Andreessen Horowitz has raised another $650 million for its investment fund, the firm announced yesterday. The firm is just shy of 18 months old, started in June of 2009 as a joint venture between Ben Horowitz and Marc Andreessen. The initial fund was $300 million, which the firm has used to make investments in a number of prominent companies, including Foursquare and Zynga.
The size and the speed with which the firm raised this second round - in under three weeks - points to the momentum, and more importantly, the respect with which the firm is seen. But even so, with swirling controversies around what the future of investing will look like - seed, angel, and VC alike - it's not surprising that Horowitz has taken to his blog to explain some of the questions people may have about the "why's."
Why So Much Money? Countering the argument that "smaller is better," Horowitz contends that the investment firm is less concerned with the stages of funding and more with the companies themselves. "We believe in great entrepreneurs and the products and companies they build. We do not focus on specific return profiles for various stages of investment."
Why Stop at $650 Million? Horowitz says that the firm does not want the size of the fund to become so unwieldy that the quality of investments is lowered simply to "put the money to work."
Why Not Separate Growth and Venture Funds? Reiterating that the investment philosophy is about the companies themselves, not their stage of investment, Horowitz says that "we do not want to attempt to predetermine where the good investments will be. In our experience, the quality of companies in each investment stage varies wildly over time. It's possible that the right strategy for this fund will be to invest $550M in venture, $50M in seed, and $50M in growth. It may also be the case that $400M in growth, $150M in venture, and $100M in seed is the right mix. One thing is certain; we won't know until we see the companies."
Horowitz makes it clear that the firm's commitment is to have general partners who can offer companies support, no matter their stage of development. And it's this advice around company growth, CEO skill development, and going public that Andreessen Horowitz also bring to the table.
"We are now prepared to be a major investor in the very best companies," Horowitz ends his post. "If you believe that you are building one of those, we can't wait to meet you. And that's regardless of stage."