Marc Andreessen and business partner Ben Horowitz launched a boutique VC fund Monday with an initial capitalization of $300 million that the pair intends to invest in "anything that involves chips and computers" at a clip of $50,000 to $50 million per startup.
The firm, Andreessen / Horowitz, makes a business of what has been a consuming private enterprise of the two, who have made angel investments all over Silicon Alley. While the money they have at their disposal now is considerably more than they had as lone private investors their approach will remain essentially the same, Andreessen and Horowitz told Wired at a recent briefing. That is to say, they they won't invest in anything they don't understand, period. This includes a lot of "cool stuff," the eternally-boyish Andreessen explains, like clean and nano technology.
If you get to make a pitch a decision won't be long in coming because it's only the two partners deciding. But don't bother to cold e-mail them with your Google-killing idea. You need an invitation to this party — a referral from somebody you both know and that they respect. This rule, however — more bean-counter than dreamer-friendly — is pretty much disposed of almost as quickly as it is enunciated. "We'll probably read the e-mail," they say, shrugging and shooting each other a look after a moment's reflection.
Andreessen, a co-founder of Netscape, knows a thing or two about what young, inexperienced, brainstorming whiz kids might face in the big bad world. Netscape's appearance in the mid-1990s is considered the internet's Big Bang. Netscape served up the first eye-popping IPO of what was to become the dot-com boom and at one point its eponymous browser had 90% of the market. Netscape itself was based on Mosaic, the first graphical web browser, developed in 1993 by Andreessen and Eric Bina at the National Center for Supercomputing Applications at the University of Illinois at Urbana-Champaign.
Netscape Inc.'s equally spectacular demise at the hands of Microsoft during the brutal "browser wars" battered Andreessen but made him wiser (is it only coincidence that he says his favorite movie is "Bambi Meets Godzilla?). This is why, entrepreneur wannabe, you want to come to them: "Because we are you," Andreessen says.
Andreessen and Horowitz, who have privately invested in such familiar ventures as Facebook, Digg, LinkedIn and Twitter, clearly relish the small-is-the-new-black aspect of their lean operation. Andreessen hopes his new shop will be "almost a throwback" to the small, focussed venture capital firms that seeded Silicon Valley in its earliest days.
Andreessen, a classic mile-a-minute speaker, paces himself as he describes Twitter as both an object lesson in the art of entrepreneurship and the technique of investment.
"Twitter was timed right: Two years earlier, or later, and it would have been a failure," he says. "This is what our problem was 15 years ago (with Netscape). But now, if we believe in the thesis, we can invest now in this one, and again in two two years on that one, and again two years later."
So, time to find that friend of a friend who knows Ben and/or Marc. Or, roll the dice with that perfect elevator pitch to two strangers who have been there.
