are now one.

                      As Aurora has grown, so have its ambitions — with Chris and the team wisely recognizing that the Aurora Driver platform is a true crossover technology, applicable to autonomous trucking as well as passenger mobility. By starting with trucking, they are helping meet the moment of a supply-chain crisis fueled in part by a shortage of 60,000 truck drivers — which is expected to grow to 160,000 in less than 10 years. In the process, they are also expanding Aurora’s already world-class partnership ecosystem, with an industry-first pilot program with Paccar and FedEx that is already on the roads in Texas (with a safety driver for now).

                      Five years after Chris, Sterling and Drew launched their dream of revolutionizing transportation, today’s IPO is an exciting validation of the hard work they and their team have put in, and we are proud to celebrate alongside them. But we also know there is much more hard work to come; this is merely a milestone on the path to commercial deployment of the Aurora Driver. So on behalf of everyone at Sequoia, congratulations to the Aurora team on this accomplishment, and thank you for trusting us to be by your side. We’re confident that you will continue to drive down the road toward safe and autonomous vehicles — even and especially when no one’s at the wheel.

                  Sequoia Capital
                  Aurora
                  Self Driving Vehicles
                  Startup
                  Entrepreneurship

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                    From idea to IPO and beyond, we help the daring build legendary companies. Follow our publication for more Sequoia perspectives: https://seq.vc/Sequoia-pub

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                        Aurora IPO: The Road Ahead
                                                Sequoia
                                          ·
                                          Follow
                                          Published in
                                              Sequoia Capital Publication
                                          ·
                                        3 min read
                                          ·
                                        Nov 4, 2021
                                        --
                                                    Listen
                                          Share
                      Carl Eschenbach on behalf of Team Sequoia
                      When we partnered with Aurora in early 2019, co-founder and CEO Chris Urmson had been on Sequoia’s radar for several years. As we noted at the time, he even helped shape our early thoughts on the autonomous vehicle landscape itself, with a memorable 2016 presentation he shared after leaving his role leading Google’s self-driving unit.
                      With deep expertise in a space that we consider one of mankind’s largest and most exciting “science projects,” Chris was already widely respected for both his technical and leadership abilities. But in the years that followed, we got a closer look at what makes him so exceptional — not only as a technologist and as a leader, but as a person.
                      Chris and I happen to live only a few miles from each other, and as he began to build Aurora and Sequoia continued to explore self-driving technology, we started meeting for coffee every couple of months. His IQ was immediately clear — but so was his EQ. He is open, authentic and down-to-earth, a truly good human. He also has a clear sense of purpose. Each decision he makes is with Aurora’s mission in mind: to accelerate the adoption of self-driving technology, and to do it safely.
                      As we got to know his co-founders, Sterling Anderson and Drew Bagnell, we realized that while Chris may have set the stage, Aurora is led by a dream team, all of whom are all-in on its impressive company culture. Their leadership is contagious — in the Bay Area and Pittsburgh offices alike, we found the same commitment to making our roads safer and our supply chains more efficient, and the same understanding of what it takes to deploy self-driving technology at scale. And at their new trucking center in Texas, which opened last summer, that mindset again quickly took hold.
                      In the years since Chris, Sterling and Drew gave us the opportunity to support their mission and lead the Series B, we’ve seen Aurora grow rapidly. But through it all, their culture has remained intact. From a small lidar company in Bozeman, Montana, to the entire ATG unit of Uber — several-hundred-engineers strong — Aurora has successfully added new team members and new ideas while retaining its values. Merging two organizations is difficult even under normal circumstances, much less in the middle of a global pandemic. It wasn’t always seamless. But because Aurora was so intentionally built to scale, they were able to figure it out, and those two teams are now one.
                      As Aurora has grown, so have its ambitions — with Chris and the team wisely recognizing that the Aurora Driver platform is a true crossover technology, applicable to autonomous trucking as well as passenger mobility. By starting with trucking, they are helping meet the moment of a supply-chain crisis fueled in part by a shortage of 60,000 truck drivers — which is expected to grow to 160,000 in less than 10 years. In the process, they are also expanding Aurora’s already world-class partnership ecosystem, with an industry-first pilot program with Paccar and FedEx that is already on the roads in Texas (with a safety driver for now).
                      Five years after Chris, Sterling and Drew launched their dream of revolutionizing transportation, today’s IPO is an exciting validation of the hard work they and their team have put in, and we are proud to celebrate alongside them. But we also know there is much more hard work to come; this is merely a milestone on the path to commercial deployment of the Aurora Driver. So on behalf of everyone at Sequoia, congratulations to the Aurora team on this accomplishment, and thank you for trusting us to be by your side. We’re confident that you will continue to drive down the road toward safe and autonomous vehicles — even and especially when no one’s at the wheel.
                  Sequoia Capital
                  Aurora
                  Self Driving Vehicles
                  Startup
                  Entrepreneurship
                        --
                        --
                    Follow
                    Written by Sequoia
                      43K Followers
                      · Editor for
                          Sequoia Capital Publication
                    From idea to IPO and beyond, we help the daring build legendary companies. Follow our publication for more Sequoia perspectives: https://seq.vc/Sequoia-pub
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                    About
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Aurora IPO: The Road Ahead
https://medium.com/sequoia-capital/aurora-ipo-the-road-ahead-40f5472cdb49
https://a16z.com/2021/11/29/investing-in-mainframe/
Investing in Mainframe | Andreessen Horowitz
2021-11-29
Jonathan Lai; Skelly
<div><div>
	 <p>The games industry has consistently found new ways to reduce barriers to entry.</p>
<p>In the 2000s, the success of Adobe Flash-based games showed us the power of browser-based games which, for the first time, could be shared virally through a simple web link. The recent resurgence in <a href="https://future.com/instant-games/">instant games</a> shows us that frictionless onboarding is even more powerful when coupled with modern video and social platforms that augment sharing. Cloud gaming (the streaming of high-end games from servers in the cloud) builds upon instant games by marrying the accessibility of browser links with the deep multiplayer systems and production values of AAA games, historically found on PC or console.</p>
<p>The true potential of cloud gaming lies not just in expanding access to games, but also in creating new types of <a href="https://www.google.com/url?q=https://a16z.com/2020/01/14/cloud-native-games/&amp;sa=D&amp;source=docs&amp;ust=1637546585552000&amp;usg=AOvVaw3UNA64vgo_jA-wzkvtx_eu">cloud-native gameplay</a> — only possible when the entire world, both client and server, is hosted in the cloud. For example, cloud-native gameplay could enable interactions between spectators and players, real-time content generation as players explore a world, or personalized onboarding delivered via URLs. Web3 is also a uniquely good fit for cloud games. It will allow players to leverage browser-based crypto wallets while in-game, and eventually create and own real value from the assets they earn in-game.</p>
<p>We believe that a combination of new gameplay mechanics, distribution channels, and business models will be key to unlocking the next 3B gamers. To this end, I’m thrilled to announce that Andreessen Horowitz is leading Mainframe Industries’ Series B and I’ll be joining the board. Mainframe is building one of the industry’s first cloud-native MMOs — a persistent, living world based in the cloud and accessible from any Internet-connected device. It’s been a privilege working with CEO Thor Gunnarson and team as they’ve innovated along many different dimensions from novel gameplay modes to cloud distribution to virtual economy design.</p>
<p>We first invested in Mainframe at the Series A last year. Since then, the team has realized their product vision, built cutting-edge infrastructure, and grown to over 55 strong. The Mainframe team is truly unique, combining the best of AAA PC/console talent from companies like CCP, Remedy, and Blizzard, with mobile and free-to-play expertise from companies like Next Games and Sulake.</p>
<p>Long-term, Mainframe will be a critical building block of the Metaverse, providing an easily-accessible, shared virtual space where players can live out alternate identities with rich social and economic networks. As new technologies like web3 and instant games continue to emerge, the future for Mainframe is bright. We couldn’t be more excited to continue supporting the team in the next phase of their journey!</p>
<p>***</p>
<p><i>The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.</i></p>
<p><i>This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.</i></p>
<p><i>Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.</i></p>
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 Investing in Mainframe

 by Jonathan Lai
 * consumer
 * gaming, social, and new media
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 The games industry has consistently found new ways to reduce barriers to entry.

 In the 2000s, the success of Adobe Flash-based games showed us the power of browser-based games which, for the first time, could be shared virally through a simple web link. The recent resurgence in instant games shows us that frictionless onboarding is even more powerful when coupled with modern video and social platforms that augment sharing. Cloud gaming (the streaming of high-end games from servers in the cloud) builds upon instant games by marrying the accessibility of browser links with the deep multiplayer systems and production values of AAA games, historically found on PC or console.

 The true potential of cloud gaming lies not just in expanding access to games, but also in creating new types of cloud-native gameplay — only possible when the entire world, both client and server, is hosted in the cloud. For example, cloud-native gameplay could enable interactions between spectators and players, real-time content generation as players explore a world, or personalized onboarding delivered via URLs. Web3 is also a uniquely good fit for cloud games. It will allow players to leverage browser-based crypto wallets while in-game, and eventually create and own real value from the assets they earn in-game.

 We believe that a combination of new gameplay mechanics, distribution channels, and business models will be key to unlocking the next 3B gamers. To this end, I’m thrilled to announce that Andreessen Horowitz is leading Mainframe Industries’ Series B and I’ll be joining the board. Mainframe is building one of the industry’s first cloud-native MMOs — a persistent, living world based in the cloud and accessible from any Internet-connected device. It’s been a privilege working with CEO Thor Gunnarson and team as they’ve innovated along many different dimensions from novel gameplay modes to cloud distribution to virtual economy design.

 We first invested in Mainframe at the Series A last year. Since then, the team has realized their product vision, built cutting-edge infrastructure, and grown to over 55 strong. The Mainframe team is truly unique, combining the best of AAA PC/console talent from companies like CCP, Remedy, and Blizzard, with mobile and free-to-play expertise from companies like Next Games and Sulake.

 Long-term, Mainframe will be a critical building block of the Metaverse, providing an easily-accessible, shared virtual space where players can live out alternate identities with rich social and economic networks. As new technologies like web3 and instant games continue to emerge, the future for Mainframe is bright. We couldn’t be more excited to continue supporting the team in the next phase of their journey!

 ***

 The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.

 This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.

 Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.

 November 29, 2021

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The games industry has consistently found new ways to reduce barriers to entry.
In the 2000s, the success of Adobe Flash-based games showed us the power of browser-based games which, for the first time, could be shared virally through a simple web link. The recent resurgence in instant games shows us that frictionless onboarding is even more powerful when coupled with modern video and social platforms that augment sharing. Cloud gaming (the streaming of high-end games from servers in the cloud) builds upon instant games by marrying the accessibility of browser links with the deep multiplayer systems and production values of AAA games, historically found on PC or console.
The true potential of cloud gaming lies not just in expanding access to games, but also in creating new types of cloud-native gameplay — only possible when the entire world, both client and server, is hosted in the cloud. For example, cloud-native gameplay could enable interactions between spectators and players, real-time content generation as players explore a world, or personalized onboarding delivered via URLs. Web3 is also a uniquely good fit for cloud games. It will allow players to leverage browser-based crypto wallets while in-game, and eventually create and own real value from the assets they earn in-game.
We believe that a combination of new gameplay mechanics, distribution channels, and business models will be key to unlocking the next 3B gamers. To this end, I’m thrilled to announce that Andreessen Horowitz is leading Mainframe Industries’ Series B and I’ll be joining the board. Mainframe is building one of the industry’s first cloud-native MMOs — a persistent, living world based in the cloud and accessible from any Internet-connected device. It’s been a privilege working with CEO Thor Gunnarson and team as they’ve innovated along many different dimensions from novel gameplay modes to cloud distribution to virtual economy design.
We first invested in Mainframe at the Series A last year. Since then, the team has realized their product vision, built cutting-edge infrastructure, and grown to over 55 strong. The Mainframe team is truly unique, combining the best of AAA PC/console talent from companies like CCP, Remedy, and Blizzard, with mobile and free-to-play expertise from companies like Next Games and Sulake.
Long-term, Mainframe will be a critical building block of the Metaverse, providing an easily-accessible, shared virtual space where players can live out alternate identities with rich social and economic networks. As new technologies like web3 and instant games continue to emerge, the future for Mainframe is bright. We couldn’t be more excited to continue supporting the team in the next phase of their journey!
***
 The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein. 
 This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/. 
 Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.
Investing in Mainframe | Andreessen Horowitz
https://a16z.com/2021/11/29/investing-in-mainframe/
https://www.bvp.com/atlas/zoom-ceo-eric-yuan-on-trusting-your-gut-learning-from-failure-and-leaving-behind-an-enduring-legacy/?from=feature
Zoom CEO Eric Yuan on trusting your gut, learning from failure, and leaving behind an enduring legacy
2021-11-16
Importer
<div><div>
<h2>CEO and founder Eric Yuan shares the secrets to his success, plus new lessons learned from a record-shattering year of growth. </h2>
</div><div>
<p>In 1996, Eric Yuan spent four months in Japan sharpening his skills as an engineer. He’d been daydreaming about entrepreneurship, but this itch became an irrepressible drive when he saw Bill Gates deliver a keynote speech at a conference. Eric became convinced that the internet was the future—and that he needed to move from his native Beijing to Silicon Valley to be part of it.</p>
<p>At first, his visa was denied eight times. But Eric would not take no for an answer. Finally, one of the co-founders of Webex sponsored his H1 working visa. “Looking back, it was good to practice my perseverance,” says Eric.</p>
<p>Today Eric Yuan has achieved jaw-dropping success that places him in a very small circle of tech elites. Pre-pandemic, Zoom already had millions of daily active users worldwide, earning reports that dramatically outpaced analyst expectations, and a wildly successful IPO in March 2019. But since the pandemic, they’ve grown by an order of magnitude.</p>
<p>At its peak in December 2019, Zoom had 10 million daily meeting participants. By April 2020 this number shot up to 300 million. The platform now boasts users in more than 80 countries, and its mobile app was number one in the Apple Store. What’s more, Zoom has gone from an enterprise-focused platform to one entrenched in daily life for millions of ordinary people—from heads of state to late night TV shows to family weddings.</p>
<p>Eric sat down with us on the Cloud Giants podcast to reflect on a record-breaking year he could have never dreamed up—the extraordinary highs, the unimaginable pressure, and the surprising lessons learned along the way.</p>
<h2>Stay strong in your convictions, even if others do not believe in you</h2>
<p>When Eric joined Webex as a founding engineer, he witnessed the transformation of this first generation video and collaboration product into a major player that was acquired by Cisco in 2007. He’d also worked his way up to VP of Engineering. But by 2011, Eric was no longer happy.</p>
<p>“Every time I talked to a Webex customer, I was embarrassed,” he says. “I did not see a single happy customer.” Eric realized there was no way to fix all the modern problems plaguing customers by tweaking legacy Webex software. He was convinced that the only way to win back disenchanted customers was to build a new solution from the ground up.</p>
<p>But when he presented his ideas to his coworkers, they were not sold on cannibalizing their existing product. They also doubted whether Eric’s proposal was even possible. In the face of this tremendous pressure from naysayers to abandon his ideas, Eric trusted his gut. He decided to tender his resignation and start his own company.</p>
<p>Buoyed by a strong instinct that he could build something superior, Eric began creating the product we now know as Zoom. The first iteration took him only one year. “I like Nike's mantra,” says Eric. “Just do it. A lot of my friends told me, ‘Eric, please don’t do it.’ But if it's your dream, you need to ignore them.”</p>
<h2>Churned customers are a treasure trove of insights</h2>
<p>While you may lament the loss of each churned customer, Eric advises other founders not to lose sight of the opportunity to learn from them. In the early days of building Zoom, Eric made sure to personally talk to customers who cancelled their subscriptions.</p>
<p>“It was critical for me to understand what had happened every time,” says Eric. “This allowed us to take a step back and keep improving the product with each cancelled subscription.” Through a rigorous process, Eric turned every supposed loss for the business into an unmistakable win—an incrementally superior product that would prevent future churn.</p>
<p>This customer research helped Eric cement his view that reducing friction for the user is paramount. “One of the key reasons why users don’t want to try video conferencing service is that it's so hard to use. It takes 10 clicks and you need to install a huge software file,” he says. “And finally, when you start using it, guess what? The video doesn't work. The audio is very choppy. Then you’ve lost them forever.”</p>
<p>Eric dedicated significant engineering resources to ensuring ease of use, and unbeatable audio and video quality. Applying this customer feedback to multiple iterations of the product helped refine Zoom into the seamless experience it is today—which would become an important factor in its widespread adoption by ordinary people today during the pandemic. And through the customer research process, Eric even won back several churned customers.</p>
<h2>Long-term trust is worth far more than short-term profits</h2>
<p>Eric stresses the value of building trusting relationships with customers. He prizes this above all else, even if it means leaving money on the table. “Quite often our sales team would tell me, ‘Eric, we've got to increase the price. Customers told us we can,’” he says.</p>
<p>But Eric would repeatedly refuse. He remained steadfast in his conviction that some things are worth more than money. “Our philosophy is to always keep adding more value, while keeping the same price,” he says. “Because down the road, the customer will realize ‘Wow, I paid $14.99, but the product just keeps getting better and better.’”</p>
<p>“If you’re a founder, don’t always think about always <a href="https://www.bvp.com/pricing-course">increasing the price</a>,” Eric advises. He believes it’s myopic to think that short-term cash in the bank is worth more than deep usage engagement, which creates momentum that will build over time.</p>
<h2>Keep team morale up in difficult times with perspective</h2>
<p>For all of Zoom’s unimaginable success in 2020—and even with an architecture that was optimized for cloud scale—the team was scrambling in the early days of the pandemic. Suddenly they had to keep service up through a 30x surge in demand. What’s more, they had to build for a variety of new use cases for first time users. Privacy and security became more critical as highly regulated industries like healthcare and legal moved online for the first time, prompting the team to build new features like passwords and waiting rooms.</p>
<p>Eric kept his team in high performance mode through such a personally and professionally trying time by frequently reminding them to take a long-term view. “I would tell them, ‘Fast forward to 2050. When you look back at the younger version of yourself today, will you be proud of yourself? Will you feel you’ve done the right thing for the world?’” Eric believes this perspective is critical to keeping Zoomers recharged and motivated despite immense pressure.</p>
<p>Much like how watching Bill Gates lit an entrepreneurial fire in him, Eric is now inspiring the Zoom team to leave a lasting mark on the world through technology. “I want to leave behind a legacy of serving others and making them happy,” says Eric. “If we do our jobs well then for generations to come, others will think that during COVID-19, Zoom did the right thing for the world.”</p>
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 CEO lessons with Zoom’s Eric Yuan

 * Stay strong in your convictions, even if others do not believe in you
 * Churned customers are a treasure trove of insights
 * Long-term trust is worth far more than short-term profits
 * Keep team morale up in difficult times with perspective
 Contributors
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 11.16.21
 Cloud

 Zoom CEO Eric Yuan on trusting your gut, learning from failure, and leaving behind an enduring legacy

 CEO and founder Eric Yuan shares the secrets to his success, plus new lessons learned from a record-shattering year of growth.

 In 1996, Eric Yuan spent four months in Japan sharpening his skills as an engineer. He’d been daydreaming about entrepreneurship, but this itch became an irrepressible drive when he saw Bill Gates deliver a keynote speech at a conference. Eric became convinced that the internet was the future—and that he needed to move from his native Beijing to Silicon Valley to be part of it.

 At first, his visa was denied eight times. But Eric would not take no for an answer. Finally, one of the co-founders of Webex sponsored his H1 working visa. “Looking back, it was good to practice my perseverance,” says Eric.

 Today Eric Yuan has achieved jaw-dropping success that places him in a very small circle of tech elites. Pre-pandemic, Zoom already had millions of daily active users worldwide, earning reports that dramatically outpaced analyst expectations, and a wildly successful IPO in March 2019. But since the pandemic, they’ve grown by an order of magnitude.

 At its peak in December 2019, Zoom had 10 million daily meeting participants. By April 2020 this number shot up to 300 million. The platform now boasts users in more than 80 countries, and its mobile app was number one in the Apple Store. What’s more, Zoom has gone from an enterprise-focused platform to one entrenched in daily life for millions of ordinary people—from heads of state to late night TV shows to family weddings.

 Eric sat down with us on the Cloud Giants podcast to reflect on a record-breaking year he could have never dreamed up—the extraordinary highs, the unimaginable pressure, and the surprising lessons learned along the way.

 Stay strong in your convictions, even if others do not believe in you

 When Eric joined Webex as a founding engineer, he witnessed the transformation of this first generation video and collaboration product into a major player that was acquired by Cisco in 2007. He’d also worked his way up to VP of Engineering. But by 2011, Eric was no longer happy.

 “Every time I talked to a Webex customer, I was embarrassed,” he says. “I did not see a single happy customer.” Eric realized there was no way to fix all the modern problems plaguing customers by tweaking legacy Webex software. He was convinced that the only way to win back disenchanted customers was to build a new solution from the ground up.

 But when he presented his ideas to his coworkers, they were not sold on cannibalizing their existing product. They also doubted whether Eric’s proposal was even possible. In the face of this tremendous pressure from naysayers to abandon his ideas, Eric trusted his gut. He decided to tender his resignation and start his own company.

 Buoyed by a strong instinct that he could build something superior, Eric began creating the product we now know as Zoom. The first iteration took him only one year. “I like Nike's mantra,” says Eric. “Just do it. A lot of my friends told me, ‘Eric, please don’t do it.’ But if it's your dream, you need to ignore them.”

 Churned customers are a treasure trove of insights

 While you may lament the loss of each churned customer, Eric advises other founders not to lose sight of the opportunity to learn from them. In the early days of building Zoom, Eric made sure to personally talk to customers who cancelled their subscriptions.

 “It was critical for me to understand what had happened every time,” says Eric. “This allowed us to take a step back and keep improving the product with each cancelled subscription.” Through a rigorous process, Eric turned every supposed loss for the business into an unmistakable win—an incrementally superior product that would prevent future churn.

 This customer research helped Eric cement his view that reducing friction for the user is paramount. “One of the key reasons why users don’t want to try video conferencing service is that it's so hard to use. It takes 10 clicks and you need to install a huge software file,” he says. “And finally, when you start using it, guess what? The video doesn't work. The audio is very choppy. Then you’ve lost them forever.”

 Eric dedicated significant engineering resources to ensuring ease of use, and unbeatable audio and video quality. Applying this customer feedback to multiple iterations of the product helped refine Zoom into the seamless experience it is today—which would become an important factor in its widespread adoption by ordinary people today during the pandemic. And through the customer research process, Eric even won back several churned customers.

 Long-term trust is worth far more than short-term profits

 Eric stresses the value of building trusting relationships with customers. He prizes this above all else, even if it means leaving money on the table. “Quite often our sales team would tell me, ‘Eric, we've got to increase the price. Customers told us we can,’” he says.

 But Eric would repeatedly refuse. He remained steadfast in his conviction that some things are worth more than money. “Our philosophy is to always keep adding more value, while keeping the same price,” he says. “Because down the road, the customer will realize ‘Wow, I paid $14.99, but the product just keeps getting better and better.’”

 “If you’re a founder, don’t always think about always increasing the price,” Eric advises. He believes it’s myopic to think that short-term cash in the bank is worth more than deep usage engagement, which creates momentum that will build over time.

 Keep team morale up in difficult times with perspective

 For all of Zoom’s unimaginable success in 2020—and even with an architecture that was optimized for cloud scale—the team was scrambling in the early days of the pandemic. Suddenly they had to keep service up through a 30x surge in demand. What’s more, they had to build for a variety of new use cases for first time users. Privacy and security became more critical as highly regulated industries like healthcare and legal moved online for the first time, prompting the team to build new features like passwords and waiting rooms.

 Eric kept his team in high performance mode through such a personally and professionally trying time by frequently reminding them to take a long-term view. “I would tell them, ‘Fast forward to 2050. When you look back at the younger version of yourself today, will you be proud of yourself? Will you feel you’ve done the right thing for the world?’” Eric believes this perspective is critical to keeping Zoomers recharged and motivated despite immense pressure.

 Much like how watching Bill Gates lit an entrepreneurial fire in him, Eric is now inspiring the Zoom team to leave a lasting mark on the world through technology. “I want to leave behind a legacy of serving others and making them happy,” says Eric. “If we do our jobs well then for generations to come, others will think that during COVID-19, Zoom did the right thing for the world.”

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 © Bessemer Venture Partners
CEO and founder Eric Yuan shares the secrets to his success, plus new lessons learned from a record-shattering year of growth. 
 
In 1996, Eric Yuan spent four months in Japan sharpening his skills as an engineer. He’d been daydreaming about entrepreneurship, but this itch became an irrepressible drive when he saw Bill Gates deliver a keynote speech at a conference. Eric became convinced that the internet was the future—and that he needed to move from his native Beijing to Silicon Valley to be part of it.
At first, his visa was denied eight times. But Eric would not take no for an answer. Finally, one of the co-founders of Webex sponsored his H1 working visa. “Looking back, it was good to practice my perseverance,” says Eric.
Today Eric Yuan has achieved jaw-dropping success that places him in a very small circle of tech elites. Pre-pandemic, Zoom already had millions of daily active users worldwide, earning reports that dramatically outpaced analyst expectations, and a wildly successful IPO in March 2019. But since the pandemic, they’ve grown by an order of magnitude.
At its peak in December 2019, Zoom had 10 million daily meeting participants. By April 2020 this number shot up to 300 million. The platform now boasts users in more than 80 countries, and its mobile app was number one in the Apple Store. What’s more, Zoom has gone from an enterprise-focused platform to one entrenched in daily life for millions of ordinary people—from heads of state to late night TV shows to family weddings.
Eric sat down with us on the Cloud Giants podcast to reflect on a record-breaking year he could have never dreamed up—the extraordinary highs, the unimaginable pressure, and the surprising lessons learned along the way.
Stay strong in your convictions, even if others do not believe in you
When Eric joined Webex as a founding engineer, he witnessed the transformation of this first generation video and collaboration product into a major player that was acquired by Cisco in 2007. He’d also worked his way up to VP of Engineering. But by 2011, Eric was no longer happy.
“Every time I talked to a Webex customer, I was embarrassed,” he says. “I did not see a single happy customer.” Eric realized there was no way to fix all the modern problems plaguing customers by tweaking legacy Webex software. He was convinced that the only way to win back disenchanted customers was to build a new solution from the ground up.
But when he presented his ideas to his coworkers, they were not sold on cannibalizing their existing product. They also doubted whether Eric’s proposal was even possible. In the face of this tremendous pressure from naysayers to abandon his ideas, Eric trusted his gut. He decided to tender his resignation and start his own company.
Buoyed by a strong instinct that he could build something superior, Eric began creating the product we now know as Zoom. The first iteration took him only one year. “I like Nike's mantra,” says Eric. “Just do it. A lot of my friends told me, ‘Eric, please don’t do it.’ But if it's your dream, you need to ignore them.”
Churned customers are a treasure trove of insights
While you may lament the loss of each churned customer, Eric advises other founders not to lose sight of the opportunity to learn from them. In the early days of building Zoom, Eric made sure to personally talk to customers who cancelled their subscriptions.
“It was critical for me to understand what had happened every time,” says Eric. “This allowed us to take a step back and keep improving the product with each cancelled subscription.” Through a rigorous process, Eric turned every supposed loss for the business into an unmistakable win—an incrementally superior product that would prevent future churn.
This customer research helped Eric cement his view that reducing friction for the user is paramount. “One of the key reasons why users don’t want to try video conferencing service is that it's so hard to use. It takes 10 clicks and you need to install a huge software file,” he says. “And finally, when you start using it, guess what? The video doesn't work. The audio is very choppy. Then you’ve lost them forever.”
Eric dedicated significant engineering resources to ensuring ease of use, and unbeatable audio and video quality. Applying this customer feedback to multiple iterations of the product helped refine Zoom into the seamless experience it is today—which would become an important factor in its widespread adoption by ordinary people today during the pandemic. And through the customer research process, Eric even won back several churned customers.
Long-term trust is worth far more than short-term profits
Eric stresses the value of building trusting relationships with customers. He prizes this above all else, even if it means leaving money on the table. “Quite often our sales team would tell me, ‘Eric, we've got to increase the price. Customers told us we can,’” he says.
But Eric would repeatedly refuse. He remained steadfast in his conviction that some things are worth more than money. “Our philosophy is to always keep adding more value, while keeping the same price,” he says. “Because down the road, the customer will realize ‘Wow, I paid $14.99, but the product just keeps getting better and better.’”
“If you’re a founder, don’t always think about always increasing the price,” Eric advises. He believes it’s myopic to think that short-term cash in the bank is worth more than deep usage engagement, which creates momentum that will build over time.
Keep team morale up in difficult times with perspective
For all of Zoom’s unimaginable success in 2020—and even with an architecture that was optimized for cloud scale—the team was scrambling in the early days of the pandemic. Suddenly they had to keep service up through a 30x surge in demand. What’s more, they had to build for a variety of new use cases for first time users. Privacy and security became more critical as highly regulated industries like healthcare and legal moved online for the first time, prompting the team to build new features like passwords and waiting rooms.
Eric kept his team in high performance mode through such a personally and professionally trying time by frequently reminding them to take a long-term view. “I would tell them, ‘Fast forward to 2050. When you look back at the younger version of yourself today, will you be proud of yourself? Will you feel you’ve done the right thing for the world?’” Eric believes this perspective is critical to keeping Zoomers recharged and motivated despite immense pressure.
Much like how watching Bill Gates lit an entrepreneurial fire in him, Eric is now inspiring the Zoom team to leave a lasting mark on the world through technology. “I want to leave behind a legacy of serving others and making them happy,” says Eric. “If we do our jobs well then for generations to come, others will think that during COVID-19, Zoom did the right thing for the world.”
Zoom CEO Eric Yuan on trusting your gut, learning from failure, and leaving behind an enduring legacy
https://www.bvp.com/atlas/zoom-ceo-eric-yuan-on-trusting-your-gut-learning-from-failure-and-leaving-behind-an-enduring-legacy/?from=feature
https://www.bvp.com/atlas/cleaning-up-tech-debt-on-mt-saas-a-conversation-with-salto-io-s-gil-hoffer/?from=feature
Cleaning up tech debt on MT SAAS: A conversation with Salto’s Gil Hoffer
2021-10-07
Importer
<div><div>
<h2>One unintended consequence from the remarkable rise in SaaS is the amount of tech stack debris.</h2>
</div><div>
<p>During the pandemic, climbers removed <a href="https://www.cmmonline.com/news/climbers-remove-over-2-tons-of-garbage-from-mount-everest">2.2 tons of trash</a> from Everest base camp and its surrounding environs. It’s a reminder that our own Himalayan range—some of <a href="https://www.bvp.com/atlas/mt-saas">MT. SAAS</a> and the thousands of core business applications out there—also needs cleaning.</p>
<p>There’s so much great SaaS empowering businesses, but they pose the added challenge of monitoring, controlling, and connecting them. Many tech stacks are littered with the accumulated detritus of years of inherited configurations, stairs-to-nowhere integrations, papered-over-problems, on-premise thinking, and of course, tech debt. This is more than an issue of aesthetics. These problems clog mission-critical systems, impeding the core internal business processes and revenue operations that must be more responsive and streamlined in order to keep pace with modern business pace.</p>
<p><strong>But what if things were different? To get these answers, I sat down with <a href="https://www.linkedin.com/in/gilhoffer">Gil Hoffer</a>, Co-Founder and CTO of <a href="https://www.salto.io/">Salto</a>, a Bessemer portfolio company. In this conversation, Gil shares the five best practices for business application management, and how to clean up these systems—large and small.</strong></p>
<h3><strong>Top takeaways on business application management</strong>   </h3>
<ol>
<li>Recognize cross-app clutter as one unified problem (and your business applications as one product)</li>
<li>Clean continuously and <a href="https://www.salto.io/philosophy">treat it as an engineering profession</a></li>
<li>Build for consistent cross-application configuration and measurement</li>
<li>Use your tech debt as a tool </li>
<li>Recognize the career trajectory and the critical role business application management plays in a SaaS organization—no matter the size.</li>
</ol>
<h2>SaaS has won, but now we need to manage  business application sprawl</h2>
<p>The biggest change I see in how companies manage their SaaS is that the “best-of-breed” approach, where each line of business selects its own systems, has won. IT is no longer the sole gatekeeper of who buys new software and companies today have, on average, 800 SaaS applications.</p>
<p>“This is a good thing. It allows each of those lines of business to be their most efficient. And it’s made possible because each system has its own UI where people who can’t code nevertheless act as developers,” Gil explains to me. “Those business system managers and administrators customize their business applications so heavily they’re essentially building products within them, and between them. For instance, a quote-to-cash pipeline that spans the CRM and ERP. Or a hire-to-retire pathway through all HR systems.”</p>
<p>What’s really remarkable here is what used to take dozens or hundreds of developers can now be done by one person. But it also introduced a new kind of complexity, says Gil.</p>
<p>“If you have hundreds of business applications each operated by different groups, you have a highly distributed system, and today, there isn’t a lot of central awareness or control. If you want them to all function and keep the data accurate, you’d need new tools and methods for managing distributed systems. And that isn’t really happening for most companies.”</p>
<h2>Below MT SAAS there’s a whole range of summits that need management</h2>
<p>When we talk about <a href="https://www.bvp.com/atlas/mt-saas">“MT SAAS,”</a> we’re of course referring to the leading cloud companies such as Salesforce, Shopify, and Adobe. All these companies have transformed the industry. But when you actually look at the face of the business applications industry today, these are the summits, but “there’s also an entire range of hundreds or thousands of other SaaS companies that are also mission-critical,” says Gil.</p>
<p>The real challenge is every one of those summits is different. Each has its own interface, data models, schema, and terminology, and that makes it very difficult to attempt a cleanup. Teams need the right tooling to climb that mountain and implement a business process. You need to strategize what your entire organization needs, and then you need to apply it to each application and you need to do it continuously.</p>
<p>What’s more, each of those mountains are constantly changing. “Just like real geography, everything in business applications is in motion. Slow motion, but in motion,” Gil tells me. “Each software is updating and improving. And the question is, given that we’re likely only going to have more SaaS to manage, how do you do all that? That’s what modern business applications teams are wrestling with.”</p>
<h2>Business applications teams can learn from DevOps</h2>
<p>I think it’s helpful to be very clear about what the “trash” is in our mountain analogy, when talking about litter atop MT SAAS—it’s the technical debt in the form of half-finished decisions, unplanned configuration changes, new custom objects, missing metadata, settings nobody else knows about, or just a lack of documentation. It’s the reason that when a sales leader asks their CRM administrator why a report is down, or why a field isn’t showing, it can take weeks or months to figure out the answer. </p>
<p>Gil believes business applications teams can learn a lot from how software developers operate. They have been working on philosophies, methodologies, frameworks, and systems to deal with these sorts of issues for 60 years, in some cases. The first version control software was <a href="https://en.wikipedia.org/wiki/Version_control">launched in 1962</a>. “Today there are services like GitHub, GitLab, and BitBucket that allow many developers to coordinate work on one piece of code, branching off, editing, merging, and submitting pull requests. Or to maintain multiple versions of a system to debut and test before things reach production.”</p>
<p>But most business systems administrators don’t have that. “Today, business applications teams working out of the UI of all these systems don’t have all that stuff, but they really need it. Without it,” in Gil’s words, “the ‘trash’ just accumulates.” </p>
<h2>The cost of chaos in business apps is that the entire organization functions less efficiently</h2>
<p>With this in mind, Gil shares a few stories with me that are emblematic of the accumulating tech debris: “It’s Thursday night at the end of the quarter and a team realizes their ERP simply stopped working, and they’re stuck. So the entire team works the entire weekend just to figure out that someone made a change somewhere that they weren’t supposed to, but because the  ERP doesn’t log changes like that, there was no way of knowing.” </p>
<p>He shares another example: Someone gets a call from their boss, who got a call from their boss, because the CEO called about a broken dashboard. What they soon learned was that because somebody somewhere changed a field without knowing certain dependencies there was a chain reaction that had to be undone. </p>
<p>Or here’s a devastating one: A company realized its demo requests for the past few months weren’t being assigned to the sales team and lost out on millions of dollars of pipeline. </p>
<p>“In truth, the costs of errors in business applications are larger than they are in the product, or software development, because there aren’t as many safeguards,” Gil shares. “The product has all sorts of tools to test and rollback; it’s much more resilient.” </p>
<blockquote><p>To be more like software teams, business applications teams have to start thinking of all those applications as one united product, and themselves, product managers. </p></blockquote>
<p>Ultimately, this is everybody’s responsibility, but it really falls on those business applications teams. If you think about climbing Mt. Everest, it’s up to every person who climbs to  pick up their trash, and if they find trash, take it with them. This is all the administrators, developers, and architects who work on those applications. </p>
<h2>Business application management is complex and there is no one right approach</h2>
<p>There are just so many facets to the challenge of maintaining and scaling business applications. For example, with many business applications, how do you keep your data in sync? How do you build a process which works across those different business applications? </p>
<p>As we often explore at Bessemer, and as Gil explains, CTOs and CIOs are seeing some great companies right now that deal with that. There’s integrators like Zapier, there’s Workato which helps you build cross-business application processes and automations, and then there’s Slack or Teams, and Jira or ServiceNow, which create a central hub for these conversations. </p>
<blockquote><p>"Managing business applications is where managing infrastructure was 10-15 years ago."</p></blockquote>
<p>And then you’ve got your companies like BetterCloud and Torii that help with managing the cost of these business applications, which can get out of hand quickly, just because of the multiplication of thousands of users in hundreds of applications. </p>
<p>“Managing business applications is where managing infrastructure was 10-15 years ago, and where <a href="https://www.hashicorp.com/">HashiCorp</a> and <a href="https://www.terraform.io/">Terraform</a> help today,” Gil says. “I think that’s a highly relevant domain for the team here at Salto to be learning from as we work on making business applications more manageable.”</p>
<p>In my conversations with Gil since 2019, when we made our first investment in Salto, I’ve reframed my perspective and realize there’s something missing from the “tech debt” conversation—the idea that debt is sometimes desirable and exists for a reason.</p>
<p>“Just like financial debt, it’s a tool,” says Gil. “You knowingly create debt when things are urgent and you have to move faster in one area, and you know you’ll have to return to pay it off.” </p>
<p>That’s the nature of growing a business. You’re going to pay interest on those decisions, but sometimes it’s essential to make them to achieve your goals and scale. “The challenge is managing your debt and keeping it down to a manageable  level,” Gil continues. “And that’s why it has to be a continuous practice, and something you get your arms around early.” </p>
<h2>From mindset to methodology: careers in business application management are on the rise</h2>
<p>“The way I see it, you need to treat a career in business apps as an engineering profession,” Gil tells me. “Just as an engineer takes pride in building the product, so too can those who manage business applications, all from a first-principles approach. Business applications, after all, help the entire business run and require systems-minded people.” </p>
<p>This mindset, and all the software management practices that come with it, is the key to any model company’s success. Business application management is starting to become a practice people talk about and prepare for. It requires the right team, the right talent, the right skill sets, the right motivation, and of course, the right technology, much of it borrowed from what’s already happened in DevOps. We saw the rise of developer boot camps in the 2010s, and soon, we expect to see boot camps dedicated for people pursuing careers in business application management. </p>
<p>As organizations of all sizes—from emerging startups to the members of MT. SAAS—begin to address how to clean up their business application environment, they’ll begin to realize there’s no single approach. The work requires more sophisticated understanding and sometimes, finesse. Each organization is going to need different things at each stage and have different requirements. </p>
<p>“The best thing a leader can do is empower the business applications team to treat it like a product,” Gil says. “This is how the most successful companies treat application management, as they strive to scale to their next summit.”</p>
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 Top takeaways on business application management

 * Business application sprawl
 * A range of summits that need management
 * Learning from DevOps
 * The cost of chaos in business apps
 * The complexity of business application management
 * Technical debt is a tool
 * Careers on the rise
 Contributors
 Adam Fisher
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 10.7.21
 Enterprise

 Cleaning up tech debt on MT SAAS: A conversation with Salto’s Gil Hoffer

 One unintended consequence from the remarkable rise in SaaS is the amount of tech stack debris.

 During the pandemic, climbers removed 2.2 tons of trash from Everest base camp and its surrounding environs. It’s a reminder that our own Himalayan range—some of MT. SAAS and the thousands of core business applications out there—also needs cleaning.

 There’s so much great SaaS empowering businesses, but they pose the added challenge of monitoring, controlling, and connecting them. Many tech stacks are littered with the accumulated detritus of years of inherited configurations, stairs-to-nowhere integrations, papered-over-problems, on-premise thinking, and of course, tech debt. This is more than an issue of aesthetics. These problems clog mission-critical systems, impeding the core internal business processes and revenue operations that must be more responsive and streamlined in order to keep pace with modern business pace.

 But what if things were different? To get these answers, I sat down with Gil Hoffer, Co-Founder and CTO of Salto, a Bessemer portfolio company. In this conversation, Gil shares the five best practices for business application management, and how to clean up these systems—large and small.

 Top takeaways on business application management

 1. Recognize cross-app clutter as one unified problem (and your business applications as one product)
 2. Clean continuously and treat it as an engineering profession
 3. Build for consistent cross-application configuration and measurement
 4. Use your tech debt as a tool
 5. Recognize the career trajectory and the critical role business application management plays in a SaaS organization—no matter the size.

 SaaS has won, but now we need to manage business application sprawl

 The biggest change I see in how companies manage their SaaS is that the “best-of-breed” approach, where each line of business selects its own systems, has won. IT is no longer the sole gatekeeper of who buys new software and companies today have, on average, 800 SaaS applications.

 “This is a good thing. It allows each of those lines of business to be their most efficient. And it’s made possible because each system has its own UI where people who can’t code nevertheless act as developers,” Gil explains to me. “Those business system managers and administrators customize their business applications so heavily they’re essentially building products within them, and between them. For instance, a quote-to-cash pipeline that spans the CRM and ERP. Or a hire-to-retire pathway through all HR systems.”

 What’s really remarkable here is what used to take dozens or hundreds of developers can now be done by one person. But it also introduced a new kind of complexity, says Gil.

 “If you have hundreds of business applications each operated by different groups, you have a highly distributed system, and today, there isn’t a lot of central awareness or control. If you want them to all function and keep the data accurate, you’d need new tools and methods for managing distributed systems. And that isn’t really happening for most companies.”

 Below MT SAAS there’s a whole range of summits that need management

 When we talk about “MT SAAS,” we’re of course referring to the leading cloud companies such as Salesforce, Shopify, and Adobe. All these companies have transformed the industry. But when you actually look at the face of the business applications industry today, these are the summits, but “there’s also an entire range of hundreds or thousands of other SaaS companies that are also mission-critical,” says Gil.

 The real challenge is every one of those summits is different. Each has its own interface, data models, schema, and terminology, and that makes it very difficult to attempt a cleanup. Teams need the right tooling to climb that mountain and implement a business process. You need to strategize what your entire organization needs, and then you need to apply it to each application and you need to do it continuously.

 What’s more, each of those mountains are constantly changing. “Just like real geography, everything in business applications is in motion. Slow motion, but in motion,” Gil tells me. “Each software is updating and improving. And the question is, given that we’re likely only going to have more SaaS to manage, how do you do all that? That’s what modern business applications teams are wrestling with.”

 Business applications teams can learn from DevOps

 I think it’s helpful to be very clear about what the “trash” is in our mountain analogy, when talking about litter atop MT SAAS—it’s the technical debt in the form of half-finished decisions, unplanned configuration changes, new custom objects, missing metadata, settings nobody else knows about, or just a lack of documentation. It’s the reason that when a sales leader asks their CRM administrator why a report is down, or why a field isn’t showing, it can take weeks or months to figure out the answer.

 Gil believes business applications teams can learn a lot from how software developers operate. They have been working on philosophies, methodologies, frameworks, and systems to deal with these sorts of issues for 60 years, in some cases. The first version control software was launched in 1962. “Today there are services like GitHub, GitLab, and BitBucket that allow many developers to coordinate work on one piece of code, branching off, editing, merging, and submitting pull requests. Or to maintain multiple versions of a system to debut and test before things reach production.”

 But most business systems administrators don’t have that. “Today, business applications teams working out of the UI of all these systems don’t have all that stuff, but they really need it. Without it,” in Gil’s words, “the ‘trash’ just accumulates.”

 The cost of chaos in business apps is that the entire organization functions less efficiently

 With this in mind, Gil shares a few stories with me that are emblematic of the accumulating tech debris: “It’s Thursday night at the end of the quarter and a team realizes their ERP simply stopped working, and they’re stuck. So the entire team works the entire weekend just to figure out that someone made a change somewhere that they weren’t supposed to, but because the ERP doesn’t log changes like that, there was no way of knowing.”

 He shares another example: Someone gets a call from their boss, who got a call from their boss, because the CEO called about a broken dashboard. What they soon learned was that because somebody somewhere changed a field without knowing certain dependencies there was a chain reaction that had to be undone.

 Or here’s a devastating one: A company realized its demo requests for the past few months weren’t being assigned to the sales team and lost out on millions of dollars of pipeline.

 “In truth, the costs of errors in business applications are larger than they are in the product, or software development, because there aren’t as many safeguards,” Gil shares. “The product has all sorts of tools to test and rollback; it’s much more resilient.”

 To be more like software teams, business applications teams have to start thinking of all those applications as one united product, and themselves, product managers.

 Ultimately, this is everybody’s responsibility, but it really falls on those business applications teams. If you think about climbing Mt. Everest, it’s up to every person who climbs to pick up their trash, and if they find trash, take it with them. This is all the administrators, developers, and architects who work on those applications.

 Business application management is complex and there is no one right approach

 There are just so many facets to the challenge of maintaining and scaling business applications. For example, with many business applications, how do you keep your data in sync? How do you build a process which works across those different business applications?

 As we often explore at Bessemer, and as Gil explains, CTOs and CIOs are seeing some great companies right now that deal with that. There’s integrators like Zapier, there’s Workato which helps you build cross-business application processes and automations, and then there’s Slack or Teams, and Jira or ServiceNow, which create a central hub for these conversations.

 "Managing business applications is where managing infrastructure was 10-15 years ago."

 And then you’ve got your companies like BetterCloud and Torii that help with managing the cost of these business applications, which can get out of hand quickly, just because of the multiplication of thousands of users in hundreds of applications.

 “Managing business applications is where managing infrastructure was 10-15 years ago, and where HashiCorp and Terraform help today,” Gil says. “I think that’s a highly relevant domain for the team here at Salto to be learning from as we work on making business applications more manageable.”

 Technical debt is a tool: Use it to your advantage

 In my conversations with Gil since 2019, when we made our first investment in Salto, I’ve reframed my perspective and realize there’s something missing from the “tech debt” conversation—the idea that debt is sometimes desirable and exists for a reason.

 “Just like financial debt, it’s a tool,” says Gil. “You knowingly create debt when things are urgent and you have to move faster in one area, and you know you’ll have to return to pay it off.”

 That’s the nature of growing a business. You’re going to pay interest on those decisions, but sometimes it’s essential to make them to achieve your goals and scale. “The challenge is managing your debt and keeping it down to a manageable level,” Gil continues. “And that’s why it has to be a continuous practice, and something you get your arms around early.”

 From mindset to methodology: careers in business application management are on the rise

 “The way I see it, you need to treat a career in business apps as an engineering profession,” Gil tells me. “Just as an engineer takes pride in building the product, so too can those who manage business applications, all from a first-principles approach. Business applications, after all, help the entire business run and require systems-minded people.”

 This mindset, and all the software management practices that come with it, is the key to any model company’s success. Business application management is starting to become a practice people talk about and prepare for. It requires the right team, the right talent, the right skill sets, the right motivation, and of course, the right technology, much of it borrowed from what’s already happened in DevOps. We saw the rise of developer boot camps in the 2010s, and soon, we expect to see boot camps dedicated for people pursuing careers in business application management.

 As organizations of all sizes—from emerging startups to the members of MT. SAAS—begin to address how to clean up their business application environment, they’ll begin to realize there’s no single approach. The work requires more sophisticated understanding and sometimes, finesse. Each organization is going to need different things at each stage and have different requirements.

 “The best thing a leader can do is empower the business applications team to treat it like a product,” Gil says. “This is how the most successful companies treat application management, as they strive to scale to their next summit.”

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One unintended consequence from the remarkable rise in SaaS is the amount of tech stack debris.
 
During the pandemic, climbers removed 2.2 tons of trash from Everest base camp and its surrounding environs. It’s a reminder that our own Himalayan range—some of MT. SAAS and the thousands of core business applications out there—also needs cleaning.
There’s so much great SaaS empowering businesses, but they pose the added challenge of monitoring, controlling, and connecting them. Many tech stacks are littered with the accumulated detritus of years of inherited configurations, stairs-to-nowhere integrations, papered-over-problems, on-premise thinking, and of course, tech debt. This is more than an issue of aesthetics. These problems clog mission-critical systems, impeding the core internal business processes and revenue operations that must be more responsive and streamlined in order to keep pace with modern business pace.
 But what if things were different? To get these answers, I sat down with Gil Hoffer, Co-Founder and CTO of Salto, a Bessemer portfolio company. In this conversation, Gil shares the five best practices for business application management, and how to clean up these systems—large and small. 
 Top takeaways on business application management   
Recognize cross-app clutter as one unified problem (and your business applications as one product)
Clean continuously and treat it as an engineering profession 
Build for consistent cross-application configuration and measurement
Use your tech debt as a tool 
Recognize the career trajectory and the critical role business application management plays in a SaaS organization—no matter the size.
SaaS has won, but now we need to manage  business application sprawl
The biggest change I see in how companies manage their SaaS is that the “best-of-breed” approach, where each line of business selects its own systems, has won. IT is no longer the sole gatekeeper of who buys new software and companies today have, on average, 800 SaaS applications.
“This is a good thing. It allows each of those lines of business to be their most efficient. And it’s made possible because each system has its own UI where people who can’t code nevertheless act as developers,” Gil explains to me. “Those business system managers and administrators customize their business applications so heavily they’re essentially building products within them, and between them. For instance, a quote-to-cash pipeline that spans the CRM and ERP. Or a hire-to-retire pathway through all HR systems.”
What’s really remarkable here is what used to take dozens or hundreds of developers can now be done by one person. But it also introduced a new kind of complexity, says Gil.
“If you have hundreds of business applications each operated by different groups, you have a highly distributed system, and today, there isn’t a lot of central awareness or control. If you want them to all function and keep the data accurate, you’d need new tools and methods for managing distributed systems. And that isn’t really happening for most companies.”
Below MT SAAS there’s a whole range of summits that need management
When we talk about “MT SAAS,” we’re of course referring to the leading cloud companies such as Salesforce, Shopify, and Adobe. All these companies have transformed the industry. But when you actually look at the face of the business applications industry today, these are the summits, but “there’s also an entire range of hundreds or thousands of other SaaS companies that are also mission-critical,” says Gil.
The real challenge is every one of those summits is different. Each has its own interface, data models, schema, and terminology, and that makes it very difficult to attempt a cleanup. Teams need the right tooling to climb that mountain and implement a business process. You need to strategize what your entire organization needs, and then you need to apply it to each application and you need to do it continuously.
What’s more, each of those mountains are constantly changing. “Just like real geography, everything in business applications is in motion. Slow motion, but in motion,” Gil tells me. “Each software is updating and improving. And the question is, given that we’re likely only going to have more SaaS to manage, how do you do all that? That’s what modern business applications teams are wrestling with.”
Business applications teams can learn from DevOps
I think it’s helpful to be very clear about what the “trash” is in our mountain analogy, when talking about litter atop MT SAAS—it’s the technical debt in the form of half-finished decisions, unplanned configuration changes, new custom objects, missing metadata, settings nobody else knows about, or just a lack of documentation. It’s the reason that when a sales leader asks their CRM administrator why a report is down, or why a field isn’t showing, it can take weeks or months to figure out the answer. 
Gil believes business applications teams can learn a lot from how software developers operate. They have been working on philosophies, methodologies, frameworks, and systems to deal with these sorts of issues for 60 years, in some cases. The first version control software was launched in 1962. “Today there are services like GitHub, GitLab, and BitBucket that allow many developers to coordinate work on one piece of code, branching off, editing, merging, and submitting pull requests. Or to maintain multiple versions of a system to debut and test before things reach production.”
But most business systems administrators don’t have that. “Today, business applications teams working out of the UI of all these systems don’t have all that stuff, but they really need it. Without it,” in Gil’s words, “the ‘trash’ just accumulates.” 
The cost of chaos in business apps is that the entire organization functions less efficiently
With this in mind, Gil shares a few stories with me that are emblematic of the accumulating tech debris: “It’s Thursday night at the end of the quarter and a team realizes their ERP simply stopped working, and they’re stuck. So the entire team works the entire weekend just to figure out that someone made a change somewhere that they weren’t supposed to, but because the  ERP doesn’t log changes like that, there was no way of knowing.” 
He shares another example: Someone gets a call from their boss, who got a call from their boss, because the CEO called about a broken dashboard. What they soon learned was that because somebody somewhere changed a field without knowing certain dependencies there was a chain reaction that had to be undone. 
Or here’s a devastating one: A company realized its demo requests for the past few months weren’t being assigned to the sales team and lost out on millions of dollars of pipeline. 
“In truth, the costs of errors in business applications are larger than they are in the product, or software development, because there aren’t as many safeguards,” Gil shares. “The product has all sorts of tools to test and rollback; it’s much more resilient.” 
 To be more like software teams, business applications teams have to start thinking of all those applications as one united product, and themselves, product managers.  
Ultimately, this is everybody’s responsibility, but it really falls on those business applications teams. If you think about climbing Mt. Everest, it’s up to every person who climbs to  pick up their trash, and if they find trash, take it with them. This is all the administrators, developers, and architects who work on those applications. 
Business application management is complex and there is no one right approach
There are just so many facets to the challenge of maintaining and scaling business applications. For example, with many business applications, how do you keep your data in sync? How do you build a process which works across those different business applications? 
As we often explore at Bessemer, and as Gil explains, CTOs and CIOs are seeing some great companies right now that deal with that. There’s integrators like Zapier, there’s Workato which helps you build cross-business application processes and automations, and then there’s Slack or Teams, and Jira or ServiceNow, which create a central hub for these conversations. 
 "Managing business applications is where managing infrastructure was 10-15 years ago." 
And then you’ve got your companies like BetterCloud and Torii that help with managing the cost of these business applications, which can get out of hand quickly, just because of the multiplication of thousands of users in hundreds of applications. 
“Managing business applications is where managing infrastructure was 10-15 years ago, and where HashiCorp and Terraform help today,” Gil says. “I think that’s a highly relevant domain for the team here at Salto to be learning from as we work on making business applications more manageable.”
In my conversations with Gil since 2019, when we made our first investment in Salto, I’ve reframed my perspective and realize there’s something missing from the “tech debt” conversation—the idea that debt is sometimes desirable and exists for a reason.
“Just like financial debt, it’s a tool,” says Gil. “You knowingly create debt when things are urgent and you have to move faster in one area, and you know you’ll have to return to pay it off.” 
That’s the nature of growing a business. You’re going to pay interest on those decisions, but sometimes it’s essential to make them to achieve your goals and scale. “The challenge is managing your debt and keeping it down to a manageable  level,” Gil continues. “And that’s why it has to be a continuous practice, and something you get your arms around early.” 
From mindset to methodology: careers in business application management are on the rise
“The way I see it, you need to treat a career in business apps as an engineering profession,” Gil tells me. “Just as an engineer takes pride in building the product, so too can those who manage business applications, all from a first-principles approach. Business applications, after all, help the entire business run and require systems-minded people.” 
This mindset, and all the software management practices that come with it, is the key to any model company’s success. Business application management is starting to become a practice people talk about and prepare for. It requires the right team, the right talent, the right skill sets, the right motivation, and of course, the right technology, much of it borrowed from what’s already happened in DevOps. We saw the rise of developer boot camps in the 2010s, and soon, we expect to see boot camps dedicated for people pursuing careers in business application management. 
As organizations of all sizes—from emerging startups to the members of MT. SAAS—begin to address how to clean up their business application environment, they’ll begin to realize there’s no single approach. The work requires more sophisticated understanding and sometimes, finesse. Each organization is going to need different things at each stage and have different requirements. 
“The best thing a leader can do is empower the business applications team to treat it like a product,” Gil says. “This is how the most successful companies treat application management, as they strive to scale to their next summit.”
Cleaning up tech debt on MT SAAS: A conversation with Salto’s Gil Hoffer
https://www.bvp.com/atlas/cleaning-up-tech-debt-on-mt-saas-a-conversation-with-salto-io-s-gil-hoffer/?from=feature
https://www.gsb.stanford.edu/insights/vcs-covid-19-were-doing-fine-thanks
VCs and COVID-19: We’re Doing Fine, Thanks
2020-09-22
Lee Simmons
<div><p>A survey of more than 1,000 venture capitalists finds that investors predict only a tiny dip in portfolio performance — and that the cash spigot remains open.</p><div><article><div>
 
 
 
 <p>Despite the coronavirus pandemic, venture capitalists report that they are as busy as ever and optimistic about the future. | Reuters/Christian Hartmann</p>
 </div>
 </article>
<p>In the early weeks of the COVID-19 pandemic, venture capital firms, like most of the U.S. economy, essentially shut down. “A lot of VCs were telling me that everything just froze,” says Ilya A. Strebulaev, professor of finance at Stanford Graduate School of Business and director of the school’s <a href="/faculty-research/centers-initiatives/vci">Venture Capital Initiative</a>.</p>
<p>Indeed, an April report by the National Venture Capital Association warned of a looming “capital crunch,” saying that “investment in the startup ecosystem is expected to drop significantly” as investors shy away from these “high-risk and illiquid” companies.</p>
<p>“Fasten your seatbelts,” the authors wrote. “It’s going to be a bumpy ride.”</p>
<p>As it turns out, the ride has been surprisingly smooth. In a newly released survey of more than 1,000 venture capitalists, representing some 900 firms, <a href="/faculty-research/faculty/ilya-strebulaev">Strebulaev</a> and his coresearchers found that VCs are as busy as ever. And they are, in fact, remarkably optimistic about the future.</p>
<p>While the pace of new investments did slow to 71% of normal in the first half of 2020, that figure included the initial weeks of paralysis. For the second half, VCs say they expect the pace to be over 80%. That’s a lot better than in the last two recessions. After the dot-com crash of 2000, VC investments fell to 50% of normal; in the Great Recession of 2008 they fell to 70%.</p>
<p>What’s more, respondents say that half of their portfolio companies are either unaffected by the COVID-19 pandemic or are actually benefiting from it. Only 10% of portfolio companies are “severely negatively affected,” they report. Overall, VC funds anticipate only a tiny dip in their financial performance.</p>
<p>All of that, in turn, seems likely to keep the tap open on capital flow, which is great news for entrepreneurs.</p>
<h2>A Research Pivot</h2>
<p>The survey, which was conducted in June, was originally planned as a follow-up to a similar survey the coauthors did five years ago. <a href="/insights/do-funders-care-more-about-your-team-your-idea-or-your-passion">That work</a>, which revealed new insights into an industry that likes to work behind the scenes, became the most frequently cited research paper ever on venture capital over the last few years.</p>
<p>“It seemed like time for an update,” Strebulaev says. “Venture capital funds typically have a 10- to 12-year horizon, and the investment period during which funds form their portfolio is about 3 to 5 years, so we wanted to do another survey and see how the industry is doing.” Preparations for the survey were underway at the usual unhurried academic pace when the pandemic hit. “We realized we absolutely must do this <em>right now</em>.”</p>
<p>With help from alumni offices at the Stanford, Harvard, and Chicago business schools, the researchers quickly pulled together contacts and sent out a new questionnaire. The response rate was high, and the surveys came back fast — it seemed that VCs wanted as much as anyone to know what others were seeing and thinking. Instead of months, it took 10 days to complete.</p>
<p>The new survey asked many of the same questions as the first one, to see how the industry had evolved. One interesting development, Strebulaev notes, is that corporate VC divisions, which are a growing segment of the venture capital sector, have become much more like traditional stand-alone VC funds in their operations. “It shows that corporate VC has really grown up,” he says.</p>
<p>Another finding, which should put an even bigger smile on the face of entrepreneurs, is that the contractual terms of VC funding have become more founder-friendly (as opposed to investor-friendly). The researchers looked at a number of deal parameters affecting cash-flow rights, control, and liquidation rights and found this trend to be consistent across the board.</p>
<h2>What Capital Crunch?</h2>
<p>That’s surprising in the face of a recession and widespread uncertainty. If the predicted capital shortage had materialized — if investors had tightened their purse strings or shifted toward more liquid investments — you’d have expected to see VC deal terms shift in the opposite direction, Strebulaev points out.</p>
<p>“It’s a story of supply and demand, as in any market. Clearly there’s been an increase in demand for startup capital in the past five years. You see it in Silicon Valley; you see it around the world. There are so many disruptive new ideas, new companies. There are innovation hubs that didn’t exist ten, even five years ago. But the <em>supply</em> of funding has grown even more.”</p>
<p>The reason, he thinks, is that more investors are looking to profit from what they see as a time of rapid change and high growth potential. “The number of VC funds has continued to grow, and at the same time, you now have other financing options springing up. At the early stage, there are a lot of active angel investors, crowdfunding platforms, ICOs, and so on. At later stages, private equity funds, sovereign wealth funds, even mutual funds are competing with VCs to bankroll startups.”</p>
<p>The upshot, Strebulaev says, is that for entrepreneurs seeking capital, it’s still a buyer’s market, despite the pandemic.</p>
<h2>How VCs Are Spending Their Time</h2>
<p>Of course, this is not just about money. The venture capital business model is unique in that VCs remain deeply involved in managing their portfolio companies, working much closer to the ground than other investors. As a result, they really know the businesses and are able to guide founders through the white-knuckle process of building a company.</p>
<p>Strebulaev’s original survey found that VCs worldwide worked 55 hours a week on average. In the new survey, that was up to 58 hours. As before, the single largest use of their time, at one-third, is working with existing portfolio companies — 19.4 hours a week. Now, presumably, that work is done by remote conferencing rather than in-person meetings.</p>
<article>
 
 </article>
<p>Individual VCs also spend 14.4 hours a week on average sourcing new deals and 6.4 hours networking. These figures are slightly lower than in 2015, and most respondents say it’s harder to find and evaluate new investments during the lockdown. That’s not surprising, since VCs are used to meeting with investment candidates in person.</p>
<p>“It’s a face-to-face business,” Strebulaev says, “You’re evaluating not just a product and a business model but also the people, the management team and leaders. You really want to look them in the eye.”</p>
<p>Nevertheless, the survey’s respondents expect to invest at 81% of their normal pace in the second half of this year, which should alleviate fears that the hands-on style of venture capital investment is unworkable in the coronavirus era.</p>
<p>“Maybe VCs found out that while face-to-face is fantastic, their business model can survive the lockdown,” Strebulaev says. “You can’t sit down with entrepreneurs and look them in the eye, but maybe the Zoom eye is almost as good as real life.”</p>
<h2>Why It Matters</h2>
<p>That’s good news for everyone, Strebulaev says, because while venture capital is a relatively small industry, it has a huge influence on the long-term health of the economy. “VC firms are in large part responsible for the private innovation that happens in this country,” he says.</p>
<p>Of the thousands of American firms that went public over the past 40 years, 43% of them were venture-backed, Strebulaev notes, including 9 of the top 10 in terms of current market cap.</p>
<p>“VCs were the first institutional investors in Microsoft, Apple, FedEx, Google, Facebook, Uber, Intel, even Starbucks,” Strebulaev says. “Without venture capital, many of these companies would not exist. Companies that bring a truly new product to market have tremendous opportunities but also face tremendous uncertainty. You’re dealing with an unknown product in an unknown market, and startups are statistically likely to fail. No other financial intermediaries are as well positioned to invest in these conditions.”</p>
<p>Compare that to Europe or Japan, where venture capital didn’t emerge until recently, Strebulaev says. “They don’t have a Google or Apple or Intel. So I’d argue that for most of us, venture capital is very important in our everyday life — both in terms of the income and jobs created by economic growth as well as our lifestyle — and most people just don’t realize that it is in a large way due to venture capital’s contribution.”</p>
<h2>Reasons for Optimism</h2>
<p>Strebulaev says it’s reasonable to hope that the funds’ positive outlook is a bellwether for the economy as a whole. Yes, part of that confidence may reflect the fact that VCs are long-term thinkers. Even in normal times, they don’t expect their portfolio companies to be profitable at first, so a business downturn might not loom as large in their view as for the average investor.</p>
<p>But mainly, Strebulaev says, they’re optimistic because they see plenty of opportunities ahead. The current recession is fundamentally different than, say, the dot-com crash of 2000; in that case, there was a loss of confidence in the very idea of digitizing the economy. The tech sector seemed to have failed, and the term “disruption” became a punch line. That’s no longer the case.</p>
<p>If anything, the opposite is true. The pandemic has abruptly changed how we live, in ways that often require <em>more</em> tech mediation. (Who would have thought video conferencing would become a daily necessity for so many people?) That may be part of the reason why VCs report that half of their portfolio companies are either unaffected by the pandemic or have benefited from it.</p>
<p>And there’s more to come. “I’ve talked to a lot of venture capitalists here in Silicon Valley,” Strebulaev says, “and they all tell me that this may be the best time to be around — there are so many interesting investments right now. People are sitting at home coming up with new entrepreneurial ideas.”</p>
<p>That’s not to say every startup will become a unicorn. When VCs say they expect their funds’ performance to hold steady through the current crisis, those aggregate numbers conceal the fact that there are winners and losers. But it’s always been that way: Most new companies fail, and the VC business model has always relied on throwing dozens of darts in the hope of hitting one or two bull’s-eyes.</p></div>||||I||||Skip to main content
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 Finance

 VCs and COVID-19: We’re Doing Fine, Thanks

 A survey of more than 1,000 venture capitalists finds that investors predict only a tiny dip in portfolio performance — and that the cash spigot remains open.

 September 22, 2020

 | by Lee Simmons

 Image

 Despite the coronavirus pandemic, venture capitalists report that they are as busy as ever and optimistic about the future. | Reuters/Christian Hartmann

 In the early weeks of the COVID-19 pandemic, venture capital firms, like most of the U.S. economy, essentially shut down. “A lot of VCs were telling me that everything just froze,” says Ilya A. Strebulaev, professor of finance at Stanford Graduate School of Business and director of the school’s Venture Capital Initiative.

 Indeed, an April report by the National Venture Capital Association warned of a looming “capital crunch,” saying that “investment in the startup ecosystem is expected to drop significantly” as investors shy away from these “high-risk and illiquid” companies.

 “Fasten your seatbelts,” the authors wrote. “It’s going to be a bumpy ride.”

 As it turns out, the ride has been surprisingly smooth. In a newly released survey of more than 1,000 venture capitalists, representing some 900 firms, Strebulaev and his coresearchers found that VCs are as busy as ever. And they are, in fact, remarkably optimistic about the future.

 While the pace of new investments did slow to 71% of normal in the first half of 2020, that figure included the initial weeks of paralysis. For the second half, VCs say they expect the pace to be over 80%. That’s a lot better than in the last two recessions. After the dot-com crash of 2000, VC investments fell to 50% of normal; in the Great Recession of 2008 they fell to 70%.

 What’s more, respondents say that half of their portfolio companies are either unaffected by the COVID-19 pandemic or are actually benefiting from it. Only 10% of portfolio companies are “severely negatively affected,” they report. Overall, VC funds anticipate only a tiny dip in their financial performance.

 All of that, in turn, seems likely to keep the tap open on capital flow, which is great news for entrepreneurs.

 A Research Pivot

 The survey, which was conducted in June, was originally planned as a follow-up to a similar survey the coauthors did five years ago. That work, which revealed new insights into an industry that likes to work behind the scenes, became the most frequently cited research paper ever on venture capital over the last few years.

 “It seemed like time for an update,” Strebulaev says. “Venture capital funds typically have a 10- to 12-year horizon, and the investment period during which funds form their portfolio is about 3 to 5 years, so we wanted to do another survey and see how the industry is doing.” Preparations for the survey were underway at the usual unhurried academic pace when the pandemic hit. “We realized we absolutely must do this right now.”

 With help from alumni offices at the Stanford, Harvard, and Chicago business schools, the researchers quickly pulled together contacts and sent out a new questionnaire. The response rate was high, and the surveys came back fast — it seemed that VCs wanted as much as anyone to know what others were seeing and thinking. Instead of months, it took 10 days to complete.

 The new survey asked many of the same questions as the first one, to see how the industry had evolved. One interesting development, Strebulaev notes, is that corporate VC divisions, which are a growing segment of the venture capital sector, have become much more like traditional stand-alone VC funds in their operations. “It shows that corporate VC has really grown up,” he says.

 Another finding, which should put an even bigger smile on the face of entrepreneurs, is that the contractual terms of VC funding have become more founder-friendly (as opposed to investor-friendly). The researchers looked at a number of deal parameters affecting cash-flow rights, control, and liquidation rights and found this trend to be consistent across the board.

 What Capital Crunch?

 That’s surprising in the face of a recession and widespread uncertainty. If the predicted capital shortage had materialized — if investors had tightened their purse strings or shifted toward more liquid investments — you’d have expected to see VC deal terms shift in the opposite direction, Strebulaev points out.

 “It’s a story of supply and demand, as in any market. Clearly there’s been an increase in demand for startup capital in the past five years. You see it in Silicon Valley; you see it around the world. There are so many disruptive new ideas, new companies. There are innovation hubs that didn’t exist ten, even five years ago. But the supply of funding has grown even more.”

 The reason, he thinks, is that more investors are looking to profit from what they see as a time of rapid change and high growth potential. “The number of VC funds has continued to grow, and at the same time, you now have other financing options springing up. At the early stage, there are a lot of active angel investors, crowdfunding platforms, ICOs, and so on. At later stages, private equity funds, sovereign wealth funds, even mutual funds are competing with VCs to bankroll startups.”

 The upshot, Strebulaev says, is that for entrepreneurs seeking capital, it’s still a buyer’s market, despite the pandemic.

 How VCs Are Spending Their Time

 Of course, this is not just about money. The venture capital business model is unique in that VCs remain deeply involved in managing their portfolio companies, working much closer to the ground than other investors. As a result, they really know the businesses and are able to guide founders through the white-knuckle process of building a company.

 Strebulaev’s original survey found that VCs worldwide worked 55 hours a week on average. In the new survey, that was up to 58 hours. As before, the single largest use of their time, at one-third, is working with existing portfolio companies — 19.4 hours a week. Now, presumably, that work is done by remote conferencing rather than in-person meetings.

 Quote
 I’ve talked to a lot of venture capitalists, and they all tell me that this may be the best time to be around — there are so many interesting investments right now.
 Attribution
 Ilya Strebulaev

 Individual VCs also spend 14.4 hours a week on average sourcing new deals and 6.4 hours networking. These figures are slightly lower than in 2015, and most respondents say it’s harder to find and evaluate new investments during the lockdown. That’s not surprising, since VCs are used to meeting with investment candidates in person.

 “It’s a face-to-face business,” Strebulaev says, “You’re evaluating not just a product and a business model but also the people, the management team and leaders. You really want to look them in the eye.”

 Nevertheless, the survey’s respondents expect to invest at 81% of their normal pace in the second half of this year, which should alleviate fears that the hands-on style of venture capital investment is unworkable in the coronavirus era.

 “Maybe VCs found out that while face-to-face is fantastic, their business model can survive the lockdown,” Strebulaev says. “You can’t sit down with entrepreneurs and look them in the eye, but maybe the Zoom eye is almost as good as real life.”

 Why It Matters

 That’s good news for everyone, Strebulaev says, because while venture capital is a relatively small industry, it has a huge influence on the long-term health of the economy. “VC firms are in large part responsible for the private innovation that happens in this country,” he says.

 Of the thousands of American firms that went public over the past 40 years, 43% of them were venture-backed, Strebulaev notes, including 9 of the top 10 in terms of current market cap.

 “VCs were the first institutional investors in Microsoft, Apple, FedEx, Google, Facebook, Uber, Intel, even Starbucks,” Strebulaev says. “Without venture capital, many of these companies would not exist. Companies that bring a truly new product to market have tremendous opportunities but also face tremendous uncertainty. You’re dealing with an unknown product in an unknown market, and startups are statistically likely to fail. No other financial intermediaries are as well positioned to invest in these conditions.”

 Compare that to Europe or Japan, where venture capital didn’t emerge until recently, Strebulaev says. “They don’t have a Google or Apple or Intel. So I’d argue that for most of us, venture capital is very important in our everyday life — both in terms of the income and jobs created by economic growth as well as our lifestyle — and most people just don’t realize that it is in a large way due to venture capital’s contribution.”

 Reasons for Optimism

 Strebulaev says it’s reasonable to hope that the funds’ positive outlook is a bellwether for the economy as a whole. Yes, part of that confidence may reflect the fact that VCs are long-term thinkers. Even in normal times, they don’t expect their portfolio companies to be profitable at first, so a business downturn might not loom as large in their view as for the average investor.

 But mainly, Strebulaev says, they’re optimistic because they see plenty of opportunities ahead. The current recession is fundamentally different than, say, the dot-com crash of 2000; in that case, there was a loss of confidence in the very idea of digitizing the economy. The tech sector seemed to have failed, and the term “disruption” became a punch line. That’s no longer the case.

 If anything, the opposite is true. The pandemic has abruptly changed how we live, in ways that often require more tech mediation. (Who would have thought video conferencing would become a daily necessity for so many people?) That may be part of the reason why VCs report that half of their portfolio companies are either unaffected by the pandemic or have benefited from it.

 And there’s more to come. “I’ve talked to a lot of venture capitalists here in Silicon Valley,” Strebulaev says, “and they all tell me that this may be the best time to be around — there are so many interesting investments right now. People are sitting at home coming up with new entrepreneurial ideas.”

 That’s not to say every startup will become a unicorn. When VCs say they expect their funds’ performance to hold steady through the current crisis, those aggregate numbers conceal the fact that there are winners and losers. But it’s always been that way: Most new companies fail, and the VC business model has always relied on throwing dozens of darts in the hope of hitting one or two bull’s-eyes.

 Finance , Entrepreneurship , Innovation
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 June 20, 2018
 Inside the Secret World of Venture Capital
 The Stanford Venture Capital Initiative is quietly assembling a massive database from people who prefer to stay mum.
 Venture Capital Initiative
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A survey of more than 1,000 venture capitalists finds that investors predict only a tiny dip in portfolio performance — and that the cash spigot remains open.   
 
 
 
 Despite the coronavirus pandemic, venture capitalists report that they are as busy as ever and optimistic about the future. | Reuters/Christian Hartmann
 
 
In the early weeks of the COVID-19 pandemic, venture capital firms, like most of the U.S. economy, essentially shut down. “A lot of VCs were telling me that everything just froze,” says Ilya A. Strebulaev, professor of finance at Stanford Graduate School of Business and director of the school’s Venture Capital Initiative.
Indeed, an April report by the National Venture Capital Association warned of a looming “capital crunch,” saying that “investment in the startup ecosystem is expected to drop significantly” as investors shy away from these “high-risk and illiquid” companies.
“Fasten your seatbelts,” the authors wrote. “It’s going to be a bumpy ride.”
As it turns out, the ride has been surprisingly smooth. In a newly released survey of more than 1,000 venture capitalists, representing some 900 firms, Strebulaev and his coresearchers found that VCs are as busy as ever. And they are, in fact, remarkably optimistic about the future.
While the pace of new investments did slow to 71% of normal in the first half of 2020, that figure included the initial weeks of paralysis. For the second half, VCs say they expect the pace to be over 80%. That’s a lot better than in the last two recessions. After the dot-com crash of 2000, VC investments fell to 50% of normal; in the Great Recession of 2008 they fell to 70%.
What’s more, respondents say that half of their portfolio companies are either unaffected by the COVID-19 pandemic or are actually benefiting from it. Only 10% of portfolio companies are “severely negatively affected,” they report. Overall, VC funds anticipate only a tiny dip in their financial performance.
All of that, in turn, seems likely to keep the tap open on capital flow, which is great news for entrepreneurs.
A Research Pivot
The survey, which was conducted in June, was originally planned as a follow-up to a similar survey the coauthors did five years ago. That work, which revealed new insights into an industry that likes to work behind the scenes, became the most frequently cited research paper ever on venture capital over the last few years.
“It seemed like time for an update,” Strebulaev says. “Venture capital funds typically have a 10- to 12-year horizon, and the investment period during which funds form their portfolio is about 3 to 5 years, so we wanted to do another survey and see how the industry is doing.” Preparations for the survey were underway at the usual unhurried academic pace when the pandemic hit. “We realized we absolutely must do this right now.”
With help from alumni offices at the Stanford, Harvard, and Chicago business schools, the researchers quickly pulled together contacts and sent out a new questionnaire. The response rate was high, and the surveys came back fast — it seemed that VCs wanted as much as anyone to know what others were seeing and thinking. Instead of months, it took 10 days to complete.
The new survey asked many of the same questions as the first one, to see how the industry had evolved. One interesting development, Strebulaev notes, is that corporate VC divisions, which are a growing segment of the venture capital sector, have become much more like traditional stand-alone VC funds in their operations. “It shows that corporate VC has really grown up,” he says.
Another finding, which should put an even bigger smile on the face of entrepreneurs, is that the contractual terms of VC funding have become more founder-friendly (as opposed to investor-friendly). The researchers looked at a number of deal parameters affecting cash-flow rights, control, and liquidation rights and found this trend to be consistent across the board.
What Capital Crunch?
That’s surprising in the face of a recession and widespread uncertainty. If the predicted capital shortage had materialized — if investors had tightened their purse strings or shifted toward more liquid investments — you’d have expected to see VC deal terms shift in the opposite direction, Strebulaev points out.
“It’s a story of supply and demand, as in any market. Clearly there’s been an increase in demand for startup capital in the past five years. You see it in Silicon Valley; you see it around the world. There are so many disruptive new ideas, new companies. There are innovation hubs that didn’t exist ten, even five years ago. But the supply of funding has grown even more.”
The reason, he thinks, is that more investors are looking to profit from what they see as a time of rapid change and high growth potential. “The number of VC funds has continued to grow, and at the same time, you now have other financing options springing up. At the early stage, there are a lot of active angel investors, crowdfunding platforms, ICOs, and so on. At later stages, private equity funds, sovereign wealth funds, even mutual funds are competing with VCs to bankroll startups.”
The upshot, Strebulaev says, is that for entrepreneurs seeking capital, it’s still a buyer’s market, despite the pandemic.
How VCs Are Spending Their Time
Of course, this is not just about money. The venture capital business model is unique in that VCs remain deeply involved in managing their portfolio companies, working much closer to the ground than other investors. As a result, they really know the businesses and are able to guide founders through the white-knuckle process of building a company.
Strebulaev’s original survey found that VCs worldwide worked 55 hours a week on average. In the new survey, that was up to 58 hours. As before, the single largest use of their time, at one-third, is working with existing portfolio companies — 19.4 hours a week. Now, presumably, that work is done by remote conferencing rather than in-person meetings.
 
 
Individual VCs also spend 14.4 hours a week on average sourcing new deals and 6.4 hours networking. These figures are slightly lower than in 2015, and most respondents say it’s harder to find and evaluate new investments during the lockdown. That’s not surprising, since VCs are used to meeting with investment candidates in person.
“It’s a face-to-face business,” Strebulaev says, “You’re evaluating not just a product and a business model but also the people, the management team and leaders. You really want to look them in the eye.”
Nevertheless, the survey’s respondents expect to invest at 81% of their normal pace in the second half of this year, which should alleviate fears that the hands-on style of venture capital investment is unworkable in the coronavirus era.
“Maybe VCs found out that while face-to-face is fantastic, their business model can survive the lockdown,” Strebulaev says. “You can’t sit down with entrepreneurs and look them in the eye, but maybe the Zoom eye is almost as good as real life.”
Why It Matters
That’s good news for everyone, Strebulaev says, because while venture capital is a relatively small industry, it has a huge influence on the long-term health of the economy. “VC firms are in large part responsible for the private innovation that happens in this country,” he says.
Of the thousands of American firms that went public over the past 40 years, 43% of them were venture-backed, Strebulaev notes, including 9 of the top 10 in terms of current market cap.
“VCs were the first institutional investors in Microsoft, Apple, FedEx, Google, Facebook, Uber, Intel, even Starbucks,” Strebulaev says. “Without venture capital, many of these companies would not exist. Companies that bring a truly new product to market have tremendous opportunities but also face tremendous uncertainty. You’re dealing with an unknown product in an unknown market, and startups are statistically likely to fail. No other financial intermediaries are as well positioned to invest in these conditions.”
Compare that to Europe or Japan, where venture capital didn’t emerge until recently, Strebulaev says. “They don’t have a Google or Apple or Intel. So I’d argue that for most of us, venture capital is very important in our everyday life — both in terms of the income and jobs created by economic growth as well as our lifestyle — and most people just don’t realize that it is in a large way due to venture capital’s contribution.”
Reasons for Optimism
Strebulaev says it’s reasonable to hope that the funds’ positive outlook is a bellwether for the economy as a whole. Yes, part of that confidence may reflect the fact that VCs are long-term thinkers. Even in normal times, they don’t expect their portfolio companies to be profitable at first, so a business downturn might not loom as large in their view as for the average investor.
But mainly, Strebulaev says, they’re optimistic because they see plenty of opportunities ahead. The current recession is fundamentally different than, say, the dot-com crash of 2000; in that case, there was a loss of confidence in the very idea of digitizing the economy. The tech sector seemed to have failed, and the term “disruption” became a punch line. That’s no longer the case.
If anything, the opposite is true. The pandemic has abruptly changed how we live, in ways that often require more tech mediation. (Who would have thought video conferencing would become a daily necessity for so many people?) That may be part of the reason why VCs report that half of their portfolio companies are either unaffected by the pandemic or have benefited from it.
And there’s more to come. “I’ve talked to a lot of venture capitalists here in Silicon Valley,” Strebulaev says, “and they all tell me that this may be the best time to be around — there are so many interesting investments right now. People are sitting at home coming up with new entrepreneurial ideas.”
That’s not to say every startup will become a unicorn. When VCs say they expect their funds’ performance to hold steady through the current crisis, those aggregate numbers conceal the fact that there are winners and losers. But it’s always been that way: Most new companies fail, and the VC business model has always relied on throwing dozens of darts in the hope of hitting one or two bull’s-eyes.
VCs and COVID-19: We’re Doing Fine, Thanks
https://www.gsb.stanford.edu/insights/vcs-covid-19-were-doing-fine-thanks
https://www.chicagobooth.edu/review/covid-19-has-left-venture-capitalists-down-not-out
COVID-19 Has Left Venture Capitalists Down but Not Out
2021-04-29
Michael Rapoport
<div><div>
<div>
<p>Venture capital investors are used to dealing with plenty of risk and uncertainty—so how have they fared amid the risks and uncertainties caused by the COVID-19 pandemic?</p>
<p>Not that badly, actually.</p>
<p>That’s what Harvard’s <a href="https://www.chicagobooth.edu/review/authors-experts/g/paul-gompers">Paul Gompers</a>, University of British Columbia’s <a href="https://www.chicagobooth.edu/review/authors-experts/g/will-gornall">Will Gornall</a>, Chicago Booth’s <a href="https://www.chicagobooth.edu/review/authors-experts/k/steve-kaplan">Steve Kaplan</a>, and Stanford’s <a href="https://www.chicagobooth.edu/review/authors-experts/s/ilya-a-strebulaev">Ilya A. Strebulaev</a> find in a survey of more than 1,000 venture capitalists.</p>
<p>COVID-19 hit VCs along with the rest of the business world, as pandemic lockdowns crippled many companies and even entire industries. VCs slowed their investment pace by nearly 30 percent in the pandemic’s early months, and some of their portfolio companies were slammed, the researchers find. </p>
<p>But it could have been far worse. VCs themselves issued dire predictions when pandemic-related closures took effect in the United States in March 2020. Sequoia Capital warned investors that “coronavirus is the black swan of 2020,” and Angular Ventures declared that “the global VC market has completely locked up.” Considering the role of the $130 billion-a-year VC industry in powering innovation and high-growth companies, the researchers’ findings are good news for an economy battered by COVID-19.</p>
<p>The team conducted their survey in June and July 2020. The bulk of the VCs in the sample worked as private fund managers with early-stage startup companies. The researchers were able to compare responses with findings from a similar survey they conducted in 2016.</p>
<p>VCs’ investment pace slowed to 71 percent of normal expected activity in the first half of 2020, the research demonstrates. Respondents said they expected to invest at only 81 percent of their normal pace in the coming year. Two-thirds of the VCs were making fewer investments, according to the survey. This may be because the pandemic made it more difficult for them to travel and have the kind of in-person meetings they’d usually hold before investing in a company. </p>
<p>The industry itself seems to have fared better during the pandemic than during the aftermath of the 2008–09 financial crisis or the 2001–02 bursting of the dot-com bubble, according to the researchers. While the pandemic and its accompanying uncertainties are far from over, the researchers say that the responses suggest the VC industry has been “more resilient than many other sectors of the global economy.”</p>
<p>Why? The researchers speculate that VC-backed companies may have been spared the worst of the effects of lockdowns because they were able to switch to remote work more easily and because they tend to have ample cash and not much debt. The economy’s volatility amid the pandemic may also have helped some VC companies, the researchers suggest. To the extent that VC-backed businesses tend to focus on innovative technologies and business models, some may actually benefit in a volatile environment.</p>
</div>
<div>
<p>
<h2>Recommended Reading</h2>
</p>
</div>
<div>
<p>The VCs surveyed also said 10 percent of their portfolio companies were “severely” hurt by the pandemic, with an additional 38 percent injured but not in “critical condition.” Those numbers are “substantially more positive than we had expected,” the researchers write.</p>
<p>VCs expect the pandemic to have only a small negative effect on their profits, reducing internal rates of return by 1.6 percent, the researchers report. But they caution that the aggregate numbers may hide the fact that there have been some big winners and some big losers that have averaged out.</p>
<p>Industry participants are optimistic about their future performance, the researchers say: 91 percent of institutional VCs said they expected to outperform the stock market, and almost 75 percent predicted that the industry as a whole would do so. To the extent that COVID-19 has crimped their investment pace, VCs expect the impact to be “relatively short-lived.”</p>
<p>Two quarters after the survey, it looks like the VCs were right. With the revival of the stock market—particularly for tech companies—not to mention the stunning resurgence of the IPO market, VC returns are likely to have surged in the pandemic.</p>
</div>
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<p>
<h2>More from Chicago Booth Review<br/></h2>
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 COVID-19 Has Left Venture Capitalists Down but Not Out
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 COVID-19 Has Left Venture Capitalists Down but Not Out

 * By Michael Rapoport
 * April 29, 2021
 * CBR - Finance

 Venture capital investors are used to dealing with plenty of risk and uncertainty—so how have they fared amid the risks and uncertainties caused by the COVID-19 pandemic?

 Not that badly, actually.

 That’s what Harvard’s Paul Gompers, University of British Columbia’s Will Gornall, Chicago Booth’s Steve Kaplan, and Stanford’s Ilya A. Strebulaev find in a survey of more than 1,000 venture capitalists.

 COVID-19 hit VCs along with the rest of the business world, as pandemic lockdowns crippled many companies and even entire industries. VCs slowed their investment pace by nearly 30 percent in the pandemic’s early months, and some of their portfolio companies were slammed, the researchers find.

 But it could have been far worse. VCs themselves issued dire predictions when pandemic-related closures took effect in the United States in March 2020. Sequoia Capital warned investors that “coronavirus is the black swan of 2020,” and Angular Ventures declared that “the global VC market has completely locked up.” Considering the role of the $130 billion-a-year VC industry in powering innovation and high-growth companies, the researchers’ findings are good news for an economy battered by COVID-19.

 The team conducted their survey in June and July 2020. The bulk of the VCs in the sample worked as private fund managers with early-stage startup companies. The researchers were able to compare responses with findings from a similar survey they conducted in 2016.

 VCs’ investment pace slowed to 71 percent of normal expected activity in the first half of 2020, the research demonstrates. Respondents said they expected to invest at only 81 percent of their normal pace in the coming year. Two-thirds of the VCs were making fewer investments, according to the survey. This may be because the pandemic made it more difficult for them to travel and have the kind of in-person meetings they’d usually hold before investing in a company.

 The industry itself seems to have fared better during the pandemic than during the aftermath of the 2008–09 financial crisis or the 2001–02 bursting of the dot-com bubble, according to the researchers. While the pandemic and its accompanying uncertainties are far from over, the researchers say that the responses suggest the VC industry has been “more resilient than many other sectors of the global economy.”

 Why? The researchers speculate that VC-backed companies may have been spared the worst of the effects of lockdowns because they were able to switch to remote work more easily and because they tend to have ample cash and not much debt. The economy’s volatility amid the pandemic may also have helped some VC companies, the researchers suggest. To the extent that VC-backed businesses tend to focus on innovative technologies and business models, some may actually benefit in a volatile environment.

 Recommended Reading

 What Are Venture Capitalists Looking for in Start-Ups?

 Venture capitalists doling out millions to back big ideas may be less interested in the product than in the people developing the product, research suggests.

 What Are Venture Capitalists Looking for in Start-Ups?
 * CBR - Finance

 Entrepreneurs, Remember the Power of a Smile

 What investors really look for in startup pitches.

 Entrepreneurs, Remember the Power of a Smile
 * CBR - Entrepreneurship

 The VCs surveyed also said 10 percent of their portfolio companies were “severely” hurt by the pandemic, with an additional 38 percent injured but not in “critical condition.” Those numbers are “substantially more positive than we had expected,” the researchers write.

 VCs expect the pandemic to have only a small negative effect on their profits, reducing internal rates of return by 1.6 percent, the researchers report. But they caution that the aggregate numbers may hide the fact that there have been some big winners and some big losers that have averaged out.

 Industry participants are optimistic about their future performance, the researchers say: 91 percent of institutional VCs said they expected to outperform the stock market, and almost 75 percent predicted that the industry as a whole would do so. To the extent that COVID-19 has crimped their investment pace, VCs expect the impact to be “relatively short-lived.”

 Two quarters after the survey, it looks like the VCs were right. With the revival of the stock market—particularly for tech companies—not to mention the stunning resurgence of the IPO market, VC returns are likely to have surged in the pandemic.

 Works Cited

 Paul Gompers, Will Gornall, Steve Kaplan, and Ilya A. Strebulaev, “Venture Capitalists and COVID-19,” Working paper, October 2020.

 More from Chicago Booth Review

 Is A.I. Startup Funding a Rerun of the Dot-Com Bubble?

 An expert panel discusses how A.I. is reshaping entrepreneurship, and how founders and investors are responding.

 Is A.I. Startup Funding a Rerun of the Dot-Com Bubble?
 * CBR - The Big Question

 How Fixing Troubled Banks Can Help Minorities and Women

 Regulatory action unrelated to fair lending can nonetheless increase access to credit for historically disadvantaged categories of borrowers.

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Venture capital investors are used to dealing with plenty of risk and uncertainty—so how have they fared amid the risks and uncertainties caused by the COVID-19 pandemic?
Not that badly, actually.
That’s what Harvard’s Paul Gompers, University of British Columbia’s Will Gornall, Chicago Booth’s Steve Kaplan, and Stanford’s Ilya A. Strebulaev find in a survey of more than 1,000 venture capitalists.
COVID-19 hit VCs along with the rest of the business world, as pandemic lockdowns crippled many companies and even entire industries. VCs slowed their investment pace by nearly 30 percent in the pandemic’s early months, and some of their portfolio companies were slammed, the researchers find. 
But it could have been far worse. VCs themselves issued dire predictions when pandemic-related closures took effect in the United States in March 2020. Sequoia Capital warned investors that “coronavirus is the black swan of 2020,” and Angular Ventures declared that “the global VC market has completely locked up.” Considering the role of the $130 billion-a-year VC industry in powering innovation and high-growth companies, the researchers’ findings are good news for an economy battered by COVID-19.
The team conducted their survey in June and July 2020. The bulk of the VCs in the sample worked as private fund managers with early-stage startup companies. The researchers were able to compare responses with findings from a similar survey they conducted in 2016.
VCs’ investment pace slowed to 71 percent of normal expected activity in the first half of 2020, the research demonstrates. Respondents said they expected to invest at only 81 percent of their normal pace in the coming year. Two-thirds of the VCs were making fewer investments, according to the survey. This may be because the pandemic made it more difficult for them to travel and have the kind of in-person meetings they’d usually hold before investing in a company. 
The industry itself seems to have fared better during the pandemic than during the aftermath of the 2008–09 financial crisis or the 2001–02 bursting of the dot-com bubble, according to the researchers. While the pandemic and its accompanying uncertainties are far from over, the researchers say that the responses suggest the VC industry has been “more resilient than many other sectors of the global economy.”
Why? The researchers speculate that VC-backed companies may have been spared the worst of the effects of lockdowns because they were able to switch to remote work more easily and because they tend to have ample cash and not much debt. The economy’s volatility amid the pandemic may also have helped some VC companies, the researchers suggest. To the extent that VC-backed businesses tend to focus on innovative technologies and business models, some may actually benefit in a volatile environment.
Recommended Reading
The VCs surveyed also said 10 percent of their portfolio companies were “severely” hurt by the pandemic, with an additional 38 percent injured but not in “critical condition.” Those numbers are “substantially more positive than we had expected,” the researchers write.
VCs expect the pandemic to have only a small negative effect on their profits, reducing internal rates of return by 1.6 percent, the researchers report. But they caution that the aggregate numbers may hide the fact that there have been some big winners and some big losers that have averaged out.
Industry participants are optimistic about their future performance, the researchers say: 91 percent of institutional VCs said they expected to outperform the stock market, and almost 75 percent predicted that the industry as a whole would do so. To the extent that COVID-19 has crimped their investment pace, VCs expect the impact to be “relatively short-lived.”
Two quarters after the survey, it looks like the VCs were right. With the revival of the stock market—particularly for tech companies—not to mention the stunning resurgence of the IPO market, VC returns are likely to have surged in the pandemic.
More from Chicago Booth Review 
More from Chicago Booth 
 Your Privacy 
We want to demonstrate our commitment to your privacy. Please review Chicago Booth's privacy notice, which provides information explaining how and why we collect particular information when you visit our website.
COVID-19 Has Left Venture Capitalists Down but Not Out
https://www.chicagobooth.edu/review/covid-19-has-left-venture-capitalists-down-not-out
https://en.wikipedia.org/wiki/Andreessen_Horowitz
Andreessen Horowitz - Wikipedia
2010-11-03
None
<div><div>
	<p>From Wikipedia, the free encyclopedia</p>
	</div><div>
<table><caption>AH Capital Management, LLC</caption><tbody><tr><td><a href="/wiki/File:Andreessen_Horowitz_new_logo.svg"></a></td></tr><tr><th>Type</th><td><a href="/wiki/Privately_held_company">Private</a></td></tr><tr><th>Industry</th><td><a href="/wiki/Venture_capital">Venture capital</a></td></tr><tr><th>Founded</th><td>July 6, 2009; 13 years ago</td></tr><tr><th>Founders</th><td><a href="/wiki/Marc_Andreessen">Marc Andreessen</a><br /><a href="/wiki/Ben_Horowitz">Ben Horowitz</a></td></tr><tr><th>Headquarters</th><td><div><p><a href="/wiki/Menlo_Park,_California">Menlo Park</a>, <a href="/wiki/California">California</a></p></div>, <div><p><a href="/wiki/United_States">U.S.</a></p></div></td></tr><tr><th><a href="/wiki/Assets_under_management">AUM</a></th><td>$28.2 billion<br />(as of April 5, 2022)</td></tr><tr><th>Website</th><td><a href="http://www.a16z.com/">www<wbr></wbr>.a16z<wbr></wbr>.com</a></td></tr></tbody></table>
<p><b>Andreessen Horowitz</b> (also called <b>a16z</b>, legal name <b>AH Capital Management, LLC</b>) is a private American <a href="/wiki/Venture_capital">venture capital</a> firm, founded in 2009 by <a href="/wiki/Marc_Andreessen">Marc Andreessen</a> and <a href="/wiki/Ben_Horowitz">Ben Horowitz</a>. The company is headquartered in <a href="/wiki/Menlo_Park,_California">Menlo Park, California</a>.
</p><p>Andreessen Horowitz invests in both early-stage <a href="/wiki/Start-up">start-ups</a> and established <a href="/wiki/Growth_stock">growth companies</a>.<sup><a href="#cite_note-TechCrunch_News2-1">[1]</a></sup> Its investments span the mobile, cryptocurrency, gaming, social, <a href="/wiki/E-commerce">e-commerce</a>, education and enterprise IT (including <a href="/wiki/Cloud_computing">cloud computing</a>, security, and <a href="/wiki/Software_as_a_service">software as a service</a>) industries.<sup><a href="#cite_note-ben-2">[2]</a></sup>
</p>
<h2>Founding and partnering[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=1">edit</a>]</h2>
<div><div><div><p><a href="/wiki/File:Marc_Andreessen_(1).jpg"></a></p></div><div><p><a href="/wiki/File:Ben_Horowitz_at_TechCrunch_Disrupt.jpg"></a></p></div></div><div><p>Marc Andreessen (<i>left</i>) and Ben Horowitz (<i>right</i>) are the company's founders.</p></div></div>
<p>Between 2006 and 2010, Marc Andreessen and Ben Horowitz actively invested in <a href="/wiki/Technology_company">technology companies</a>. Separately, and together, they invested $4 million in 45 start-ups including <a href="/wiki/Twitter">Twitter</a>.<sup><a href="#cite_note-UCLA-3">[3]</a></sup> During this time, the two became known as "<a href="/wiki/Super_angel">super angel</a>" investors.<sup><a href="#cite_note-UCLA-3">[3]</a></sup>
</p><p>On July 6, 2009, Andreessen and Horowitz launched their venture capital fund with an initial capitalization of $300 million.<sup><a href="#cite_note-CNN-4">[4]</a></sup> In November 2010, at a time when the field of <a href="/wiki/Venture_capital">venture capitalism</a> was contracting, the company raised another $650 million for a second venture fund.<sup><a href="#cite_note-CNN-4">[4]</a></sup><sup><a href="#cite_note-NYTimes-5">[5]</a></sup> In less than two years, the firm was managing a total of $1.2 billion under the two funds.<sup><a href="#cite_note-ben-2">[2]</a></sup>
</p><p>In May 2011, Andreessen ranked number 10 on the 2011 <a href="/wiki/Forbes">Forbes</a> <a href="/wiki/Midas_List">Midas List</a> of Tech's Top Investors<sup><a href="#cite_note-Forbes-6">[6]</a></sup> while he and Horowitz ranked number 6 on <a href="/wiki/Vanity_Fair_(magazine)">Vanity Fair</a>'s 2011 New Establishment List<sup><a href="#cite_note-Vanity_Fair-7">[7]</a></sup> and number 1 on <a href="/wiki/CNET">CNET</a>'s 2011 most influential investors list.<sup><a href="#cite_note-CNET-8">[8]</a></sup>
</p><p>As of March 27, 2014, the firm managed $4 billion in assets after the closing of its fourth fund at $1.5 billion.<sup><a href="#cite_note-TechCrunch_Venture-9">[9]</a></sup>
</p><p>In addition to Andreessen and Horowitz, the firm's general partners include <a href="/wiki/John_O%27Farrell_(venture_capitalist)">John O'Farrell</a>, <a href="/wiki/Scott_Weiss">Scott Weiss</a>, <a href="/wiki/Jeff_Jordan_(venture_capitalist)">Jeff Jordan</a>, <a href="/wiki/Peter_Levine_(venture_capitalist)">Peter Levine</a>, <a href="/wiki/Chris_Dixon">Chris Dixon</a>, <a href="/wiki/Vijay_S._Pande">Vijay Pande</a>, Katie Haun,<sup><a href="#cite_note-10">[10]</a></sup> Alex Rampell, <a href="/wiki/Martin_Casado">Martin Casado</a>, Connie Chan, Andrew Chen, and <a href="/wiki/Sriram_Krishnan">Sriram Krishnan</a>.<sup><a href="#cite_note-11">[11]</a></sup><sup><a href="#cite_note-12">[12]</a></sup><sup><a href="#cite_note-13">[13]</a></sup><sup><a href="#cite_note-14">[14]</a></sup> In March 2019, it was reported that Andreessen Horowitz was opening an office in San Francisco.<sup><a href="#cite_note-FootnoteA-15">[15]</a></sup>
</p><p>In January 2022, Andreessen Horowitz raised $9 billion for its <a href="/wiki/Venture_capital">venture capital</a>, growth-stage and biotech-focused vehicles.<sup><a href="#cite_note-16">[16]</a></sup><sup><a href="#cite_note-17">[17]</a></sup>
</p><p>As of April 2022, the firm manages $28.2 billion in assets.<sup><a href="#cite_note-18">[18]</a></sup><sup><a href="#cite_note-19">[19]</a></sup>
</p>
<h2>Notable investments[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=2">edit</a>]</h2>
<h3>2009[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=3">edit</a>]</h3>
<p>In 2009, Andreessen Horowitz made its two first investments: one in business management SaaS developer <a href="/wiki/Apptio">Apptio</a><sup><a href="#cite_note-VB_Aug_2009-20">[20]</a></sup> and the other in <a href="/wiki/Skype">Skype</a> stock.<sup><a href="#cite_note-WSJ-21">[21]</a></sup> According to Horowitz, the investment was seen as risky by other experts in the field who believed the company would be crippled by ongoing intellectual property litigation and direct competitive attacks from <a href="/wiki/Google">Google</a> and <a href="/wiki/Apple_Inc.">Apple</a>.<sup><a href="#cite_note-WSJ-21">[21]</a></sup> The company's founders viewed the investment as a success following Skype's sale to <a href="/wiki/Microsoft">Microsoft</a> in May 2011 for $8.5 billion.<sup><a href="#cite_note-WSJ-21">[21]</a></sup>
</p>
<h3>2010–2011[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=4">edit</a>]</h3>
<p>In 2010, Andreessen Horowitz invested $10 million in cloud company <a href="/wiki/Okta_(identity_management)">Okta</a> while leading its Series A Round.<sup><a href="#cite_note-22">[22]</a></sup>
</p><p>In 2011, Andreessen Horowitz invested $80 million in Twitter,<sup><a href="#cite_note-CNN-4">[4]</a></sup> becoming the first venture firm that held stock in all four of the highest-valued, privately held social media companies at the time: <a href="/wiki/Facebook">Facebook</a>, <a href="/wiki/Groupon">Groupon</a>, <a href="/wiki/Twitter">Twitter</a>, and <a href="/wiki/Zynga">Zynga</a>.<sup><a href="#cite_note-ben-2">[2]</a></sup> Andreessen Horowitz has also invested in <a href="/wiki/Airbnb">Airbnb</a>, <a href="/wiki/Lytro">Lytro</a>, <a href="/w/index.php?title=Jawbone_(headset)&amp;action=edit&amp;redlink=1">Jawbone</a>, <a href="/wiki/Belly_(loyalty_program)">Belly</a>, <a href="/wiki/Foursquare_City_Guide">Foursquare</a>, <a href="/wiki/Stripe_(company)">Stripe</a> and other high-tech companies.<sup><a href="#cite_note-CNN-4">[4]</a></sup><sup><a href="#cite_note-TechCrunch_News-23">[23]</a></sup><sup><a href="#cite_note-24">[24]</a></sup>
</p>
<h3>2012–2013[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=5">edit</a>]</h3>
<p>In 2012, Andreessen Horowitz invested in 156 companies, including the 90 companies in its portfolio,<sup><a href="#cite_note-Time-25">[25]</a></sup> and 66 start-ups<sup><a href="#cite_note-VentureBeat_News-26">[26]</a></sup> through its funding of <a href="/wiki/Y_Combinator_(company)">Y Combinator</a>'s Start Fund.<sup><a href="#cite_note-VentureBeat_Deals-27">[27]</a></sup> The company invested $100 million in <a href="/wiki/GitHub">GitHub</a>, which netted over $1 billion for the fund when GitHub was acquired by Microsoft for $7.5 billion.<sup><a href="#cite_note-28">[28]</a></sup><sup><a href="#cite_note-29">[29]</a></sup> In 2013, Andreessen Horowitz invested in <a href="/wiki/Clinkle">Clinkle</a>, <a href="/wiki/Coinbase">Coinbase</a>, <a href="/wiki/Databricks">Databricks</a>, <a href="/wiki/Lyft">Lyft</a>, <a href="/wiki/Oculus_VR">Oculus VR</a>, <a href="/wiki/PagerDuty">PagerDuty</a>, Pixlee, <a href="/wiki/Ripple_(payment_protocol)">Ripple</a>, <a href="/wiki/Soylent_(food_substitute)">Soylent</a>, <a href="/wiki/Swiftype">Swiftype</a> and <a href="/wiki/UBiome">uBiome</a>.<sup><a href="#cite_note-30">[30]</a></sup><sup><a href="#cite_note-31">[31]</a></sup><sup><a href="#cite_note-32">[32]</a></sup><sup><a href="#cite_note-33">[33]</a></sup><sup><a href="#cite_note-34">[34]</a></sup><sup><a href="#cite_note-35">[35]</a></sup><sup><a href="#cite_note-36">[36]</a></sup>
</p>
<h3>2014–2015[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=6">edit</a>]</h3>
<p>In 2014, the firm led a $57 million Series B round in the A/B testing startup <a href="/wiki/Optimizely">Optimizely</a>.<sup><a href="#cite_note-37">[37]</a></sup> That same year the company invested in several more companies, including <a href="/wiki/Tanium">Tanium</a> for $90 million,<sup><a href="#cite_note-38">[38]</a></sup> <a href="/wiki/BuzzFeed">BuzzFeed</a>,<sup><a href="#cite_note-39">[39]</a></sup> and Forward Networks.<sup><a href="#cite_note-Forward_Networks-40">[40]</a></sup> In 2015, the firm invested $40 million in <a href="/wiki/Stack_Exchange">Stack Exchange</a>,<sup><a href="#cite_note-41">[41]</a></sup><sup><a href="#cite_note-42">[42]</a></sup> $2.8 million in Distelli,<sup><a href="#cite_note-43">[43]</a></sup> and $80 million in cloud-based CAD software company <a href="/wiki/Onshape">Onshape</a>.<sup><a href="#cite_note-44">[44]</a></sup> Also in 2015 Andreessen Horowitz invested in the blogging platform <a href="/wiki/Medium_(website)">Medium</a>,<sup><a href="#cite_note-45">[45]</a></sup> <a href="/wiki/Samsara_(company)">Samsara</a>,<sup><a href="#cite_note-46">[46]</a></sup> Improbable,<sup><a href="#cite_note-47">[47]</a></sup> Honor, Inc.,<sup><a href="#cite_note-48">[48]</a></sup> <a href="/wiki/OpenBazaar">OpenBazaar</a>,<sup><a href="#cite_note-49">[49]</a></sup><sup><a href="#cite_note-50">[50]</a></sup> a <a href="/wiki/Blockchain_company">blockchain</a> startup, and <a href="/wiki/Nootropics">nootropics</a> and biohacking company <a href="/wiki/Nootrobox">Nootrobox</a>.<sup><a href="#cite_note-51">[51]</a></sup>
</p>
<h3>2016–2019[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=7">edit</a>]</h3>
<p>In 2016, the firm led an $8.1 million Series A round in Everlaw, a legal technology company, and led a $3.5 million Series Seed round in RapidAPI, an API connection platform for developers.<sup><a href="#cite_note-52">[52]</a></sup><sup><a href="#cite_note-TechCrunch1-53">[53]</a></sup> Also in 2016, the firm invested $2 million in Cardiogram, a digital health company,<sup><a href="#cite_note-54">[54]</a></sup> and <a href="/wiki/Apeel_Sciences">Apeel Sciences</a>, a food science business.<sup><a href="#cite_note-55">[55]</a></sup>
</p><p>In 2017, the firm invested in Sigma, Health IQ, Asimov, and <a href="/wiki/Cadre_(company)">Cadre</a>.<sup><a href="#cite_note-56">[56]</a></sup><sup><a href="#cite_note-57">[57]</a></sup><sup><a href="#cite_note-58">[58]</a></sup><sup><a href="#cite_note-59">[59]</a></sup><sup><a href="#cite_note-60">[60]</a></sup>
</p><p>In 2018, the firm raised $300 million for a dedicated cryptocurrency fund.<sup><a href="#cite_note-61">[61]</a></sup> It has also invested in Imply, <a href="/wiki/Smartcar_(company)">Smartcar</a>, PeerStreet, <a href="/wiki/CryptoKitties">CryptoKitties</a>, Dfinity, <a href="/wiki/Earnin">Earnin</a>, <a href="/wiki/Pindrop_Security">Pindrop</a>, Tenfold, and Very Good Security.<sup><a href="#cite_note-62">[62]</a></sup><sup><a href="#cite_note-63">[63]</a></sup><sup><a href="#cite_note-64">[64]</a></sup><sup><a href="#cite_note-65">[65]</a></sup><sup><a href="#cite_note-66">[66]</a></sup>
</p><p>In 2019 the firm provided $15.3 million in <a href="/wiki/Series_A_funding">Series A funding</a> to <a href="/wiki/Substack">Substack</a>, some of which went to bringing high-profile writers into that network.
<sup><a href="#cite_note-NYmag-Aug20-67">[67]</a></sup> In June 2019 the firm also invested in a $9.2 million Series A round in <a href="/wiki/AnyRoad">AnyRoad</a>, an experiential marketing platform, and David Ulevitch from Andreessen Horowitz joined the AnyRoad board.<sup><a href="#cite_note-68">[68]</a></sup>
</p>
<h3>2020[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=8">edit</a>]</h3>
<p>In 2020, the firm led a $150 million Series G round in <a href="/wiki/Roblox">Roblox</a>, a social video game platform for children.<sup><a href="#cite_note-wsjrbx-69">[69]</a></sup><sup><a href="#cite_note-tcrbx-70">[70]</a></sup>
</p><p>In April 2020, the firm led a $50 million Series D round in <a href="/wiki/Figma_(software)">Figma</a>, a vector graphics editor and prototyping tool.<sup><a href="#cite_note-71">[71]</a></sup>
</p><p>Also in April 2020, the firm raised $515 million for a second cryptocurrency-focused fund.<sup><a href="#cite_note-72">[72]</a></sup>
</p><p>In May 2020, the firm made a $12 million Series A investment in Clubhouse ($10 million in primary capital plus $2 million toward purchasing shares), an audio-chat social networking app valued at nearly $100 million as of December 2020.<sup><a href="#cite_note-73">[73]</a></sup><sup><a href="#cite_note-74">[74]</a></sup>
</p>
<h3>2021[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=9">edit</a>]</h3>
<p>In January 2021, the firm led a $100 million Series B for the audio-chat social networking app <a href="/wiki/Clubhouse_(app)">Clubhouse</a>, reportedly valuing it at $1 billion.<sup><a href="#cite_note-75">[75]</a></sup> In April 2021, it led a $220 million Series D for mobile banking and fintech company <a href="/wiki/Finco_Services_Inc">Current.</a><sup><a href="#cite_note-76">[76]</a></sup><sup><a href="#cite_note-77">[77]</a></sup>
</p><p>In July 2021, the firm led a $100 million Series A for the NFT marketplace <a href="/wiki/OpenSea">OpenSea</a>, reportedly valuing it at $1.5 billion.<sup><a href="#cite_note-78">[78]</a></sup>
</p><p>In September 2021, the firm led an <a href="https://a16z.com/2021/09/22/investing-in-pearl-health/">$18 million Series A fundraise</a> in Pearl Health, a healthcare technology company.
</p><p>In October 2021, A16z led the round to Raise $150M Series B at $3B Valuation in <a href="/wiki/Vietnam">Vietnamese</a> studio Sky Mavis, the developer of crypto-based online game <a href="/wiki/Axie_Infinity">Axie Infinity</a>.<sup><a href="#cite_note-79">[79]</a></sup><sup><a href="#cite_note-80">[80]</a></sup>
</p>
<h3>2022[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=10">edit</a>]</h3>
<p>In March 2022, Andreessen Horowitz led the round to raise $450 million at a $4B Valuation in Yuga Labs.<sup><a href="#cite_note-81">[81]</a></sup> In October 2022, it was reported that the US <a href="/wiki/U.S._Securities_and_Exchange_Commission">Securities and Exchange Commission</a> were investigating <a href="/wiki/Bored_Ape">Yuga Labs</a>, due to concerns that sales of their digital assess violated US investment laws.<sup><a href="#cite_note-82">[82]</a></sup>
</p><p>In March 2022, the firm led $27 million Series A for the Rutter, a universal API for commerce data.<sup><a href="#cite_note-83">[83]</a></sup>
</p><p>In March 2022, A16z with <a href="/wiki/Lux_Capital">Lux Capital</a> co-led an $90 million round of Los Angeles-based machine-parts start-up Hadrian Automation.<sup><a href="#cite_note-84">[84]</a></sup>
</p><p>In May 2022, the firm announced the launch of its largest fund to date at $4.5 billion. The fund is set to focus on cryptocurrency and blockchain technologies. The firm stated that $1.5 billion was allocated to seed investments while the remaining $3 billion would be earmarked for venture investments.<sup><a href="#cite_note-85">[85]</a></sup>
</p><p>In August 2022, the firm announced it would be investing about $350 million in <a href="/wiki/Flow_(real_estate_company)">Flow</a>, the latest organization begun by <a href="/wiki/WeWork">WeWork</a> founder <a href="/wiki/Adam_Neumann">Adam Neumann</a>. The purported aim of Flow is to create a branded product in the housing market with consistent community features, reimagining how real estate works in the US. <sup><a href="#cite_note-86">[86]</a></sup> The decision was met with some criticism due to Neumann's previous business issues in his time at WeWork. <sup><a href="#cite_note-87">[87]</a></sup>
</p><p>The firm committed to $400 million in equity investment towards <a href="/wiki/Acquisition_of_Twitter_by_Elon_Musk">acquisition of Twitter by Elon Musk</a> that completed in October 2022.<sup><a href="#cite_note-88">[88]</a></sup><sup><a href="#cite_note-89">[89]</a></sup>
</p>
<h2>Structure[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=11">edit</a>]</h2>
<p>Andreessen Horowitz partners work on behalf of all its portfolio companies, an approach modeled after the Hollywood talent agency, <a href="/wiki/Creative_Artists_Agency">Creative Artists Agency</a>.<sup><a href="#cite_note-Financial_Times-90">[90]</a></sup> In 2010, the company hired <a href="/wiki/Margit_Wennmachers">Margit Wennmachers</a>, a marketing executive at the partner level.<sup><a href="#cite_note-NYTimes_Bits-91">[91]</a></sup>
</p><p>As of 2011, the firm had maintained a database of designers, coders, and executives and used it to help fill positions at its start-ups.<sup><a href="#cite_note-The_Economist-92">[92]</a></sup> Former U.S. Treasury Secretary <a href="/wiki/Lawrence_Summers">Larry Summers</a> became a special advisor to Andreessen Horowitz in June 2011.<sup><a href="#cite_note-GigaOM_June_2011-93">[93]</a></sup>
</p><p>In September 2012, former Washington D.C. mayor <a href="/wiki/Adrian_Fenty">Adrian Fenty</a> was appointed Andreessen Horowitz's second special advisor.<sup><a href="#cite_note-WSJ_Sept_2012-94">[94]</a></sup> Fenty was hired to advise the firm's portfolio companies on working with local, state, and federal governments.<sup><a href="#cite_note-GigaOM_June_2011-93">[93]</a></sup>
</p><p>In 2019, the firm applied to restructure as a registered investment adviser in order to have more freedom to take up riskier bets like <a href="/wiki/Cryptocurrency">cryptocurrency</a>.<sup><a href="#cite_note-95">[95]</a></sup><sup><a href="#cite_note-96">[96]</a></sup>
</p>
<h2>References[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=12">edit</a>]</h2>
<div><ol>
<li><b><a href="#cite_ref-TechCrunch_News2_1-0">^</a></b> <cite>Arrington, Michael. <a href="https://techcrunch.com/2010/06/20/andreessen-horowitz-celebrates-first-year-with-new-general-partner-john-ofarrell/">"Andreessen Horowitz Celebrates First Year With New General Partner John O'Farrell"</a>. <i>News</i>. TechCrunch. Retrieved April 14, 2012.</cite>
</li>
<li>^ <a href="#cite_ref-ben_2-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-ben_2-1"><sup><i><b>b</b></i></sup></a> <a href="#cite_ref-ben_2-2"><sup><i><b>c</b></i></sup></a> <cite>Horowitz, Ben. <a href="https://web.archive.org/web/20110407235346/http://bhorowitz.com/2011/04/06/andreessen-horowitz-has-a-new-200mm-co-investment-fund/">"Andreessen Horowitz has a new $200m Co-Investment Fund"</a>. <i>ben's blog</i>. Andreessen Horowitz. Archived from <a href="http://bhorowitz.com/2011/04/06/andreessen-horowitz-has-a-new-200mm-co-investment-fund/">the original</a> on April 7, 2011. Retrieved April 13, 2012.</cite>
</li>
<li>^ <a href="#cite_ref-UCLA_3-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-UCLA_3-1"><sup><i><b>b</b></i></sup></a> <cite>Wong Kromhout, Wileen. <a href="https://web.archive.org/web/20120212181829/http://www.engineer.ucla.edu/visitor-links/alumni/alumni-profiles-1/ben-horowitz-ms-201990">"Ben Horowitz MS '90"</a>. <i>UCLA Engineering</i>. UCLA. Archived from <a href="http://www.engineer.ucla.edu/visitor-links/alumni/alumni-profiles-1/ben-horowitz-ms-201990">the original</a> on February 12, 2012. Retrieved April 13, 2012.</cite>
</li>
<li>^ <a href="#cite_ref-CNN_4-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-CNN_4-1"><sup><i><b>b</b></i></sup></a> <a href="#cite_ref-CNN_4-2"><sup><i><b>c</b></i></sup></a> <a href="#cite_ref-CNN_4-3"><sup><i><b>d</b></i></sup></a> <cite>Maney, Kevin (July 6, 2009). <a href="https://money.cnn.com/2009/07/02/technology/marc_andreessen_venture_fund.fortune/index.htm">"Marc Andreessen puts his money where his mouth is"</a>. <i>CNNMoney</i>. CNN. Retrieved April 13, 2012.</cite>
</li>
<li><b><a href="#cite_ref-NYTimes_5-0">^</a></b> <cite>Cain Miller, Claire (November 3, 2010). <a href="http://bits.blogs.nytimes.com/2010/11/03/andreessen-horowitz-starts-second-fund/">"Andreessen Horowitz Starts Second Fund"</a>. <i>The New York Times</i>. Retrieved April 14, 2012.</cite>
</li>
<li><b><a href="#cite_ref-Forbes_6-0">^</a></b> <cite><a href="https://web.archive.org/web/20180209064848/https://www.forbes.com/lists/midas/2011/profile/marc-andreessen.html">"#10 Marc Andreessen"</a>. <i>Midas List Tech's Top Investors</i>. Forbes. Archived from <a href="https://www.forbes.com/lists/midas/2011/profile/marc-andreessen.html">the original</a> on February 9, 2018. Retrieved April 13, 2012.</cite>
</li>
<li><b><a href="#cite_ref-Vanity_Fair_7-0">^</a></b> <cite><a href="http://www.vanityfair.com/online/daily/2011/09/the-2011-new-establishment-list--and-the-top-spot-goes-to---?mobify=0">"The 2011 New Establishment List: And the Top Spot Goes to..."</a> <i>VF Daily</i>. Vanity Fair. September 2011. Retrieved April 13, 2012.</cite>
</li>
<li><b><a href="#cite_ref-CNET_8-0">^</a></b> <cite><a href="https://web.archive.org/web/20120208230221/http://news.cnet.com/2300-1001_3-10010632.html">"Marc Andreessen and Ben Horowitz"</a>. <i>CNET News</i>. CNET. Archived from <a href="http://news.cnet.com/2300-1001_3-10010632.html">the original</a> on February 8, 2012. Retrieved April 13, 2012.</cite>
</li>
<li><b><a href="#cite_ref-TechCrunch_Venture_9-0">^</a></b> <cite>Dillet, Romain. <a href="https://techcrunch.com/2014/03/27/andreessen-horowitz-raises-massive-new-1-5-billion-fund/">"Andreessen Horowitz Raises Massive New $1.5 Billion Fund"</a>. TechCrunch. Retrieved May 15, 2014.</cite>
</li>
<li><b><a href="#cite_ref-10">^</a></b> <cite>Rooney, Kate (October 6, 2019). <a href="https://www.cnbc.com/2019/10/06/meet-the-former-prosecutor-who-became-the-face-of-crypto-vc-investing.html">"Meet the former prosecutor asked to investigate bitcoin who became the face of crypto VC investing"</a>. <i>CNBC</i>. Retrieved October 9, 2019.</cite>
</li>
<li><b><a href="#cite_ref-11">^</a></b> <cite><a href="https://a16z.com/about/team/">"Team – Andreessen Horowitz"</a>. <i>a16z.com</i>. Retrieved January 15, 2017.</cite>
</li>
<li><b><a href="#cite_ref-12">^</a></b> <cite><a href="https://techcrunch.com/2018/07/17/connie-chan-breaks-the-mold-at-andreessen-horowitz-becoming-the-first-general-partner-to-be-promoted-from-within/">"Connie Chan breaks the mold at Andreessen Horowitz, becoming the first general partner to be promoted from within"</a>. <i>techcrunch.com</i>. June 17, 2018. Retrieved January 16, 2020.</cite>
</li>
<li><b><a href="#cite_ref-13">^</a></b> <cite><a href="https://www.recode.net/2018/2/15/17016356/andrew-chen-andreessen-horowitz-uber">"An Uber executive is now the newest shot-caller at Andreessen Horowitz"</a>. <i>Recode</i>. Retrieved April 11, 2018.</cite>
</li>
<li><b><a href="#cite_ref-14">^</a></b> <cite><a href="/wiki/The_Associated_Press">The Associated Press</a> (June 30, 2018). <a href="https://abcnews.go.com/US/wireStory/barack-obama-visits-venture-capital-firm-california-trip-56288370">"Barack Obama visits venture capital firm on California trip"</a>. <i><a href="/wiki/ABC_News">ABC News</a></i>.</cite>
</li>
<li><b><a href="#cite_ref-FootnoteA_15-0">^</a></b> <cite>Kawamoto, Dawn (March 11, 2019). <a href="https://www.bizjournals.com/sanfrancisco/news/2019/03/11/venture-capital-andreessen-horowitz-y-combinator.html">"Venture capital powerhouse is latest Silicon Valley firm to open San Francisco office"</a>. <i>www.bizjournals.com</i>. <a href="/wiki/San_Francisco_Business_Times">San Francisco Business Times</a>. Retrieved March 16, 2019.</cite>
</li>
<li><b><a href="#cite_ref-16">^</a></b> <cite>Horowitz, Ben (January 7, 2022). <a href="https://a16z.com/2022/01/07/9b-to-build-the-future/">"$9B to Build the Future"</a>.</cite><code>{{<a href="/wiki/Template:Cite_web">cite web</a>}}</code>: CS1 maint: url-status (<a href="/wiki/Category:CS1_maint:_url-status">link</a>)
</li>
<li><b><a href="#cite_ref-17">^</a></b> <cite>Wilhelm, Alex (January 7, 2022). <a href="https://techcrunch.com/2022/01/07/andreessen-horowitz-raises-9b-in-new-capital-for-venture-growth-bio-funds/">"Andreessen Horowitz raises $9B in new capital for venture, growth, bio funds"</a>. <i>TechCrunch</i>.</cite>
</li>
<li><b><a href="#cite_ref-18">^</a></b> <cite><a href="https://www.bloomberg.com/news/videos/2021-08-04/bloomberg-wealth-with-david-rubenstein-marc-andreessen-video">"Bloomberg Wealth with David Rubenstein: Marc Andreessen"</a>. <i><a href="/wiki/Bloomberg_News">Bloomberg News</a></i>.</cite>
</li>
<li><b><a href="#cite_ref-19">^</a></b> <cite><a href="https://a16z.com/about/">"About"</a>. <i>Andreessen Horowitz</i>. Retrieved August 31, 2021.</cite>
</li>
<li><b><a href="#cite_ref-VB_Aug_2009_20-0">^</a></b> <cite>Ricketts, Camille (August 19, 2009). <a href="https://venturebeat.com/2009/08/19/first-andreessen-horowitz-investment-apptio-raises-14m/">"First Andreessen Horowitz investment, Apptio, raises $14M"</a>. <i>Venture Beat</i>. Retrieved March 20, 2014.</cite>
</li>
<li>^ <a href="#cite_ref-WSJ_21-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-WSJ_21-1"><sup><i><b>b</b></i></sup></a> <a href="#cite_ref-WSJ_21-2"><sup><i><b>c</b></i></sup></a> <cite>Ovide, Shira (May 10, 2011). <a href="https://blogs.wsj.com/deals/2011/05/10/microsoft-skype-deal-andreessen-horowitz-takes-victory-lap/">"Microsoft-Skype Deal: Andreessen Horowitz Takes Victory Lap"</a>. <i>The Wall Street Journal</i>. Retrieved April 14, 2012.</cite>
</li>
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<li><b><a href="#cite_ref-87">^</a></b> <cite><a href="https://www.vice.com/en/article/4ax3bw/nimby-marc-andreessen-gives-weworks-adam-neumann-dollar350-million-to-uhh-solve-the-housing-crisis">"NIMBY Marc Andreessen Gives WeWork's Adam Neumann $350 Million to, Uhh, Solve the Housing Crisis"</a>. <i>Vox</i>. August 15, 2022. Retrieved August 15, 2022.</cite><code>{{<a href="/wiki/Template:Cite_web">cite web</a>}}</code>: CS1 maint: url-status (<a href="/wiki/Category:CS1_maint:_url-status">link</a>)
</li>
<li><b><a href="#cite_ref-88">^</a></b> <cite>Jin, Berber (October 25, 2022). <a href="https://www.wsj.com/articles/sequoia-capitals-roelof-botha-predicts-success-for-elon-musk-at-twitter-11666747888">"Sequoia Capital's Roelof Botha Predicts Success for Elon Musk at Twitter"</a>. <i><a href="/wiki/The_Wall_Street_Journal">The Wall Street Journal</a></i>. <a href="http://archive.today/2022.10.26-042325/https://www.wsj.com/amp/articles/sequoia-capitals-roelof-botha-predicts-success-for-elon-musk-at-twitter-11666747888">Archived</a> from the original on October 26, 2022.</cite>
</li>
<li><b><a href="#cite_ref-89">^</a></b> <cite>Dwoskin, Elizabeth; Siddiqui, Faiz (October 31, 2022). <a href="https://www.washingtonpost.com/technology/2022/10/31/elon-musk-twitter-layoffs/">"Musk's inner circle worked through weekend to cement Twitter layoff plans"</a>. <i><a href="/wiki/The_Washington_Post">The Washington Post</a></i>. <a href="http://archive.today/2022.10.31-200731/https://www.washingtonpost.com/technology/2022/10/31/elon-musk-twitter-layoffs/">Archived</a> from the original on October 31, 2022.</cite>
</li>
<li><b><a href="#cite_ref-Financial_Times_90-0">^</a></b> <cite>Menn, Joseph (November 3, 2010). <a href="https://www.ft.com/intl/cms/s/0/af5c1a7c-e717-11df-880d-00144feab49a.html?ftcamp=rss#axzz1gRgXwx3C">"Andreessen expands venture capital business"</a>. <i>Financial Times</i>. The Financial Times. Retrieved April 14, 2012.</cite>
</li>
<li><b><a href="#cite_ref-NYTimes_Bits_91-0">^</a></b> <cite>Cain Miller, Claire (June 15, 2010). <a href="http://bits.blogs.nytimes.com/2010/06/15/andreessen-horowitz-hires-a-female-partner-from-outcast-communications/">"Andreessen Horowitz Hires a Female Partner"</a>. <i>The New York Times</i>. Retrieved April 19, 2012.</cite>
</li>
<li><b><a href="#cite_ref-The_Economist_92-0">^</a></b> <cite><a href="http://www.economist.com/node/21527020">"Disrupting the disrupters"</a>. <i>Technology Quarterly: Q3 2011</i>. The Economist. September 3, 2011. Retrieved April 14, 2012.</cite>
</li>
<li>^ <a href="#cite_ref-GigaOM_June_2011_93-0"><sup><i><b>a</b></i></sup></a> <a href="#cite_ref-GigaOM_June_2011_93-1"><sup><i><b>b</b></i></sup></a> <cite>Fielding, Cortney (June 29, 2011). <a href="http://gigaom.com/2011/06/29/larry-summers-to-join-vc-firm-andreessen-horowitz/">"Larry Summers to join VC firm Andreessen Horowitz"</a>. <i>GigaOM</i>. Retrieved September 28, 2012.</cite>
</li>
<li><b><a href="#cite_ref-WSJ_Sept_2012_94-0">^</a></b> <cite>Tam, Pui-Wing (September 26, 2012). <a href="https://blogs.wsj.com/digits/2012/09/26/andreessen-horowitzs-new-political-mover-and-shaker-adrian-fenty/">"Andreessen Horowitz's New Political Mover-and-Shaker: Adrian Fenty"</a>. <i>The Wall Street Journal</i>. Retrieved September 28, 2012.</cite>
</li>
<li><b><a href="#cite_ref-95">^</a></b> <cite>Gaus, Annie (April 2, 2019). <a href="https://www.thestreet.com/investing/cryptocurrency/andreesen-horowitz-silicon-valley-vc-firm-to-refocus-on-high-risk-crypto-bets-14915423">"Andreessen Horowitz, Silicon Valley VC Firm, to Refocus on High-Risk Crypto Bets"</a>. <i>TheStreet</i>. Retrieved April 3, 2019.</cite>
</li>
<li><b><a href="#cite_ref-96">^</a></b> <cite>Konrad, Alex. <a href="https://www.forbes.com/sites/alexkonrad/2019/04/02/andreessen-horowitz-is-blowing-up-the-venture-capital-model-again/">"Andreessen Horowitz Is Blowing Up The Venture Capital Model (Again)"</a>. <i>Forbes</i>. Retrieved April 3, 2019.</cite>
</li>
</ol></div>
<h2>External links[<a href="/w/index.php?title=Andreessen_Horowitz&amp;action=edit&amp;section=13">edit</a>]</h2>
<ul><li><a href="http://www.a16z.com/">Andreessen-Horowitz web site</a></li>
<li><a href="https://web.archive.org/web/20130509200013/http://nowaternomoon.com/post/49246444743/frank-chen-partner-at-andreessen-horowitz-are-you-a">Frank Chen, Partner at Andreessen Horowitz: 'Are you a mercenary or a missionary?'</a> (04.24.2013)</li></ul>
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 * (Top)
 * 1 Founding and partnering
 * 2 Notable investments
 + 2.1 2009
 + 2.2 2010–2011
 + 2.3 2012–2013
 + 2.4 2014–2015
 + 2.5 2016–2019
 + 2.6 2020
 + 2.7 2021
 + 2.8 2022
 * 3 Structure
 * 4 References
 * 5 External links
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 Andreessen Horowitz

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 From Wikipedia, the free encyclopedia

 AH Capital Management, LLC
 
 Type Private 
 Industry Venture capital 
 Founded July 6, 2009 ; 13 years ago 
 Founders Marc Andreessen 
 Ben Horowitz 
 Headquarters Menlo Park, California, U.S.
 AUM $28.2 billion 
 (as of April 5, 2022) 
 Website www.a16z.com 
 

 Andreessen Horowitz (also called a16z, legal name AH Capital Management, LLC) is a private American venture capital firm, founded in 2009 by Marc Andreessen and Ben Horowitz. The company is headquartered in Menlo Park, California.

 Andreessen Horowitz invests in both early-stage start-ups and established growth companies.[1] Its investments span the mobile, cryptocurrency, gaming, social, e-commerce, education and enterprise IT (including cloud computing, security, and software as a service) industries.[2]

 Founding and partnering [ edit ]

 Marc Andreessen (left) and Ben Horowitz (right) are the company's founders.

 Between 2006 and 2010, Marc Andreessen and Ben Horowitz actively invested in technology companies. Separately, and together, they invested $4 million in 45 start-ups including Twitter.[3] During this time, the two became known as "super angel" investors.[3]

 On July 6, 2009, Andreessen and Horowitz launched their venture capital fund with an initial capitalization of $300 million.[4] In November 2010, at a time when the field of venture capitalism was contracting, the company raised another $650 million for a second venture fund.[4][5] In less than two years, the firm was managing a total of $1.2 billion under the two funds.[2]

 In May 2011, Andreessen ranked number 10 on the 2011 Forbes Midas List of Tech's Top Investors[6] while he and Horowitz ranked number 6 on Vanity Fair's 2011 New Establishment List[7] and number 1 on CNET's 2011 most influential investors list.[8]

 As of March 27, 2014, the firm managed $4 billion in assets after the closing of its fourth fund at $1.5 billion.[9]

 In addition to Andreessen and Horowitz, the firm's general partners include John O'Farrell, Scott Weiss, Jeff Jordan, Peter Levine, Chris Dixon, Vijay Pande, Katie Haun,[10] Alex Rampell, Martin Casado, Connie Chan, Andrew Chen, and Sriram Krishnan.[11][12][13][14] In March 2019, it was reported that Andreessen Horowitz was opening an office in San Francisco.[15]

 In January 2022, Andreessen Horowitz raised $9 billion for its venture capital, growth-stage and biotech-focused vehicles.[16][17]

 As of April 2022, the firm manages $28.2 billion in assets.[18][19]

 Notable investments [ edit ]

 2009 [ edit ]

 In 2009, Andreessen Horowitz made its two first investments: one in business management SaaS developer Apptio[20] and the other in Skype stock.[21] According to Horowitz, the investment was seen as risky by other experts in the field who believed the company would be crippled by ongoing intellectual property litigation and direct competitive attacks from Google and Apple.[21] The company's founders viewed the investment as a success following Skype's sale to Microsoft in May 2011 for $8.5 billion.[21]

 2010–2011 [ edit ]

 In 2010, Andreessen Horowitz invested $10 million in cloud company Okta while leading its Series A Round.[22]

 In 2011, Andreessen Horowitz invested $80 million in Twitter,[4] becoming the first venture firm that held stock in all four of the highest-valued, privately held social media companies at the time: Facebook, Groupon, Twitter, and Zynga.[2] Andreessen Horowitz has also invested in Airbnb, Lytro, Jawbone, Belly, Foursquare, Stripe and other high-tech companies.[4][23][24]

 2012–2013 [ edit ]

 In 2012, Andreessen Horowitz invested in 156 companies, including the 90 companies in its portfolio,[25] and 66 start-ups[26] through its funding of Y Combinator's Start Fund.[27] The company invested $100 million in GitHub, which netted over $1 billion for the fund when GitHub was acquired by Microsoft for $7.5 billion.[28][29] In 2013, Andreessen Horowitz invested in Clinkle, Coinbase, Databricks, Lyft, Oculus VR, PagerDuty, Pixlee, Ripple, Soylent, Swiftype and uBiome.[30][31][32][33][34][35][36]

 2014–2015 [ edit ]

 In 2014, the firm led a $57 million Series B round in the A/B testing startup Optimizely.[37] That same year the company invested in several more companies, including Tanium for $90 million,[38] BuzzFeed,[39] and Forward Networks.[40] In 2015, the firm invested $40 million in Stack Exchange,[41][42] $2.8 million in Distelli,[43] and $80 million in cloud-based CAD software company Onshape.[44] Also in 2015 Andreessen Horowitz invested in the blogging platform Medium,[45] Samsara,[46] Improbable,[47] Honor, Inc.,[48] OpenBazaar,[49][50] a blockchain startup, and nootropics and biohacking company Nootrobox.[51]

 2016–2019 [ edit ]

 In 2016, the firm led an $8.1 million Series A round in Everlaw, a legal technology company, and led a $3.5 million Series Seed round in RapidAPI, an API connection platform for developers.[52][53] Also in 2016, the firm invested $2 million in Cardiogram, a digital health company,[54] and Apeel Sciences, a food science business.[55]

 In 2017, the firm invested in Sigma, Health IQ, Asimov, and Cadre.[56][57][58][59][60]

 In 2018, the firm raised $300 million for a dedicated cryptocurrency fund.[61] It has also invested in Imply, Smartcar, PeerStreet, CryptoKitties, Dfinity, Earnin, Pindrop, Tenfold, and Very Good Security.[62][63][64][65][66]

 In 2019 the firm provided $15.3 million in Series A funding to Substack, some of which went to bringing high-profile writers into that network. [67] In June 2019 the firm also invested in a $9.2 million Series A round in AnyRoad, an experiential marketing platform, and David Ulevitch from Andreessen Horowitz joined the AnyRoad board.[68]

 2020 [ edit ]

 In 2020, the firm led a $150 million Series G round in Roblox, a social video game platform for children.[69][70]

 In April 2020, the firm led a $50 million Series D round in Figma, a vector graphics editor and prototyping tool.[71]

 Also in April 2020, the firm raised $515 million for a second cryptocurrency-focused fund.[72]

 In May 2020, the firm made a $12 million Series A investment in Clubhouse ($10 million in primary capital plus $2 million toward purchasing shares), an audio-chat social networking app valued at nearly $100 million as of December 2020.[73][74]

 2021 [ edit ]

 In January 2021, the firm led a $100 million Series B for the audio-chat social networking app Clubhouse, reportedly valuing it at $1 billion.[75] In April 2021, it led a $220 million Series D for mobile banking and fintech company Current.[76][77]

 In July 2021, the firm led a $100 million Series A for the NFT marketplace OpenSea, reportedly valuing it at $1.5 billion.[78]

 In September 2021, the firm led an $18 million Series A fundraise in Pearl Health, a healthcare technology company.

 In October 2021, A16z led the round to Raise $150M Series B at $3B Valuation in Vietnamese studio Sky Mavis, the developer of crypto-based online game Axie Infinity.[79][80]

 2022 [ edit ]

 In March 2022, Andreessen Horowitz led the round to raise $450 million at a $4B Valuation in Yuga Labs.[81] In October 2022, it was reported that the US Securities and Exchange Commission were investigating Yuga Labs, due to concerns that sales of their digital assess violated US investment laws.[82]

 In March 2022, the firm led $27 million Series A for the Rutter, a universal API for commerce data.[83]

 In March 2022, A16z with Lux Capital co-led an $90 million round of Los Angeles-based machine-parts start-up Hadrian Automation.[84]

 In May 2022, the firm announced the launch of its largest fund to date at $4.5 billion. The fund is set to focus on cryptocurrency and blockchain technologies. The firm stated that $1.5 billion was allocated to seed investments while the remaining $3 billion would be earmarked for venture investments.[85]

 In August 2022, the firm announced it would be investing about $350 million in Flow, the latest organization begun by WeWork founder Adam Neumann. The purported aim of Flow is to create a branded product in the housing market with consistent community features, reimagining how real estate works in the US. [86] The decision was met with some criticism due to Neumann's previous business issues in his time at WeWork. [87]

 The firm committed to $400 million in equity investment towards acquisition of Twitter by Elon Musk that completed in October 2022.[88][89]

 Structure [ edit ]

 Andreessen Horowitz partners work on behalf of all its portfolio companies, an approach modeled after the Hollywood talent agency, Creative Artists Agency.[90] In 2010, the company hired Margit Wennmachers, a marketing executive at the partner level.[91]

 As of 2011, the firm had maintained a database of designers, coders, and executives and used it to help fill positions at its start-ups.[92] Former U.S. Treasury Secretary Larry Summers became a special advisor to Andreessen Horowitz in June 2011.[93]

 In September 2012, former Washington D.C. mayor Adrian Fenty was appointed Andreessen Horowitz's second special advisor.[94] Fenty was hired to advise the firm's portfolio companies on working with local, state, and federal governments.[93]

 In 2019, the firm applied to restructure as a registered investment adviser in order to have more freedom to take up riskier bets like cryptocurrency.[95][96]

 References [ edit ]

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 83. ^ Hall, Christine (March 15, 2022). "a16z backs Rutter's goal of being 'Plaid for commerce'". TechCrunch.
 84. ^ Sheetz, Michael (March 31, 2022). "Machine-parts start-up Hadrian raises $90 million as it seeks to shake up the aerospace supply chain". CNBC.
 85. ^ "Andreessen Horowitz bets on crypto 'golden era' with new $4.5bn fund". Financial Times. May 25, 2022 . Retrieved May 25, 2022 .{{cite web}} : CS1 maint: url-status ( link )
 86. ^ "Adam Neumann Gets a New Backer". The New York Times. August 15, 2022 . Retrieved August 15, 2022 .{{cite web}} : CS1 maint: url-status ( link )
 87. ^ "NIMBY Marc Andreessen Gives WeWork's Adam Neumann $350 Million to, Uhh, Solve the Housing Crisis". Vox. August 15, 2022 . Retrieved August 15, 2022 .{{cite web}} : CS1 maint: url-status ( link )
 88. ^ Jin, Berber (October 25, 2022). "Sequoia Capital's Roelof Botha Predicts Success for Elon Musk at Twitter". The Wall Street Journal. Archived from the original on October 26, 2022.
 89. ^ Dwoskin, Elizabeth; Siddiqui, Faiz (October 31, 2022). "Musk's inner circle worked through weekend to cement Twitter layoff plans". The Washington Post. Archived from the original on October 31, 2022.
 90. ^ Menn, Joseph (November 3, 2010). "Andreessen expands venture capital business". Financial Times. The Financial Times . Retrieved April 14, 2012 .
 91. ^ Cain Miller, Claire (June 15, 2010). "Andreessen Horowitz Hires a Female Partner". The New York Times . Retrieved April 19, 2012 .
 92. ^ "Disrupting the disrupters". Technology Quarterly: Q3 2011. The Economist. September 3, 2011 . Retrieved April 14, 2012 .
 93. ^ a b Fielding, Cortney (June 29, 2011). "Larry Summers to join VC firm Andreessen Horowitz". GigaOM . Retrieved September 28, 2012 .
 94. ^ Tam, Pui-Wing (September 26, 2012). "Andreessen Horowitz's New Political Mover-and-Shaker: Adrian Fenty". The Wall Street Journal . Retrieved September 28, 2012 .
 95. ^ Gaus, Annie (April 2, 2019). "Andreessen Horowitz, Silicon Valley VC Firm, to Refocus on High-Risk Crypto Bets". TheStreet . Retrieved April 3, 2019 .
 96. ^ Konrad, Alex. "Andreessen Horowitz Is Blowing Up The Venture Capital Model (Again)". Forbes . Retrieved April 3, 2019 .

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From Wikipedia, the free encyclopedia
	 
 AH Capital Management, LLC         Type  Private    Industry  Venture capital    Founded July 6, 2009; 13 years ago   Founders  Marc Andreessen  Ben Horowitz    Headquarters    Menlo Park, California  ,   U.S.       AUM  $28.2 billion(as of April 5, 2022)   Website  www .a16z .com    
 Andreessen Horowitz (also called a16z, legal name AH Capital Management, LLC) is a private American venture capital firm, founded in 2009 by Marc Andreessen and Ben Horowitz. The company is headquartered in Menlo Park, California.
 Andreessen Horowitz invests in both early-stage start-ups and established growth companies. [1]  Its investments span the mobile, cryptocurrency, gaming, social, e-commerce, education and enterprise IT (including cloud computing, security, and software as a service) industries. [2] 
Founding and partnering[edit]
                Marc Andreessen (left) and Ben Horowitz (right) are the company's founders.  
Between 2006 and 2010, Marc Andreessen and Ben Horowitz actively invested in technology companies. Separately, and together, they invested $4 million in 45 start-ups including Twitter. [3]  During this time, the two became known as "super angel" investors. [3] 
 On July 6, 2009, Andreessen and Horowitz launched their venture capital fund with an initial capitalization of $300 million. [4]  In November 2010, at a time when the field of venture capitalism was contracting, the company raised another $650 million for a second venture fund. [4]   [5]  In less than two years, the firm was managing a total of $1.2 billion under the two funds. [2] 
 In May 2011, Andreessen ranked number 10 on the 2011 Forbes Midas List of Tech's Top Investors [6]  while he and Horowitz ranked number 6 on Vanity Fair's 2011 New Establishment List [7]  and number 1 on CNET's 2011 most influential investors list. [8] 
 As of March 27, 2014, the firm managed $4 billion in assets after the closing of its fourth fund at $1.5 billion. [9] 
 In addition to Andreessen and Horowitz, the firm's general partners include John O'Farrell, Scott Weiss, Jeff Jordan, Peter Levine, Chris Dixon, Vijay Pande, Katie Haun, [10]  Alex Rampell, Martin Casado, Connie Chan, Andrew Chen, and Sriram Krishnan. [11]   [12]   [13]   [14]  In March 2019, it was reported that Andreessen Horowitz was opening an office in San Francisco. [15] 
 In January 2022, Andreessen Horowitz raised $9 billion for its venture capital, growth-stage and biotech-focused vehicles. [16]   [17] 
 As of April 2022, the firm manages $28.2 billion in assets. [18]   [19] 
Notable investments[edit]
2009[edit]
In 2009, Andreessen Horowitz made its two first investments: one in business management SaaS developer Apptio  [20]  and the other in Skype stock. [21]  According to Horowitz, the investment was seen as risky by other experts in the field who believed the company would be crippled by ongoing intellectual property litigation and direct competitive attacks from Google and Apple. [21]  The company's founders viewed the investment as a success following Skype's sale to Microsoft in May 2011 for $8.5 billion. [21] 
2010–2011[edit]
In 2010, Andreessen Horowitz invested $10 million in cloud company Okta while leading its Series A Round. [22] 
 In 2011, Andreessen Horowitz invested $80 million in Twitter, [4]  becoming the first venture firm that held stock in all four of the highest-valued, privately held social media companies at the time: Facebook, Groupon, Twitter, and Zynga. [2]  Andreessen Horowitz has also invested in Airbnb, Lytro, Jawbone, Belly, Foursquare, Stripe and other high-tech companies. [4]   [23]   [24] 
2012–2013[edit]
In 2012, Andreessen Horowitz invested in 156 companies, including the 90 companies in its portfolio, [25]  and 66 start-ups [26]  through its funding of Y Combinator's Start Fund. [27]  The company invested $100 million in GitHub, which netted over $1 billion for the fund when GitHub was acquired by Microsoft for $7.5 billion. [28]   [29]  In 2013, Andreessen Horowitz invested in Clinkle, Coinbase, Databricks, Lyft, Oculus VR, PagerDuty, Pixlee, Ripple, Soylent, Swiftype and uBiome. [30]   [31]   [32]   [33]   [34]   [35]   [36] 
2014–2015[edit]
In 2014, the firm led a $57 million Series B round in the A/B testing startup Optimizely. [37]  That same year the company invested in several more companies, including Tanium for $90 million, [38]  BuzzFeed, [39]  and Forward Networks. [40]  In 2015, the firm invested $40 million in Stack Exchange, [41]   [42]  $2.8 million in Distelli, [43]  and $80 million in cloud-based CAD software company Onshape. [44]  Also in 2015 Andreessen Horowitz invested in the blogging platform Medium, [45]  Samsara, [46]  Improbable, [47]  Honor, Inc., [48]  OpenBazaar, [49]   [50]  a blockchain startup, and nootropics and biohacking company Nootrobox. [51] 
2016–2019[edit]
In 2016, the firm led an $8.1 million Series A round in Everlaw, a legal technology company, and led a $3.5 million Series Seed round in RapidAPI, an API connection platform for developers. [52]   [53]  Also in 2016, the firm invested $2 million in Cardiogram, a digital health company, [54]  and Apeel Sciences, a food science business. [55] 
 In 2017, the firm invested in Sigma, Health IQ, Asimov, and Cadre. [56]   [57]   [58]   [59]   [60] 
 In 2018, the firm raised $300 million for a dedicated cryptocurrency fund. [61]  It has also invested in Imply, Smartcar, PeerStreet, CryptoKitties, Dfinity, Earnin, Pindrop, Tenfold, and Very Good Security. [62]   [63]   [64]   [65]   [66] 
 In 2019 the firm provided $15.3 million in Series A funding to Substack, some of which went to bringing high-profile writers into that network.
 [67]  In June 2019 the firm also invested in a $9.2 million Series A round in AnyRoad, an experiential marketing platform, and David Ulevitch from Andreessen Horowitz joined the AnyRoad board. [68] 
2020[edit]
In 2020, the firm led a $150 million Series G round in Roblox, a social video game platform for children. [69]   [70] 
 In April 2020, the firm led a $50 million Series D round in Figma, a vector graphics editor and prototyping tool. [71] 
 Also in April 2020, the firm raised $515 million for a second cryptocurrency-focused fund. [72] 
 In May 2020, the firm made a $12 million Series A investment in Clubhouse ($10 million in primary capital plus $2 million toward purchasing shares), an audio-chat social networking app valued at nearly $100 million as of December 2020. [73]   [74] 
2021[edit]
In January 2021, the firm led a $100 million Series B for the audio-chat social networking app Clubhouse, reportedly valuing it at $1 billion. [75]  In April 2021, it led a $220 million Series D for mobile banking and fintech company Current.  [76]   [77] 
 In July 2021, the firm led a $100 million Series A for the NFT marketplace OpenSea, reportedly valuing it at $1.5 billion. [78] 
 In September 2021, the firm led an $18 million Series A fundraise in Pearl Health, a healthcare technology company.
 In October 2021, A16z led the round to Raise $150M Series B at $3B Valuation in Vietnamese studio Sky Mavis, the developer of crypto-based online game Axie Infinity. [79]   [80] 
2022[edit]
In March 2022, Andreessen Horowitz led the round to raise $450 million at a $4B Valuation in Yuga Labs. [81]  In October 2022, it was reported that the US Securities and Exchange Commission were investigating Yuga Labs, due to concerns that sales of their digital assess violated US investment laws. [82] 
 In March 2022, the firm led $27 million Series A for the Rutter, a universal API for commerce data. [83] 
 In March 2022, A16z with Lux Capital co-led an $90 million round of Los Angeles-based machine-parts start-up Hadrian Automation. [84] 
 In May 2022, the firm announced the launch of its largest fund to date at $4.5 billion. The fund is set to focus on cryptocurrency and blockchain technologies. The firm stated that $1.5 billion was allocated to seed investments while the remaining $3 billion would be earmarked for venture investments. [85] 
 In August 2022, the firm announced it would be investing about $350 million in Flow, the latest organization begun by WeWork founder Adam Neumann. The purported aim of Flow is to create a branded product in the housing market with consistent community features, reimagining how real estate works in the US.  [86]  The decision was met with some criticism due to Neumann's previous business issues in his time at WeWork.  [87] 
 The firm committed to $400 million in equity investment towards acquisition of Twitter by Elon Musk that completed in October 2022. [88]   [89] 
Structure[edit]
Andreessen Horowitz partners work on behalf of all its portfolio companies, an approach modeled after the Hollywood talent agency, Creative Artists Agency. [90]  In 2010, the company hired Margit Wennmachers, a marketing executive at the partner level. [91] 
 As of 2011, the firm had maintained a database of designers, coders, and executives and used it to help fill positions at its start-ups. [92]  Former U.S. Treasury Secretary Larry Summers became a special advisor to Andreessen Horowitz in June 2011. [93] 
 In September 2012, former Washington D.C. mayor Adrian Fenty was appointed Andreessen Horowitz's second special advisor. [94]  Fenty was hired to advise the firm's portfolio companies on working with local, state, and federal governments. [93] 
 In 2019, the firm applied to restructure as a registered investment adviser in order to have more freedom to take up riskier bets like cryptocurrency. [95]   [96] 
References[edit]
 
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  ^  Kelly, Meghan (October 15, 2011). "Andreessen-Horowitz to give $50K to all Y Combinator startups through Start Fund". Deals. VentureBeat. Retrieved April 19, 2012.
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  ^  Chokkattu, Julian. "uBiome Raises $4.5M From Angel Investors, Andreessen Horowitz To Crowdsource Microbiome Research". TechCrunch. Retrieved May 30, 2016.
  ^  Strauss, Karsten. "Can Pixlee Change Image-Based Marketing? $1.5M On 'Yes'".  Forbes . Retrieved May 30, 2016.
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  ^  Williams, Alex. "PagerDuty Raises $10.7M Round From Andreessen Horowitz For IT Alert Service Modeled On AWS System". TechCrunch. Retrieved August 30, 2016.
  ^  Lorica, Ben (September 25, 2013). "Databricks aims to build next-generation analytic tools for Big Data". O'Reilly Media. Retrieved February 9, 2019.
  ^   "Website Testing Company Optimizely Raises $57M Round Led By Andreessen Horowitz". TechCrunch. May 5, 2014. Retrieved May 17, 2014.
  ^   "Venture Capital Giant Andreesen Horowitz Ploughs $90m into Tanium". InfoSecurity Magazine. June 24, 2014. Retrieved June 24, 2014.
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  ^  Weber, Harrison. "Andreessen Horowitz-backed startup Forward Networks raises $11M". VentureBeat. Retrieved February 12, 2018.
  ^  Dixon, Chris. "A16Z Invests in Stack Exchange". Archived from the original on January 21, 2015. Retrieved January 21, 2015.
  ^  Spolsky, Joel (January 20, 2015). "Andreessen Horowitz Invests in Stack Exchange". stackoverflow.com. Retrieved January 21, 2015.
  ^   "Distelli Snags 2.8M to Build Deployment as a Service". TechCrunch.
  ^  Loizos, Connie. "Onshape Raises $80 Million Led By Andreessen Horowitz". www.techcrunch.com. Retrieved September 30, 2015.
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  ^   "Meraki founders score $25 million from Andreessen Horowitz for sensor startup". www.bizjournals.com. Retrieved November 19, 2019.
  ^  Russell, Jon. "Improbable Lands $20M From Andreessen Horowitz For Distributed Simulation Tech". TechCrunch. Retrieved January 25, 2017.
  ^   "An Ex-Googler Launches An In-Home Care Startup Called Honor And Raises $20 Million",  Tech Crunch , April 2, 2015
  ^   "OpenBazaar is Entering a New Phase with Funding | OpenBazaar Blog". blog.openbazaar.org. Archived from the original on September 28, 2017. Retrieved September 19, 2017.
  ^   "Introducing OB1 – Union Square Ventures". www.usv.com. June 11, 2015. Retrieved September 19, 2017.
  ^   "Andreessen Horowitz to Invest in Nootropics Start-Up",  The New York Times , December 3, 2015
  ^  Loizos, Connie. "This 18-year-old just raised $3.5 million to help developers easily add capabilities to their apps". TechCrunch. Retrieved November 21, 2016.
  ^  Loizos, Connie. "Everlaw Lands $8.1 Million Series A Led By Andreessen Horowitz". TechCrunch. TechCrunch. Retrieved January 19, 2016.
  ^  Lora Kolodny, "Cardiogram raises $2 million to predict heart health issues using wearables," TechCrunch, October 20, 2016.
  ^   "Apeel Sciences raises $33 million to keep your food from going bad". SiliconBeat. December 13, 2016. Retrieved November 19, 2019.
  ^  Lawler, Ryan. "Quixey alums launch Sigma, a platform to bring merits and certifications online". TechCrunch. Retrieved January 25, 2017.
  ^  Loizos, Connie. "Cadre collects $65 million in Series C funding | TechCrunch". Retrieved June 21, 2017.
  ^  Roof, Katie. "Health IQ raises $34.6 million for life insurance for healthy people". TechCrunch. Retrieved December 12, 2017.
  ^   "Andreessen Horowitz leads seed round in MIT-born 'genetic circuits' startup". www.bizjournals.com. Retrieved January 16, 2018.
  ^  Coldewey, Devin. "Bio-programming toolkit maker Asimov launches with $4.7M from Andreessen Horowitz". TechCrunch. Retrieved January 16, 2018.
  ^  Loizos, Connie. "Andreessen Horowitz has a new crypto fund — and its first female general partner is running it with Chris Dixon". TechCrunch. Retrieved March 5, 2019.
  ^  Dorbian, Iris (March 13, 2018). "Imply grabs $13.3 mln Series A in Andreessen Horowitz-led round – PE Hub". PE Hub. Archived from the original on June 15, 2018. Retrieved April 11, 2018.
  ^  Davis, Alexander (March 1, 2018). "A Connected-Car Platform Fuels Its Tank With NEA, Andreessen". Retrieved December 21, 2018.
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  ^  Simpson, Arianna (October 5, 2021). "Investing in Axie Infinity". Andreessen Horowitz.
  ^  Clark, Kate (October 4, 2021). "Andreessen Horowitz Values Developer of NFT Game Axie Infinity at $3 Billion". The Information.
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  ^  Robinson, Matt (October 11, 2022). "Bored-Ape Creator Yuga Labs Faces SEC Probe Over Unregistered Offerings". Bloomberg UK. Retrieved October 13, 2022.
  ^  Hall, Christine (March 15, 2022). "a16z backs Rutter's goal of being 'Plaid for commerce'". TechCrunch.
  ^  Sheetz, Michael (March 31, 2022). "Machine-parts start-up Hadrian raises $90 million as it seeks to shake up the aerospace supply chain". CNBC.
  ^   "Andreessen Horowitz bets on crypto 'golden era' with new $4.5bn fund". Financial Times. May 25, 2022. Retrieved May 25, 2022. {{cite web}}: CS1 maint: url-status (link)
  ^   "Adam Neumann Gets a New Backer". The New York Times. August 15, 2022. Retrieved August 15, 2022. {{cite web}}: CS1 maint: url-status (link)
  ^   "NIMBY Marc Andreessen Gives WeWork's Adam Neumann $350 Million to, Uhh, Solve the Housing Crisis". Vox. August 15, 2022. Retrieved August 15, 2022. {{cite web}}: CS1 maint: url-status (link)
  ^  Jin, Berber (October 25, 2022). "Sequoia Capital's Roelof Botha Predicts Success for Elon Musk at Twitter".  The Wall Street Journal . Archived from the original on October 26, 2022.
  ^  Dwoskin, Elizabeth; Siddiqui, Faiz (October 31, 2022). "Musk's inner circle worked through weekend to cement Twitter layoff plans".  The Washington Post . Archived from the original on October 31, 2022.
  ^  Menn, Joseph (November 3, 2010). "Andreessen expands venture capital business". Financial Times. The Financial Times. Retrieved April 14, 2012.
  ^  Cain Miller, Claire (June 15, 2010). "Andreessen Horowitz Hires a Female Partner". The New York Times. Retrieved April 19, 2012.
  ^   "Disrupting the disrupters". Technology Quarterly: Q3 2011. The Economist. September 3, 2011. Retrieved April 14, 2012.
^    a       b    Fielding, Cortney (June 29, 2011). "Larry Summers to join VC firm Andreessen Horowitz". GigaOM. Retrieved September 28, 2012.
  ^  Tam, Pui-Wing (September 26, 2012). "Andreessen Horowitz's New Political Mover-and-Shaker: Adrian Fenty". The Wall Street Journal. Retrieved September 28, 2012.
  ^  Gaus, Annie (April 2, 2019). "Andreessen Horowitz, Silicon Valley VC Firm, to Refocus on High-Risk Crypto Bets". TheStreet. Retrieved April 3, 2019.
  ^  Konrad, Alex. "Andreessen Horowitz Is Blowing Up The Venture Capital Model (Again)". Forbes. Retrieved April 3, 2019.
 
External links[edit]
  Andreessen-Horowitz web site 
 Frank Chen, Partner at Andreessen Horowitz: 'Are you a mercenary or a missionary?' (04.24.2013)
Andreessen Horowitz - Wikipedia
https://en.wikipedia.org/wiki/Andreessen_Horowitz
https://twitter.com/a16z?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

Tue Aug 11 22:26:28 +0000 2009
a16z?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
<div>we invest in software eating the world 
http://a16z.com/portfolio
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Sign up for our newsletters: https://info.a16z.com/newsletters.html| profile_url: http://www.a16z.com | name: a16z | created_at: Tue Aug 11 22:26:28 +0000 2009 | favourites_count: 8245 | followers_count: 762119 | friends_count: 45 | media_count: 981 | possibly_sensitive: False | verified: False | statuses_count: 23255 | location: The Cloud </div><div>Introducing the AI + a16z podcast.
A new channel to give the full context of the past, present &amp; future of AI with the builders &amp; experts shaping it.
From infrastructure that powers today's foundation models to how tools like LLMs are reshaping industries – join us for weekly… https://t.co/y7udXTYW2h| created_at: Fri Apr 12 16:54:38 +0000 2024 | favorite_count: 122 | quote_count: 3 | reply_count: 44 | retweet_count: 33 | is_quote_status: False | retweeted: False | lang: en </div><div>RT @replicate: Llama 3's out. Try it here: https://t.co/jQdxRbfk7A| created_at: Thu Apr 18 17:13:13 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 22 | is_quote_status: False | retweeted: False | lang: en </div><div>RT @CapeWireless: #Guam is a hotspot for mobile privacy and security issues due to its strategic importance. It is the most acute example o…| created_at: Thu Apr 18 15:55:25 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 6 | is_quote_status: False | retweeted: False | lang: en </div><div>RT @KTmBoyle: Proud we can finally talk about what @JohnDoyleCape and @CapeWireless are building to solve one of the most difficult securit…| created_at: Thu Apr 18 15:26:00 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 12 | is_quote_status: True | retweeted: False | lang: en </div><div>RT @JohnDoyleCape: Proud to announce that @CapeWireless has raised $61M led by @A_StarVC and @a16z to build the privacy-focused mobile serv…| created_at: Thu Apr 18 15:25:52 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 24 | is_quote_status: False | retweeted: False | lang: en </div><div>RT @andrewchen: yesterday we had big news-
a16z raised over $7B in new funds, including GAMES FUND TWO 💪 -- this is the sequel to our dedic…| created_at: Wed Apr 17 18:12:29 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 11 | is_quote_status: False | retweeted: False | lang: en </div>
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Sign up for our newsletters: https://info.a16z.com/newsletters.html| profile_url: http://www.a16z.com | name: a16z | created_at: Tue Aug 11 22:26:28 +0000 2009 | favourites_count: 8245 | followers_count: 762119 | friends_count: 45 | media_count: 981 | possibly_sensitive: False | verified: False | statuses_count: 23255 | location: The Cloud  Introducing the AI + a16z podcast.
A new channel to give the full context of the past, present &amp; future of AI with the builders &amp; experts shaping it.
From infrastructure that powers today's foundation models to how tools like LLMs are reshaping industries – join us for weekly… https://t.co/y7udXTYW2h| created_at: Fri Apr 12 16:54:38 +0000 2024 | favorite_count: 122 | quote_count: 3 | reply_count: 44 | retweet_count: 33 | is_quote_status: False | retweeted: False | lang: en  RT @replicate: Llama 3's out. Try it here: https://t.co/jQdxRbfk7A| created_at: Thu Apr 18 17:13:13 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 22 | is_quote_status: False | retweeted: False | lang: en  RT @CapeWireless: #Guam is a hotspot for mobile privacy and security issues due to its strategic importance. It is the most acute example o…| created_at: Thu Apr 18 15:55:25 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 6 | is_quote_status: False | retweeted: False | lang: en  RT @KTmBoyle: Proud we can finally talk about what @JohnDoyleCape and @CapeWireless are building to solve one of the most difficult securit…| created_at: Thu Apr 18 15:26:00 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 12 | is_quote_status: True | retweeted: False | lang: en  RT @JohnDoyleCape: Proud to announce that @CapeWireless has raised $61M led by @A_StarVC and @a16z to build the privacy-focused mobile serv…| created_at: Thu Apr 18 15:25:52 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 24 | is_quote_status: False | retweeted: False | lang: en  RT @andrewchen: yesterday we had big news-
a16z raised over $7B in new funds, including GAMES FUND TWO 💪 -- this is the sequel to our dedic…| created_at: Wed Apr 17 18:12:29 +0000 2024 | favorite_count: 0 | quote_count: 0 | reply_count: 0 | retweet_count: 11 | is_quote_status: False | retweeted: False | lang: en
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https://www.wsj.com/articles/andreessen-horowitz-plans-to-raise-roughly-6-5-billion-for-new-venture-funds-11635080401
Andreessen Horowitz Plans to Raise Roughly $6.5 Billion for New Venture Funds
2021-10-24
Yuliya Chernova
<div><div>
 
 <p>Andreessen Horowitz is planning to raise roughly $6.5 billion to fuel the global venture-capital firm’s aggressive deal-making pace, according to people familiar with the situation.</p>
 <p>The firm is turning to its limited partners to invest in a pair of funds, one focused on early-stage startups and another on growth-stage companies, the people said. That would add to Andreessen’s haul earlier this year of $2.2 billion for its crypto fund and $400 million for a seed fund. Venture firms typically turn to investors such as foundations, pension funds, corporations, and funds of funds for capital that they then deploy into technology startups.</p>
 <div> <p>Andreessen is seeking roughly $4.5 billion for its third growth fund, and about $2 billion for its eighth main early-stage fund, the people familiar with the matter said. The firm didn’t set a hard cap for its new funds, which means that investor demand could push the new fundraising even higher, one of the people said.</p>
 <p>Andreessen couldn’t be reached for comment.</p>
 
 <p>Andreessen’s latest fundraising speaks to the <a href="https://www.wsj.com/articles/venture-returns-keep-climbing-mystifying-some-industry-veterans-11634554801?mod=article_inline">acceleration and growth in the venture market</a> overall. Investments in startups are getting larger and more deals are being made, so venture funds are looking to procure capital at a faster pace. </p>
 <p>Venture funds raised roughly $96 billion through September end, according to the latest PitchBook-NVCA Venture Monitor report. That is above the $85.8 billion raised in 2020 and roughly double the $50.1 billion procured five years ago. There also are more funds trying to raise capital this year. Globally, the number of venture funds in the market in August was up 40% since January, according to research firm Preqin Ltd.</p>
 <p>For Andreessen, a Menlo Park, Calif.-based firm founded in 2009 by
 
 Marc Andreessen
 and
 
 Ben Horowitz,
 the new capital raise would cap off a mega year. The firm already has raised $2.6 billion in new funds, and saw blockbuster initial public offerings of portfolio companies, including
 Coinbase Inc.,
 Robinhood Markets Inc.,
 Roblox Corp.
 and
 Affirm Holdings Inc.
 Some portfolio companies such as Stack Overflow were <a href="https://www.wsj.com/articles/software-developer-community-stack-overflow-sold-to-tech-giant-prosus-for-1-8-billion-11622648400?mod=article_inline">acquired</a>.</p>
 <p>Andreessen was ranked among the top 10 most active global-venture investors in the second and third quarters of this year, according to CB Insights. The firm participated in 194 investment deals so far this year, according to PitchBook Data Inc., up from 114 in 2020.</p>
 <p>The venture firm has largely deployed its previous $3.2 billion second growth fund, raised last year, according to one of the people. The growth fund invests in later stages of startups across all industries, the firm said. At that time the firm also raised a $1.3 billion main fund, which is being invested in early-stage consumer, enterprise, and financial-services technology startups.</p>
 <p>Andreessen employs 70 people on its investment team and more than 200 in operations, marketing and other roles, according to its website.</p>
 <p><strong>Write to </strong>Yuliya Chernova at <a href="mailto:yuliya.chernova@wsj.com">yuliya.chernova@wsj.com</a></p>
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 https://www.wsj.com/articles/andreessen-horowitz-plans-to-raise-roughly-6-5-billion-for-new-venture-funds-11635080401

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 Andreessen Horowitz Plans to Raise Roughly $6.5 Billion for New Venture Funds

 Silicon Valley firm raised $2.2 billion for a crypto fund and $400 million for a seed fund earlier this year

 Roblox was among Andreessen Horowitz’s portfolio companies that went public this year. Roblox listed on the New York Stock Exchange in March.

 Photo: brendan mcdermid/Reuters

 By
 Yuliya Chernova
 Oct. 24, 2021 9:00 am ET | WSJ Pro

 Andreessen Horowitz is planning to raise roughly $6.5 billion to fuel the global venture-capital firm’s aggressive deal-making pace, according to people familiar with the situation.

 The firm is turning to its limited partners to invest in a pair of funds, one focused on early-stage startups and another on growth-stage companies, the people said. That would add to Andreessen’s haul earlier this year of $2.2 billion for its crypto fund and $400 million for a seed fund. Venture firms typically turn to investors such as foundations, pension funds, corporations, and funds of funds for capital that they then deploy into technology startups.

 Andreessen is seeking roughly $4.5 billion for its third growth fund, and about $2 billion for its eighth main early-stage fund, the people familiar with the matter said. The firm didn’t set a hard cap for its new funds, which means that investor demand could push the new fundraising even higher, one of the people said.

 Andreessen couldn’t be reached for comment.

 Andreessen’s latest fundraising speaks to the acceleration and growth in the venture market overall. Investments in startups are getting larger and more deals are being made, so venture funds are looking to procure capital at a faster pace.

 Venture funds raised roughly $96 billion through September end, according to the latest PitchBook-NVCA Venture Monitor report. That is above the $85.8 billion raised in 2020 and roughly double the $50.1 billion procured five years ago. There also are more funds trying to raise capital this year. Globally, the number of venture funds in the market in August was up 40% since January, according to research firm Preqin Ltd.

 For Andreessen, a Menlo Park, Calif.-based firm founded in 2009 by Marc Andreessen and Ben Horowitz, the new capital raise would cap off a mega year. The firm already has raised $2.6 billion in new funds, and saw blockbuster initial public offerings of portfolio companies, including Coinbase Inc., Robinhood Markets Inc., Roblox Corp. and Affirm Holdings Inc. Some portfolio companies such as Stack Overflow were acquired.

 Andreessen was ranked among the top 10 most active global-venture investors in the second and third quarters of this year, according to CB Insights. The firm participated in 194 investment deals so far this year, according to PitchBook Data Inc., up from 114 in 2020.

 The venture firm has largely deployed its previous $3.2 billion second growth fund, raised last year, according to one of the people. The growth fund invests in later stages of startups across all industries, the firm said. At that time the firm also raised a $1.3 billion main fund, which is being invested in early-stage consumer, enterprise, and financial-services technology startups.

 Andreessen employs 70 people on its investment team and more than 200 in operations, marketing and other roles, according to its website.

 Write to Yuliya Chernova at yuliya.chernova@wsj.com

 Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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 Venture firm Andreessen Horowitz is reaching out to investors again, after having raised $2.6 billion earlier this year.

 Silicon Valley firm raised $2.2 billion for a crypto fund and $400 million for a seed fund earlier this year

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Andreessen Horowitz is planning to raise roughly $6.5 billion to fuel the global venture-capital firm’s aggressive deal-making pace, according to people familiar with the situation.
 The firm is turning to its limited partners to invest in a pair of funds, one focused on early-stage startups and another on growth-stage companies, the people said. That would add to Andreessen’s haul earlier this year of $2.2 billion for its crypto fund and $400 million for a seed fund. Venture firms typically turn to investors such as foundations, pension funds, corporations, and funds of funds for capital that they then deploy into technology startups.
  Andreessen is seeking roughly $4.5 billion for its third growth fund, and about $2 billion for its eighth main early-stage fund, the people familiar with the matter said. The firm didn’t set a hard cap for its new funds, which means that investor demand could push the new fundraising even higher, one of the people said.
 Andreessen couldn’t be reached for comment.
 
 Andreessen’s latest fundraising speaks to the acceleration and growth in the venture market overall. Investments in startups are getting larger and more deals are being made, so venture funds are looking to procure capital at a faster pace. 
 Venture funds raised roughly $96 billion through September end, according to the latest PitchBook-NVCA Venture Monitor report. That is above the $85.8 billion raised in 2020 and roughly double the $50.1 billion procured five years ago. There also are more funds trying to raise capital this year. Globally, the number of venture funds in the market in August was up 40% since January, according to research firm Preqin Ltd.
 For Andreessen, a Menlo Park, Calif.-based firm founded in 2009 by
 
 Marc Andreessen
 and
 
 Ben Horowitz,
 the new capital raise would cap off a mega year. The firm already has raised $2.6 billion in new funds, and saw blockbuster initial public offerings of portfolio companies, including
 Coinbase Inc.,
 Robinhood Markets Inc.,
 Roblox Corp.
 and
 Affirm Holdings Inc.
 Some portfolio companies such as Stack Overflow were acquired.
 Andreessen was ranked among the top 10 most active global-venture investors in the second and third quarters of this year, according to CB Insights. The firm participated in 194 investment deals so far this year, according to PitchBook Data Inc., up from 114 in 2020.
 The venture firm has largely deployed its previous $3.2 billion second growth fund, raised last year, according to one of the people. The growth fund invests in later stages of startups across all industries, the firm said. At that time the firm also raised a $1.3 billion main fund, which is being invested in early-stage consumer, enterprise, and financial-services technology startups.
 Andreessen employs 70 people on its investment team and more than 200 in operations, marketing and other roles, according to its website.
  Write to Yuliya Chernova at yuliya.chernova@wsj.com 
 
 Copyright ©2022 Dow Jones &amp; Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Andreessen Horowitz Plans to Raise Roughly $6.5 Billion for New Venture Funds
https://www.wsj.com/articles/andreessen-horowitz-plans-to-raise-roughly-6-5-billion-for-new-venture-funds-11635080401