Andreessen Horowitz

Thomas R. Eisenmann; Liz  Kind

Case | HBS Case Collection | January 2014 (Revised October 2014)

Andreessen Horowitz

Abstract

Andreessen Horowitz (a16z), a venture capital firm launched in 2009, has quickly broken into the VC industry's top ranks, in terms of its ability to invest in Silicon Valley's most promising startups. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic structural change; and asks whether a16z's success to date has been due to its novel organization structure. a16z's 22 investment professionals are supported by 43 recruiting and marketing specialists—an "operating team" that is an order of magnitude larger than that of any other VC firm. Furthermore, the operating team aims to not only assist a16z portfolio companies, but also to be broadly helpful to all parties in the Silicon Valley ecosystem, including search firms, journalists, PR agencies, and Fortune 500 executives. The bet: by providing "no-strings-attached" help to ecosystem partners, the partners might someday reciprocate by steering founders seeking funding to a16z. The case closes by asking whether a16z should seek to double its scale over the next years.

Keywords: Business Model; Venture Capital; Disruption; Entrepreneurship; Industry Structures; Financial Services Industry; California;

Language: English

Format: Print

26 pages

Educators Purchase

Citation:

Eisenmann, Thomas R., and Liz Kind. "Andreessen Horowitz." Harvard Business School Case 814-060, January 2014. (Revised October 2014.) (request a courtesy copy.)

Baroo CEO Lindsay Hyde was facing unrest from the board of her pet services startup in August 2017. One board member (and lead investor) was alarmed that Baroo’s growth was slowing while its appetite for funding was accelerating. Hyde wanted to hit the gas and continue expanding to new cities, which meant she needed to raise venture capital. How could she convince the board and potential investors that the business opportunities were too good to pass up and an infusion of capital could help her steer Baroo through the speed bumps?

Baroo CEO Lindsay Hyde must secure venture capital funding if she wants to save her pet services startup. If she is unable to finance a series A, she will need to sell or shut down.

In 2016, senior management at Moz, a venture capital-backed startup providing software tools for digital marketing professionals, must decide how to address a looming cash flow crisis precipitated by failed efforts to broaden its product line. Seattle-based Moz had originally focused only on search engine optimization (SEO) software. Aiming to accelerate growth, over the past three years the startup had launched products targeted at content marketers, social media marketers, and small local businesses. Adoption of these new products had been disappointing, and the resource drain and distraction of launching them had reduced the growth of Moz's core SEO product. Management was wrestling with whether to either: 1) shut down or sell the new products; or 2) double down on the new products, funding further investment in them by selling the core SEO business or milking it as a "cash cow."

Faculty & Research

Andreessen Horowitz

Abstract

Citation:

About the Author

More from the Author

Faculty & Research

Andreessen Horowitz

Abstract

Citation:

Related Work

About the Author

More from the Author