Primack: If you just heard a choking sound, it’s probably coming from your own throat (or that of your closest LP).
What I mean is that $250 million is an extraordinary amount of capital for a first-time, early-stage fund. Andreessen said in February that initial investments would average just $500,000 (a fivefold increase from the $100k that he and Horowitz currently invest out of their own pockets). That would work out to more than 100 portfolio companies, even if you assume that the fund would quadruple-down on every investment (which it won’t).
Andreessen and Horowitz plan to thin the bloated portfolio size by complimenting their seed deals with a handful of $5 million-ish Series A plays, but I’d think the firm would really need to average $10 million per company to make things manageable.
Business Insider Emails & Alerts
Site highlights each day to your inbox.