Late Stage Venture

We started Andreessen Horowitz a decade ago with the goal of partnering with great founders by investing across all stages of the company lifecycle — from seed through late stage.

Over that same period, the venture industry has seen a number of shifts, such as seed funds becoming an institutional asset class (leading to more pre-seed funds), and very large institutional money managers investing billions of dollars into venture (75% of last year’s “venture capital” dollars were invested in $100M+ rounds). And of course, with all this capital supporting them throughout, companies have been staying private longer than ever, resulting in a smaller number of actual IPOs, and much of the growth happening in the private markets.

Yet we remain driven by the same goal: backing bold entrepreneurs building the future through technology.

In doing so, we’ve expanded into areas we said we’d never go into (bio), and new industries that barely existed when we founded the firm (crypto). We’re also continuing to invest in areas we’ve always invested in, from early-stage enterprise to consumer and fintech. In fact, we just closed Fund VI — a $750 million fund focused on the latter three areas — which sits alongside our separate Bio and Crypto funds. Given the complexity and rapidly changing nature of technology, we increasingly believe that deep industry specialization is required. That’s why we set up these three funds with dedicated investment teams, but also preserved the ability to collaborate (both operationally and in investments) across teams and funds.

Today, we’re also announcing another specialized fund: a $2 billion late-stage venture fund (LSV Fund I). Why not call it a growth fund? We believe that “growth” is a loaded, one-size-fits-all term that not only means very different things to different people, but encompasses very different types of investors and a huge range of financings (everything from a $30 million Series C financing to a $1 billion Series G and beyond).

Where do entrepreneurs who are later stage — but still doing a significant amount of company building — go? In each era, there are a set of companies executing on unusually big visions for emerging categories, and we want these companies to be supported with a venture mindset that supports long-term vision and greater innovation risks. That’s why for us, growth is about late-stage venture — aimed at great new companies that are just hitting escape velocity, and that may need a more venture-like mindset to support their further company building and scaling.

If early-stage venture is about asking “What if it works?”, later-stage venture is also about asking “Is it working?” And just as early-stage investing requires deep vertical expertise, later-stage venture requires deep expertise in the financial evaluation of businesses. Since we have invested across different stages of a company’s lifecycle from the very beginning (sometimes investing as much as $100 million in later-stage opportunities), this is not a new area of investment for us. What is new, however, is the introduction of a dedicated fund, and a dedicated team, to pursue these opportunities. We previously announced David George as a new GP, and over the coming months, expect to see us continue to build out the broader team.

As the industry evolves, so do we. What will not change is our working together as a single team to partner with the best entrepreneurs and software-based startups across industries. All of these companies — regardless of domain, and regardless of stage — will continue to draw on our network of experts and expertise across the entire spectrum of company building, in executive and technical talent, go to market, corporate development, and brand/marketing, to help achieve their goals. Here’s to the next 10 years!

 

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