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How Andreessen Horowitz Is Disrupting Silicon Valley

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Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#11

Post by jeffreyrogers »

jmduke wrote: post #6

I'll be honest -- my first impression after reading this piece was to research Peter Sims and figure out his connection to a16z, since my gut reaction was that blatant puff pieces usually have some sort of connection hidden below the surface. (I was unable to find anything.) Sims brings up the following point about VC returns: > The predominant old way of thinking about venture capital is that you: a) build up a grea…

I have data that compares other VC firms to the S&P 500. Give me a few minutes and I'll find it. Foreshadowing: it's pretty bad, you'd do much better putting your money in an index of the S&P 500.

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#13

Post by jeffreyrogers »

nrao123 wrote: post #3

AH is doing some remarkable stuff. 1) Like any great knowledge based firm - which strives to differentiate over and above its people - they have invested in tools. While the inspiration maybe CAA, firms like Mckinsey (knowledge management system) and Goldman (SecDB / Slang on the trading side and a detailed CRM system for the banking side) used the software / infra layer to develop a sustainable advantage which did n…

Right, but the real question is: what are their returns? (And: how do they compare to VC as a whole?, how do they compare to long-term US treasury bonds?, how do they compare to the S&P 500?

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#14

Post by jeffreyrogers »

jeffreyrogers wrote: post #11
jmduke wrote: post #6

I'll be honest -- my first impression after reading this piece was to research Peter Sims and figure out his connection to a16z, since my gut reaction was that blatant puff pieces usually have some sort of connection hidden below the surface. (I was unable to find anything.) Sims brings up the following point about VC returns: > The predominant old way of thinking about venture capital is that you: a) build up a grea…

I have data that compares other VC firms to the S&P 500. Give me a few minutes and I'll find it. Foreshadowing: it's pretty bad, you'd do much better putting your money in an index of the S&P 500.

Found it: http://www.kauffman.org/~/media/kauffman_org/research%20repo...

The title is "We Have Met The Enemy...And He Is Us": Lessons from 20 years of the Kauffman Foundation’s Investments in Venture Capital Funds.

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#16

Post by rattray »

I wasn't aware of all the great stuff AH is doing. It looks impressive.

They're not the only VC firm innovating, though. First Round Capital, for example, also has a terrific recruiting division (I know this is common at other firms as well). FRC also created the Dorm Room Fund[0], which invests small amounts in student-run companies and gives them access to FRC resources. FRC has an internal "platform team", developing technology to enable knowledge sharing between portfolio firms. In short, they work hard and do new things to help entrepreneurs succeed.

I'm speaking about First Round because I have direct experience with them, but I'm sure the same is true of some of the other VC's as well.

[0] dormroomfund.com - disclaimer, my former startup received funding from them.

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#17

Post by jgalt212 »

jeffreyrogers wrote: post #13
nrao123 wrote: post #3

AH is doing some remarkable stuff. 1) Like any great knowledge based firm - which strives to differentiate over and above its people - they have invested in tools. While the inspiration maybe CAA, firms like Mckinsey (knowledge management system) and Goldman (SecDB / Slang on the trading side and a detailed CRM system for the banking side) used the software / infra layer to develop a sustainable advantage which did n…

Right, but the real question is: what are their returns? (And: how do they compare to VC as a whole?, how do they compare to long-term US treasury bonds?, how do they compare to the S&P 500?

Amen to that. What these guys do best, or seem to focus most of their energies on is PR.

If they're so great, please show us some returns vis a your competitors and other asset classed with similar risk profiles.

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#18

Post by ironchef »

jeffreyrogers wrote: post #13
nrao123 wrote: post #3

AH is doing some remarkable stuff. 1) Like any great knowledge based firm - which strives to differentiate over and above its people - they have invested in tools. While the inspiration maybe CAA, firms like Mckinsey (knowledge management system) and Goldman (SecDB / Slang on the trading side and a detailed CRM system for the banking side) used the software / infra layer to develop a sustainable advantage which did n…

Right, but the real question is: what are their returns? (And: how do they compare to VC as a whole?, how do they compare to long-term US treasury bonds?, how do they compare to the S&P 500?

Don't have the most recent numbers but http://fortune.com/2012/07/24/nice-ira-andreessen-horowitz-r... It would seem they've done quite well.

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#19

Post by badclient »

jeffreyrogers wrote: post #13
nrao123 wrote: post #3

AH is doing some remarkable stuff. 1) Like any great knowledge based firm - which strives to differentiate over and above its people - they have invested in tools. While the inspiration maybe CAA, firms like Mckinsey (knowledge management system) and Goldman (SecDB / Slang on the trading side and a detailed CRM system for the banking side) used the software / infra layer to develop a sustainable advantage which did n…

Right, but the real question is: what are their returns? (And: how do they compare to VC as a whole?, how do they compare to long-term US treasury bonds?, how do they compare to the S&P 500?

They've existed for 7 years(barely). Most of their investments would be way too early to tell the results of.

Re: How Andreessen Horowitz Is Disrupting Silicon Valley

#20

Post by foobarqux »

jeffreyrogers wrote: post #14
jeffreyrogers wrote: post #11

Earlier quoted context omitted.

I have data that compares other VC firms to the S&P 500. Give me a few minutes and I'll find it. Foreshadowing: it's pretty bad, you'd do much better putting your money in an index of the S&P 500.

Found it: http://www.kauffman.org/~/media/kauffman_org/research%20repo... The title is "We Have Met The Enemy...And He Is Us": Lessons from 20 years of the Kauffman Foundation’s Investments in Venture Capital Funds.

That's a great paper but most people are interested in the performance of the top 10 firms, not the average of the top 100. If I invest only in Sequoia/KPCB/AZ/Accel how well am I doing?
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