
Andreessen Horowitz Joins The Start Fund To Seed YC Companies - joetyson
http://techcrunch.com/2011/10/14/andreessen-horowitz-start-fund-yc/
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pg
Like Ron and Yuri, Andreessen Horowitz are real pros. I think founders will
like them.

~~~
wavephorm
I emailed a16z to ask for a meeting or phone interview about an "amazing"
opportunity to invest "early" in a new startup. They did not respond or ask
any questions, I was completely ignored.

All their deals seem like big money and late stage. Do they know a good
startup when they see it? Seems like instead of finding startup investment
opportunities by themselves they're going to let YC filter out the good deals
for them.

They even said in the article it's just about deal flow.

~~~
pg
Don't you do the same thing when you get emails offering you amazing business
opportunities?

As a general rule, no VC firm will respond to a cold email. You need an intro
from someone they know. Your best bet is to try to get an intro from someone
at a company they've invested in.

~~~
wavephorm
They have a form right on their site for submitting business plans.

<http://a16z.com/about/contact-us/>

~~~
pg
Even if a VC offered an email address to send business plans to, I'd try to
get an intro instead.

(Also, the instructions on the form say it is for "other inquiries." You're
supposed to send business plans to one of the email addresses on the right. So
if you used the form that may be why you didn't hear back.)

~~~
Hitchhiker
Let me be a little less polite than PG

VC public e-mail addresses == /dev/null .. they exist purely to appease the
raging masses of entrepreneurs hanging outside their walls, reading
Venturebeat ( fill in another 10 top " blogs " of your choice ) more than
mails from their mum.

Cold calling any of them will not work. Heck even intros from the highest
level are not treated that nicely if you're a first time guy.

Best place to be in, acquire unfair advantages like a yC tag and learn
everything you can from insiders. Make a product that even in its most seed
form shows a pathway to an entire industry. Get traction.

"If you're in a fair fight, you didn't plan it properly." - Nick Lappos, Chief
R&D Pilot, Sikorsky Aircraft

~~~
samstave
> _VC public e-mail addresses == /dev/null .. they exist purely to appease the
> raging masses of entrepreneurs hanging outside their walls, reading
> Venturebeat ( fill in another 10 top " blogs " of your choice ) more than
> mails from their mum._

Doesn't this sound like an opportunity then?

Why have a blackhole at all? Why be so un-innovative? Sure, it will cost you
money - but if you claim that this is the reason for NOT doing it - you admit
that innovation is not your goal, but profit only, thus it will go against so
many supposed charters of VCs out there...

Let's be honest here. What is the bottom line?

Either VCs only want a "sure thing" or they actually want to foster innovation
and progress, and receive profit as a result.

If you are in the former, not the latter, then - sorry - but I have no respect
for you. Regardless of your success.

Paradigm shift, we need it.

~~~
Hitchhiker
Sam, I noticed your later comment. My apologies if I peeved you off.

Perhaps, you are correct, I do not have the expertise to have a POV.

Just a minor correction, I do not have an MBA and or the admin with the
description you gave. That's rather demeaning to the women who may be reading
this list.

Just another coder in a team of four trying to figure things out. You've
correctly identified err.. my virtues[1].. guilty as charged.

Take it easy mate.

[1] -
[http://en.wikipedia.org/wiki/Larry_Wall#Virtues_of_a_program...](http://en.wikipedia.org/wiki/Larry_Wall#Virtues_of_a_programmer)

~~~
samstave
:) I had a little wine. This makes me punchy on text... Sorry about that.
Nothing personal.

I just want the startup world to get the return on value that they produce.

I am still jaded in this area...

Thanks for the reply.

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bfe
Interesting that both SVA and AH responded to the success of YC not by setting
up separate programs to emulate it, but by coalescing around it. This clearly
made sense for Milner as a relative newcomer but the other two groups had no
shortage of connections and capabilities in place and could easily have taken
either route. YC keeps increasing the margin by which it is the top program of
its kind.

~~~
pbreit
"easily"

Creating and running YC is not in the least bit easy.

~~~
bfe
Certainly not! Especially being the forerunners of their new model.

I just meant that SVA and AH _could_ , if anybody anywhere could, and if they
so desired, have concentrated their resources to try to set up a new program
that emulates YC. Compared to anyone else's chances, in the universe, to
emulate YC, SVA or AH would have had the financial, intellectual, and social
resources to have had a _relatively_ easier go at it.

But neither of them tried to emulate, they both chose instead to coalesce
around and go to war with the YC they had.

I think that choice is non-trivial, and significant; and it lends ever more
acceleration to YC putting ever greater depth between itself and any potential
competing program.

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betterlabs
This is awesome for YC / YC startups as well as AH as they get to be in the YC
companies at the very early stage. However, I am not able to understand why VC
firms would go so broad and fund such a large number of startups with amounts
that are insignificant for their fund sizes. Would it not be distracting?
Would it not leave them with too broad a portfolio to be able to truly make
significant contributions to the company's success? Does it not feel like a
spray and pray approach? I _totally_ understand this from a deal flow
perspective but I'd love for VC firms to focus on deals they believe in and
focus on building massive game changing businesses. And for this, I am sure
they have to invest in 10 to find 1 that works, but investing in 200 feels not
so right - and lacking conviction.

~~~
pg
Almost all VC funds do seed-sized investments now. Both sides understand it's
not the same as a series A, and both are ok with that.

Incidentally, Ron Conway is proof the model works. He has been operating this
way for decades and founders are as a rule pretty happy with the amount of
help he gives them.

~~~
betterlabs
I am not sure if VC firms doing seed investing have done it in such large
numbers and if not (which I think is the case), are they setup to manage 100
startups a year versus 15.

Also I am wondering if this approach will have to be the new approach or the
one that Khosla, Benchmark, Sequoia (I understand they are indirectly in YC
companies) and similar ones have had for long, of identifying big trends,
finding the right company and going big behind it, is still better. I have
seen the latter fail as well as succeed. I think we have very little data on
the former but there is bound to be a limited set of companies that a VC
partnership can optimally support / manage and this new approach may put a
strain on it. I guess we have to wait and see. Thanks much for replying, pg.

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timerickson
So, the deal stays at $150k correct?

What incentive do Ron and Yuri have to give up 1/3rd of the Start Fund deals
to Andreessen Horowitz?

Forgive me if this is a naive question.

~~~
staunch
1\. AH could offer $50k on the same terms if they wanted, and most companies
would probably take it. It's not like Yuri/Ron have any exclusivity
arrangement.

2\. YC classes have grown in size a lot. It's probably a bit more expensive
than they planned, so they don't mind sharing the load.

3\. Having AH as a partner helps the startups, which means they're more likely
to succeed (hopefully).

~~~
timerickson
1\. Then why did they need to negotiate to be a part of Start Fund, surely
they could offer a separate, secondary deal of $50k to each YC company

2\. This is highly plausible and sounding to me like the most likely reason

3\. Absolutely, I'm just trying to understand why its as 1/3rd of Start Fund
instead of offering their own deal

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knarf55
This is really cool. Love the fact that they are trusting PG and team's
filtering process and guidance to build great startups. This is super sweet
for the founders as well since they will provide some awesome advice and
guidance.

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nhangen
This is great because it now means you not only get PG's advice (and the YC
team), but that of Milner AND AH to boot. Makes me really excited about
October 31.

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Kavan
Congrats YC! Fills a gap too. Ron - Seed, AH - VC, Yuri/DST mezzanine.

I am a little surprised that Ron and Yuri let them in on such a good deal. I
am sure a lot of VCs would jump at this opportunity.

