Protocol Pipeline
The inside story of the venture capital and startup world by Biz Carson.
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Is anyone not a partner at a16z at this point?

Andreessen Horowitz has more than 240 employees now

Hello and welcome to Pipeline. This week: Founders are throwing "startup showers," VCs are getting agents and every company is an AI company.


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Overheard

  • Where's your agent? Seven Seven Six's Alexis Ohanian signed UTA as his talent agency, a week after a16z's Nait Jones signed with WME. I'm still wrapping my head around the transition of VCs from Patagonia-vested dealmakers to celebrities.
  • "Odd things happen in the world and give rise to lawsuit[s]." The maker of tech's favorite electric skateboard, Boosted Boards, went under, but the Verge's story behind its demise involves meetings with Kanye West, Khosla Ventures suing Lime and insights into the pressure venture capital places on a company.
  • "It's almost like software equals AI," said Venrock partner Brian Ascher. Investment in AI startups six months into 2021 already dwarfs all of 2020, according to Protocol's Joe Williams, and shows no signs of slowing down.
  • Want to get under the skin of a competitor? Try buying the domain name of a rival CEO and having it redirect to the competition. In the war over one-click checkout, it happened to Fast's CEO after someone bought DommHolland.com (the name of Fast's CEO) and pointed it to a competitor, Bolt.
  • The next step after "startup showers:" funding reveal parties. Apparently entrepreneurs are celebrating their new babies, a.k.a startups, by hosting their own showers. That means we're officially one step away from funding reveal parties. (Send me your invites.)

Biz on Biz

a240z

Marc Andreessen and Ben Horowitz may be the people with their names on the door at a16z, but the two represent less than 1% of the staff of the ever-expanding firm.

Andreessen Horowitz has been on a hiring tear, bringing on folks like Intel's former CEO Bob Swan. "New rule: only share a personal update if you are NOT joining a16z as a general partner," tweeted Databricks' Nadim Hossain.

  • More than 240 people now work for the firm, making it one of the largest venture operations in the Valley. Its website lists 65 people as part of its investing team, and it continues to add more.
  • This week, Swan joined as an operating partner and Arianna Simpson was promoted from within to be a general partner of its crypto fund. They're joining a long list of folks who have joined the firm in 2021 including David Haber, Sriram Krishnan and Olivia Moore. Chris Lyons, head of its Cultural Leadership Fund, was also promoted to general partner.

The a16z shtick has always been about more than investing. The firm started in 2009 with half a dozen folks, but part of its vision has always been to grow and scale. It staffed up quickly to provide value beyond just money.

  • A16z now boasts a go-to-market team that helps companies scale faster (29 people), a capital markets team to strike up partnerships and help with M&A (13 people) and a talent team to help companies recruit (21 people across executive and technical recruiting).
  • When a16z announced its new crypto fund, the news wasn't just about the money it raised. It brought on heavyweights like Tomicah Tillemann as a global head of policy, added three big name advisory partners, poached the former head of Coinbase comms from Google and added five new staffers in roles like deal analyst to round out the fund. Don't worry about how a16z will feed those mouths: A $2.2 billion fund generates hefty management fees.

The confusing part? There are a lot of "partners" at a16z, but they're not capital-P "Partners" in the way most firms use the term. So it may look like a16z is bringing on the equivalent of Benchmark every few months, but you have to dig deeper into the new hires' exact roles.

  • On the investing side, each focus area has a roster of different "partners" that are the equivalent of associates or principals at other firms.
  • Then there's a stable of more than two dozen GPs who specialize in different areas, like overseeing the firm's $750 million bio fund or $3.2 billion growth fund.

It's also outgrown Sand Hill Road. With Haber's hire in New York and some new San Francisco digs, the firm is expanding past Silicon Valley. It has job listings open for associate partners for its go-to-market enterprise team in New York and bio vertical lead for its capital network in San Francisco.

As Wollit founder Liad Shababo pointed out, between the hiring spree and the funding rounds, a16z is now everywhere: "If over the past few days you haven't been named a general partner at a16z or raised money from them — are you really in tech?

A MESSAGE FROM SINGAPORE EDB

Singapore is fast becoming a global hotbed of tech innovation. It's easy to see why. Nearly 80 of the world's top 100 tech firms have set up outposts there, including Google, Facebook, Stripe, Salesforce and homegrown unicorns like the super-app Grab.

Learn more

Inside Track

  • Why now? It's a favorite question of venture capitalists, so Lenny Rachitsky broke down why top startups succeeded when they did.
  • All startups are trying to grow big, but what does that actually mean? Greylock's Mike Duboe talked with TechCrunch on how to actually define what growth is.
  • "Optimizing for today's market conditions means proving you can build a durable and profitable business isn't necessary. The sprint for the exit door means optimizing for growth even if it isn't good growth and if the dance stops the business could fall apart," said QED investor Frank Rotman in his breakdown of all this frothiness in the startup world.

Need to Know

  • There are now 900+ unicorns worth over $3 trillion. And nearly a third of them (291) became unicorns this year, according to Crunchbase.
  • A London VC firm is raising money by going public. I did not have this one on my crazy IPO stories of the year. (If you want a good summary of how wild the market is, check out my colleague Hirsh Chitkara's "SPACs are so Q1 and other takeaways from a disorienting year in tech IPOs.")
  • Gen Z VCs want to break into tech. The next generation of VCs is organizing its own virtual summit, co-hosted by Lerer Hippeau.
  • Time to upgrade your Zoom calls. Zoom launched its own app store with apps for everything from transcribing calls to charging for yoga class.
  • MasterClass, but for venture capital. All Raise is releasing a virtual bootcamp for female and nonbinary founders.
  • Release radar: Product Hunt has a new sister company: Hyper, a new early-stage venture fund. It feels like it mixes Y Combinator's mentorship strategy with every service-oriented firm out there and a dose of Product Hunt's distribution advantage. (More details on TechCrunch and Newcomer.)
  • On Protocol: How GameStop turned Public into the anti-Robinhood.
  • Also on Protocol: In bitcoin, Black entrepreneurs see a chance to rebuild generational wealth.
  • Your weekend reading: His fiancé died, and a grief-stricken Joshua Barbeau recreated her in AI to chat one last time. The SF Chronicle has a must-read story on love and loss in the age of AI.

Five Questions With...

Drive Capital's Chris Olsen

The former Sequoia partner left Silicon Valley in 2012 to return to the Midwest and invest in startups outside of the coasts. He co-founded Drive Capital, which counts Duolingo, Greenlight and Root Insurance in its portfolio.

What's been the main difference in investing in Midwest companies vs. Silicon Valley?

Entrepreneurs here are in closer proximity to customers. They tend to really understand customer pain points more quickly which allows them to apply new technologies to their customer problems as opposed to just being a technology in search of a future application.

What problem do you want to see a startup solve?

Carbon capture. Humans are at a scale today where we have a larger impact on our climate than nature itself. If we don't use our ability to steer the climate in a different direction, then I really worry we're creating our own demise.

What book do you think every startup founder should read?

"Leading: Learning from Life and My Years at Manchester United." It's the biography of Alex Ferguson and it was written by Mike Moritz. This book taught me what it means to be truly "world class."

What's one of the worst predictions you've ever made?

Level 5 autonomous vehicles would be available to purchase by 2020. Can confirm I still drive myself to the office.

Who are three people on your "personal board of directors?"

My wife, my wife and my wife; and no, I am not remarried.

I'm a big subscriber to the Charlie Munger philosophy — that the most important choice you make in life is who you marry. My wife Gina knows my blindspots, is (very) comfortable pointing them out, and I am grateful for her perspective on a daily basis.

A MESSAGE FROM SINGAPORE EDB

Business leaders say they choose Singapore for its modern tech infrastructure, strong government support, robust pipeline of talent and pro-business regulations (the World Bank ranks it No. 2 in the world for ease of doing business). Plus, its location in the heart of Southeast Asia serves as a launchpad into the bustling Asian-Pacific market.

Learn More

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