“A culture is not a set of beliefs, it’s a set of actions.” –Bushido

We do only first class business and only in a first class way

We take this inspiration from James Pierpont Morgan who built and ran what was one of the first venture capital businesses. For us there are several components to it:

We respect the intense struggle of the entrepreneurial process and we know that without the entrepreneurs we have no business. When dealing with entrepreneurs, we always show up on time and we always get back to them timely and with substantive feedback, even if it’s bad news (like a rejection).

We have an optimistic view of the future and believe that entrepreneurs, whether they succeed or fail, are working to help us achieve a better future. As a result, we never publicly criticize any entrepreneur or startup (doing so is a fireable offense). This does not mean that we leave CEOs in place forever. Our obligation is to the company not the founder. If the founder is no longer capable of running the company, the founder will not remain as CEO.

Our word is our bond. When we make a commitment to a partner, an entrepreneur, a limited partner, or someone in our network, we keep it. Although we have legal agreements, the people who we do business with do not need them, because what we say is what we do. As a result, we do not haphazardly commit the firm. We carefully consider and discuss all important commitments, because we will live up to what we commit.

We tell the truth even if it hurts. When talking to an entrepreneur, an LP, a partner, or each other, we strive to tell the truth. We are open and honest. We do not withhold material information or tell half truths. Even if the truth will be difficult to hear or to say, we err on the side of truth in the face of difficult consequences. We do not, however, dwell on trivial truths with the intention of hurting people’s feelings or making them look bad. We tell the truth to make people better not worse.

We take a long view of relationships, because we are in the relationship business

We build relationships with people with whom we want to do business with for a very long time and we treat them as such. We do not take a transactional view. If we meet an executive, we take an interest in her career and help her find the right job for her. We do not try to jam her into a specific company. If we bring a corporate partner on board, we seek to help them innovate in a way that meets their business needs. We do not try to sell them a product because we have a company that needs to make a quarter. If we invest in an entrepreneur, we don’t just spend time with her when she is a “winner”.

We are there in good times and in bad. We can be a tough friend at times, but we are a friend for life. We never compromise long-term trust with any relationship for the sake of a short-term win. However, we expect our partners to be good friends to us and our expectations about what it means to be a friend are high. If our partners do not treat us in kind, we will walk away.

We believe in the future and bet the firm that way

We are in the business of investing in innovators. This has many implications. First, the nature of the bet is asymmetric. We think far more about how big the outcome will be if a deal succeeds than all the ways that it can fail. We don’t criticize deals that aren’t working, because we know the bet was asymmetric when we made it and the job was dangerous when we took it. Next, we never ridicule or dismiss new ideas that we do not yet understand. If we don’t understand something, we assume that we are the ones who are slow, not the entrepreneur. Finally, we invest in the magnitude of the strength of the idea and the team, not in their lack of weaknesses.

We invest in innovators and we too must innovate. Thanks to our entrepreneurs, the world is changing fast and we must continue to change with it. This means being open to new ideas no matter how crazy they sound at the time. Everything we’ve ever invested in sounded crazy at some point — from virtual reality to cryptocurrency to air mattresses in apartments, we know that breakthrough ideas are difficult to recognize at the time and we strive to do just that. In addition, as new technological categories emerge, we will reorganize the firm, change our fund structure, and even revisit our culture to adapt.

Innovation is not an excuse to avoid today’s work, nor does it mean that we celebrate failure. We set objectives, we measure ourselves, and we deliver against those commitments. The goal is to win and we will win by being willing to question our assumptions, take risks, and iterate our way to success.

We are all different, we recognize that, and we win

Some of us are introverts and others are extroverts. Some are super conscientious and others are amazingly creative. Some are great with relationships and others are great with ideas. And we value it all. We come from very different cultures and backgrounds, yet we work hard to see and understand the talent in each other.

We are diverse, but that’s because we can see each other’s talents and we value those. We don’t have quotas or goals or objectives to be diverse — we have a goal to be the most talented firm in the industry and we end up being diverse as a result of that goal.

When we come to work each day we strive to recognize each other’s superpowers rather than diagnose each other’s weaknesses. We all have weakness, but our superpowers define us. This combination of different strengths and different thinking differentiates us and enables us to stand out as a firm. We try to put everyone in a position where their superpower matters more than their weaknesses, but none of this will excuse lack of effort, hard work, or determination. We believe in each other’s potential, but we expect everyone to perform.

When it comes to politics, we value different viewpoints within the firm, but we don’t allow those differences to negatively affect our relationships with each other. As a firm, we take public political positions only when they are directly related to creating new companies, such as crypto regulation and IPO rules, for example.

We celebrate the good times

A huge part of all of our lives takes place at work and we need that time to be meaningful and memorable, so we celebrate our individual and collective wins and we celebrate them well. We look for opportunities to celebrate and use our creativity and innovative skills to make those celebrations “can’t miss” events. When one of us achieves something great, we all take pride in it and we are more excited for them than we would be for ourselves. We want to see each other win.

These celebrations are meant to reflect and enjoy each other — we always treat others appropriately and with respect, including when we celebrate. A celebration is not a free excuse to be an idiot.

We play to win

Our culture only matters if we are important. In order to be important, we must win. We believe that we are the best firm in the world to do business with and we expect to win. When we engage in a deal, we present the firm in the best light, call on every resources to help, and do whatever it takes to win.

We are the best firm, so we expect to win with an equivalent or lower offer than anyone else bidding. Therefore, we do not win by arbitrarily overpaying. Having said that, our strategy is to invest in the best companies, not get the best bargains.

We do it for the team

Every time we win, we win as a team. Every time we lose, we lose as a team. Since our inception, this has been our way. We do not focus on our own individual credit and we do not distance ourselves from anything anyone in the firm does. At a16z, venture capital is a team sport and we want team players. And we always put the interests of the firm ahead of those of any individual member of the team.

In exchange, everyone has a responsibility to prepare, work hard, maintain a high standard of performance, and be a good teammate. If you do not, you cannot be part of this team.

 

AH Capital Management is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply any special skill or training. Past performance is not indicative of future results. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. This content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Please see a16z.com/disclosures for additional important information.