Marc Andreessen, co-founder of Andreessen Horowitz, has also invested in various startups and funds as a private investor.
According to multiple sources, Silicon Valley’s most prominent venture capital (VC), Andreessen Horowitz (commonly known as A16z), hasFund of funds specializing in early stage investments(a fund that invests in other funds) is being discussed.
The aim of A16z is to provide funding to solo capitalists (individual venture investors) and emerging funds to encourage access to and support for promising young startups in which they invest.An attempt to be the first to “lock-on” a leading startup with the potential to become big in the futureis.
In recent months, A16z has started pitching money to up-and-coming fund managers at events in San Francisco and Los Angeles, according to three people familiar with the fund’s plans.
In June, he plans to host a networking event with solo capitalists and emerging funds at his office in the heart of San Francisco’s South of Markets district.
A spokesperson for A16z declined to comment when contacted by Insider.
It remains to be seen whether A16z will seek to raise new capital from its limited partners (limited liability investors who invest in the fund) or whether it will raise funds from its own partners to form a fund of funds. not clear.
In the case of A16z, some members, such as Chris Dixon, the company’s general partner, invest in other funds as individuals.
According to investor interviews and official announcements, Marc Andreessen, co-founder and general partner, has also invested in Lucy Guo’s Backend Capital, Packy McCormick’s Not Boring Capital, He has personally invested in over 20 funds and VCs, including Ryan Hoover’s Weekend Fund.
Andreessen’s personal investment portfolio includes a number of funds launched by A16z alumni such as Zal Vilimoria, Li Jin and Kathryn Hahn.
If these individual investments are integrated into a fund of funds, A16z will be able to gain a foothold in establishing new funds, and at the seed stage before competition with other VCs intensifies, it will become a startup on the verge of breaking. You can go deep.
“People want deal flow,” said one solo capitalist who has no stake in A16z.
A16z hopes to capture deals by investing in both startups and venture funds, like peers such as Bain Capital, Insight Partners and Foundation Capital. , speculates the solo capitalist.
Partners at crossover fund Tiger Global (which invests in both public and private companies) have tried a similar strategy in recent years, investing $1 billion in early-stage ventures. I invested in a lot of funds.
However, as the investment environment for startups cooled in 2022, Tiger Global withdrew from its early-stage investment strategy and began selling its stake in the fund.
Tiger Global withdrew from providing funding to emerging funds because of conflicts with existing limited partners who were concerned that they would be forced out of the project due to the company’s investment participation, and due to the economic slowdown. This is due to growing concerns.
A16z is strengthening its alternative strategy
A16z’s plan to establish a fund of funds comes out of a move to go beyond the traditional business framework of a VC.
In 2019, the company was officially registered as an investment adviser (RIA) under the Investment Advisers Act, allowing it to devote a larger portion of its capital to non-traditional (alternative) strategies such as investing in other funds and issuing bonds. It became possible.
Recently, in this vein, he established an asset management division that handles the enormous assets of entrepreneurs that A16z has invested in, and served as chief investment (CIO) at the Jordan Park Group, an American asset management company. He has pulled out Michael Del Buono, who has been in the business for a long time, and has appointed him to the top position.
The fund of funds, which A16z is planning to establish, is not the first time A16z has targeted early-stage investment in promising young entrepreneurs.
In 2022, the company announced START, an accelerator program that will invest up to $1 million in early stage startups.
According to the company’s website, the program has been greeted with “overwhelming interest” from a number of startups and is no longer accepting new applications.
A16z, which was a latecomer in Silicon Valley but has achieved rapid growth as a leading VC, has demonstrated its presence by launching funds specializing in areas such as crypto assets (virtual currencies) and life sciences, which are not very common among other VCs. rice field.
Is it possible to demonstrate a presence in the new field of funds of funds, which is not in the traditional VC business model? The entire VC industry is watching the move closely.
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(Translated by Hiroshi Tahara, edited by Chikara Kawamura)
Source: BusinessInsider
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