More than ever before, venture capitalists are digging in. To stay competitive and top-of-mind, VC’s are no longer loaning their advice and their capital, but actual “core” services that portfolio companies need. This shift isn’t necessarily new. For example, top VC firms like Kleiner Perkins and Greylock play a hands-on role in helping recruit talent. Recently, we’ve seen firms roll up their sleeves for another core competency: public relations.
More often, I’ll be pitched on a story on a startup by the in-house PR rep for an investment firm that has invested in the said startup. Traditionally, either the startup or an outside PR agency tends to do the outreach when it comes to launches, trend pieces, financings or other news items. And the rise in pitches from the VC firms themselves (as opposed to the startups) got me thinking about the evolution of the role of the VC, specifically in the context of PR. But in the past year or so, we’ve seen a rise in the addition of top PR and communications talent to these firms, specifically to help work with portfolio companies on PR strategy.
Last week, we heard from Evelyn Rusli at the New York Times that Andreessen Horowitz was in the process of raising $1.5 billion for the venture firm. Today, partner Ben Horowitz has confirmed that the fund has closed, bringing Andreessen Horowitz’s total funding under management to $2.7 billion.
The firm says that the $1.5 billion was raised for its Fund III. “a16z’s Fund III is all about extending our capabilities to more disruptors and pioneers,” said Horowitz in a release. “We’re remaking the modern venture capital firm, and entrepreneurs are responding to our unique approach.”
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Venture capital firm Battery Ventures this morning announced that it has made an investment in Continuuity, a stealth ‘big data’ startup founded by Battery entrepreneur-in-residence Todd Papaioannou (formerly VP and Chief Cloud Architect for Yahoo). → Read More
Virtualization data management software maker Actifio has raised $33.5 million in a Series C financing round led by Andreessen Horowitz, with previous backers North Bridge Venture Partners, Greylock Partners and Advanced Technology Ventures participating.
Founded in 2010, the startup has secured a total of $57.5 million in venture capital funding to date. → Read More
Silicon Valley VC firm Andreessen Horowitz is raising a third fund to the tune of $900 million, an unpaid blogger by the name of Michael Arrington reports. If the information checks out, the firm’s Fund III will be triple the size of its first fund, raised a little over two years ago.
Andreessen Horowitz has been very busy for such a young firm, but it’s hard to imagine that they didn’t see a heck of lot of deal-flow from day one, considering the networks and clout of its founding partners ( MarcAndreessen and Ben Horowitz). → Read More
Today, at the Web 2.0 Summit, Ben Horowitz, the former co-founder and CEO of Opsware and founding partner of well-known venture capital firm, Andreessen Horowitz, took to the stage today to speak to John Heilemann of New York Magazine. Horowitz spoke to his history with his founding partner as well as what the two tech veterans look for in the companies they invest in and mentor.
Interestingly, at the end of the talk, Heilemann played a word association game with Horowitz, asking him what he thought about Facebook (among other big tech companies). Horowitz said frankly that he thought the social networking giant is the best run company in Silicon Valley — and the tech industry. → Read More
Silver Tail Systems, a provider of predictive analytics for detection and prevention of online fraud, this morning announced that it has secured an additional round of funding from Citi Ventures, a unit of Citigroup.
This investment, the size of which was not disclosed, is part of a previously announced $20 million Series B funding round led by Andreessen Horowitz (closed in June). → Read More
A group of former Mercury Interactive executives are behind a new Israeli-based startup called Capriza, which is still in stealth mode. But the company is in the process of raising $10.5 million from Andreessen Horowitz and another investor to bring corporate IT onto smartphones and tablets (with $2.5 million of that still outstanding).
The founding team consists of CEO Yuval Scarlat (former senior VP of products at Mercury Interactive), chairman Amnon Landan (former chairman and CEO of Mercury Interactive), Oren Ariel (former CTO of Mercury Interactive), and Ronnen Armon (former VP R&D). Mercury Interactive was a provider of enterprise IT optimization software which was bought by Hewlett-Packard for $4.5 billion in 2006. It was later caught up in the SEC’s crackdown on backdated options (Landan was specifically called out in that affair). The litigation was settled, and Mercury is still part of HP’s enterprise software group. → Read More
My, what big eyes you have Jawbone! It hasn’t even been four months since the consumer electronics company closed its $49 million in funding from Andreessen Horowitz and already it’s making funding news again.
Jawbone has raised another round of growth funding, this time it’s $70 million from a group of unnamed investors advised by JP Morgan Asset Management. This brings the total raised so far to $170 million.
Is there RedBull in the water over at Jawbone? → Read More
Andreessen Horowitz is announcing today that economist, former US Treasury Secretary and former President of Harvard Larry Summers is joining the firm as a special advisor.
Beyond his well known academic and political credentials, Marc Andreessen was quick to point out that Summers has nerd cred too: He was admitted at MIT at the age of 16 to study physics. → Read More
Foursquare has just closed one of the most secretive rounds of venture capital TechCrunch has seen.
The company is raising $50 million, and all of it will go towards building out the company, no secondary sales here. The valuation had been rumored to be as high as $1 billion, but our sources say it settled out at $550 million pre-money, $600 million post. → Read More
Love photos but utterly bored by wave after wave of iPhone photo sharing apps? Lytro is the company for you. This is also the company for anyone who thinks Silicon Valley has fallen into a rut of innovation-less posing. And it’s the company for anyone who complains that the Valley is more about media and marketing than brass-knuckles, hardcore technology. This is the company that jaded, cranky, rap-lyric quoting investor Ben Horowitz says, “blew my brains to bits.” → Read More
According to several sources Airbnb is in the process of closing a whopper of a funding round: $100 million or more at a $1 billion-plus valuation. The round is being lead by Andreessen Horowitz, and includes participation from DST, say our sources.
That’s a big increase from the company’s last funding round of $7.2 million, which included Sequoia Capital, Greylock, SV Angel, Ashton Kutcher and Youniversity Ventures (Kutcher broke the news that he’s an investor in AirBnB at TechCrunch Disrupt last week). The company, which launched via Y Combinator, has raised just $7.8 million to date.
No surprise, it was a hotly contested deal. The service has exploded, growing more than 800% last year and booking 1.6 million night stays in other people’s homes to date. On any given night in New York there are more people staying in homes via Airbnb than there are rooms in the biggest hotel in Manhattan. → Read More
I guess $1 billion under management just wasn’t enough. Andreessen Horowitz has just announced a new growth fund of $200 million. The fund with co-invest alongside the firm’s most recent $650 million fund, providing more capital for the kinds of late stage deals that have been raging in the Valley of late. (Check out our three part series on the trend here, here and here.)
That “co-invest” part is makes this announcement very different from other firms’ late stage funds, says general partner John O’Farrell. “This is not Fund III. This is a completely discretionary fund that gives us more firepower to invest in great high-quality, high-growth companies along with Fund II, but there is no obligation to do so,” he says. In other words, the firm may invest all of the $200 million, none of it or somewhere in between. At the end of Fund II, it goes away no matter how much is left.
And this may be the biggest distinction from other growth funds: Andressen Horowitz is not charging investors any management fees associated with this fund. → Read More
“It’s fucked up when your mind’s playin’ tricks on ya” —The Geto Boys
By far the most difficult skill for me to learn as CEO was the ability to manage my own psychology. Organizational design, process design, metrics, hiring and firing were all relatively straightforward skills to master compared to keeping my mind in check. Over the years, I’ve spoken to hundreds of CEOs all with the same experience. Nonetheless, very few people talk about it, and I have never read anything on the topic. It’s like the fight club of management: The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown. → Read More
Editor’s Note: This is part two in an in-depth series exploring the ramifications of the explosion of late stage capital being raised by the Valley’s elite venture firms. For part one, go here.
In the mid-2000s when nearly every top venture capital firm was expanding to India and China, Benchmark Capital did not share its peers’ worldly ambitions. In fact, while the firm retained its Israel fund (for now?), it spun off the top performing UK fund Balderton Capital and retrained its focus firmly on the US.
Earlier this year, when early stage investors were losing deals at the hands of the super angels and firm-after-firm launched aggressive seed investing programs, Benchmark Capital did not. It refused to compete with the Ron Conways and Mike Maples of the world; it would wait its turn and invest later.
And now – as Benchmark’s early stage peers are raising $1 billion growth funds and throwing huge sums of money at established companies like Facebook, Zynga and Groupon – once again, Benchmark Capital is refusing to follow suit. → Read More
Venture firm Andreessen Horowitz continues its expansion today, bringing on former Veritas and Citrix Exec Peter Levine as a venture partner. Most recently, the firm added entrepreneur Scott Weiss as general partner. With Levine, Andreessen Horowitz, which is just shy of $1 billion under management, gets a seasoned executive in the areas of virtualization and data storage.
As a venture partner, Levine’s role will include most of a the activities of a general partner (i.e., joining boards, working with entrepreneurs, driving deal flow, full access to the Andreessen Horowitz network) but not necessarily with a full-time commitment. Levine also lectures at MIT’s Sloan School of Management and will continue to serve as senior vice president of Strategic Development at Citrix. → Read More
In Silicon Valley it’s not just who you invest in that matters– it’s also when you invest in them. The earlier the investment, the riskier the bet. But the more jawdropping the returns if the company hits it big. It’s so lopsided, that typically just 5% of those unsure early bets create some 95% of the entire venture industry’s returns. Miss one of them, and it haunts you for years. Snag it, and you can brag for even longer. This simple reality is precisely what makes the venture business hard, and the justification for why partners make such huge fees.
So what’s up with the surge of the strongest early stage firms jumping so heavily into late stage mega-deal fray? Have the Valley’s superstars lost sight of these rules or are the rules changing?
Earlier this year, we wrote a lot about the shift in power at the early stages with the rise of super angels, but you could argue there are far greater ripple effects to this new late stage frenzy. That’s not only true for the Valley, it’s true for the stock market. And you could argue, those ripple effects are less well-understood. → Read More
Jawbone, the company most known for its headsets seen on the terminally hip kid to your left, has raised $49 million from Andreessen Horowitz to continue to build new devices to take advantage of the smart phone/mobile Web boom. Marc Andreessen and Ben Horowitz invested in Jawbone as angel investors back in 2007, and CEO Hosain Rahman credits Horowitz as one of his most important mentors. Finally, he’ll be on Jawbone’s board.
This round brings Jawbone’s capital raised to date to just under $100 million. That’s a lot of money. But I’m actually surprised they hadn’t raised more. The biggest reason VCs give for not backing more consumer electronics companies is how capital intensive they are, compared to lean and mean Web companies. But getting to a point where you sell 10 million devices in three years doesn’t sound capital intensive– especially when you consider the mega rounds it’s taking to scale the biggest consumer Web names. → Read More
This week’s Ask a VC has a different twist, since we had a different kind of VC on the show, John O’Farrell Andressen Horowitz’s guru on business development and deal-making.
The questions you asked O’Farrell are below. As usual, feel free to watch the whole show or use the links to skip ahead to your question.
“Have you ever invested in a single employee startup? Would this be a situation in which you guys would make a deal?” → Read More
