Mark Anderson dreams of making A16z a permanent company, beyond partnerships

Many project industry monitors I wondered Whether Andresson Horwitz, a company that is It runs 45 billion dollarsShe has her attention in the end she became a company circulating for the public.

Participant founder Mark Andrink said he does not “give up the saying to take the public company,” this week Invest like the best podcast. But he discussed his goal of building the A16Z in a permanent company, inspired by JP Morgan and private stock companies that are generally traded.

Historically, investment capital companies were partnerships consisting of “a small tribe of people sitting in a room together, trying to wear ideas on each other when they investments.”

He said that the problem in the partnership model is that it depends heavily on the ideas and experiences of these people on the table with “no value for basic assets”, as he described it. Once the original partners retire, the company loses a lot of its value, even if it takes a new generation of investors.

“But even if they can continue to do so, there is no basic asset value. He said that the next generation will have to hand it over to the third generation.” “Perhaps this will fail in the third generation. Wikipedia will one day be on: that company is present, then it has disappeared.”

The partnership model can be profitable. Billion A16Z is born under management large funds management fees, as well as the profits it made when its investments succeed.

However, Anderson said that he consistently mentions internal employees and limited partners that the company does not collect funds only to reap the fees. It is to give the company money to invest in growing companies.

“When we go to the size, it is because we believe it is necessary to support the types of companies that we want to help our founder to build,” he said.

Andrink says his greatest goal for A16Z is the creation of a company that lasts. Andrink said that a substitute for the partnership is to build an investment company that is managed such as business, which means that it has multiple management and classes of employees and the work department with specializations and training programs.

Certainly there are precedents of small partnerships that develop into large companies, which Andressen can be used as a model for A16Z aspirations.

“Goldman Sachs and JP Morgan, 100 years ago, seemed to be small investment capital companies,” he said. “Then their leaders, over time, turned them into huge privileges and large public companies.”

He also named other examples, for private partnerships that have turned into large companies in general, such as large private stock companies. Blackstone, who now has the market value of more than 200 billion dollars, was published in 2007. APOLLO, KKR and Carlyle have subscribed to their subscriptions shortly after Blackstone, and TPG listed on the Nasdak Stock Exchange in early 2022.

Andrink argues that with the growth of these companies from partnerships to large companies, their long -term success has become less dependent on a few major investors.

“A large part of what we were trying to do is building something that has this type of permanent side,” he said.

In many ways, Andressen Horowitz already looks like a more operating company than many VC companies. A16Z has dozens of people in the marketing group and large teams that help conservative companies to use talents and sell their products. The company runs encrypted strategies, Pew, health, and American dynamics.

But there may be another reason that Anderson is keen to restructure away from the classic VC system. When it comes to partnerships, he says: “It has already become clear in most cases, what you discover is that people do not like each other much.”