Photo: Bloomberg Television
Marc Andreessen is the founding partner of Silicon Valley’s hottest VC firm right now. But even he has regrets.The biggest one?
Missing his chance to invest in Square, the payment company founded by Twitter cofounder Jack Dorsey.
Square makes devices that let anybody — small mum-and-pop businesses, food trucks, even individuals — take credit cards. It’s been around less than two years, and is already processing more than $11 million worth of payments every day.
Speaking on Bloomberg Television today, Andreessen explained:
The biggest one that we’re still kicking ourselves over is probably Square. I think Jack Dorsey is one of the most phenomenal founder-CEO’s in the industry and we probably made a huge mistake on that one when he first came in. We overthought the deal and we probably just should have said Jack Dorsey, check. And write the check. That’s probably the big one.
Andreessen also had some interesting things to say about the IPO market. Regarding Zynga and Groupon:
I think in general the better they do, the more tech IPOs there will be…The really interesting thing in the last five years is there’s now this completely parallel capital ecosystem on the private side. So you’ve got these companies, including actually Groupon and Zynga, that are able to be extremely well financed without actually going public or before going public. In some cases now you have companies raising billions of dollars of equity capital on the private side. And in fact, even doing secondaries and even doing tender offers for their early employees to get a certain amount of liquidity without actually going public. So the IPO is actually not as critical as it used to be for a lot of these new companies.
He also thinks that Facebook is NOT going to suck up all the IPO cash available:
What I would say in general is if you just look at the capital markets there’s a huge amount of cash on the sidelines. There’s been a huge flight to quality in the capital markets over the past five years. You know a tremendous amount of wealth both institutional and individual sitting on the sidelines in the form of cash or gold. Warren Buffett’s least favourite investment. You know at some point that cash needs to get deployed into productive assets. At some point that cash needs to come into places like the stock market and so that’s just a macroeconomic phenomenon. I think there’s a huge amount of cash available. I think if the Valley can create a whole series of new important growth companies then I think there will be no problem having those companies be financed, including on the public market.
Here’s the full interview: