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    Andreesen Horowitz is loosing the
    ability to identify impactful startups
Pet peeve: it's losing, not "loosing".

I don't know if anyone can properly guess if a consumer startup is going to get traction until it does, especially in the mobile space. That said, they did manage to get a 312x return on their seed investment in Instagram (which they declined to invest in a second time as explained here: http://bhorowitz.com/2012/04/22/instagram/)

A-H offers seed investments to YC companies in order to get a foot in the door with the small fraction who will succeed. Offering blanket seed investments confirms that they really don't have any idea at first either. There's nothing wrong with that, it's just the nature of the beast. (http://venturebeat.com/2011/10/14/andreessen-horowitz-to-giv...)




This will probably come off as dickish, but that is not my intention.

No where in your comment did you outline where my reasoning is wrong. Losing vs Loosing. Instagram doesn't address why they are dropping series A investments. 300x growth on nothing is still nothing.

As for seed investments into YC companies, who cares? If they are getting out of the seed and series A game, I assume that that extends to everything else.

The fundamental point is that the further you move down the investment line the less you are likely to be able to identify revenue before it happens.

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I don't take it as being dickish. When did they ever have that golden touch you refer to?

None of the exits, except Instagram, listed on Wikipedia were invested in at a seed or A stage. http://en.m.wikipedia.org/wiki/Andreessen_Horowitz

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alternative perspective VC SV startup is at a tipping point and "smart money" is being more cautious ( conservative ) as the market swings down .

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Or maybe they are actually loosing the ability, like loosing the hounds of war! But I doubt it.

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I don't know if anyone can properly guess if a consumer startup is going to get traction until it does

A classic example is the drug Viagra, one of the most profitable consumer technology investments in recent history. Its (most profitable) use today was originall reported as a "side-effect" in early clinical trials.

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