Photo: Bloomberg Television
Don’t look now, but Silicon Valley’s most powerful VC Marc Andreessen is back on Quora, answering questions.Recent highlights:
Q: Do venture capitalists put their own money in their investments?
Andreessen: It is typical, and typically required, for every GP in a venture capital firm to have some amount of money invested in each fund.
In addition, different venture capital firms have different policies on whether GPs are allowed to personally invest (side by side with their firm) in a startup that their firm is funding. Also, different firms have different policies on whether GPs can invest in startups in which their firm is not investing (sometimes called “cherry-picking”).
In our case, we chose to implement a blanket policy that our GPs are not allowed to make direct personal private technology investments, whether side by side with our firm or otherwise. We felt like that was an LP-friendly thing to do since it eliminated any risk that our LPs wouldn’t benefit from investment opportunities that we see. We also chose to make our own investments in our own funds subject to the same fees and carry that our LPs pay
Q: With Andreessen Horowitz investing in Instagram’s Seed Funding and Marc Andreessen standing on Facebook’s board, is Facebook’s acquisition of Instagram a conflict of interest?
Andreessen: Let’s please get over the “AH snubbed Instagram” thing that pops up on Quora every now and then :-). We seed funded Burbn and Picplz (Mixed Media Labs) at about the same time. At that time they were not competitive. Burbn then (very successfully) pivoted into becoming Instagram. They both came up for venture funding. We could only fund one so we funded the one that hadn’t pivoted. We are very proud of both entrepreneurs and their accomplishments!
And yes, due to AH’s stake in Instagram (which we held), I was not involved in Facebook’s acquisition in any way.
Q: What’s Marc Andreessen like in person?
Andreessen: I hear he’s a massive pain in the butt.
Q: How frequently does Andreessen-Horowitz invest in seed rounds?
Andreessen: I think the number is roughly three seed investments a month right now. It varies a lot based on the opportunity set, though.