Andreessen Horowitz Raises New $1.5B Fund

Re:Andreessen Horowitz Raises New $1.5B Fund by mchusma on Thursday March 27, 2014 @02:11PM (#7482131)

It is still expensive to build big companies, and $1.5B is tiny by financial markets standards. Bond firms like Pimco and Blackrock measure things by $100Bs and trillions.

Let's say you invest in 50 startups per year for 5 years. That is 250 firms, averaging $6M/firm.

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Re:Andreessen Horowitz Raises New $1.5B Fund by suzerain on Thursday March 27, 2014 @02:16PM (#7482183)

1.5 is small compared to the war chests Apollo, KKR and the like amass, but it's huge for a VC accustomed to writing smaller checks. Average US VC find is 107mm.

They're either going to be doing way more deals or shifting some of the fund focus to later stage. I expect the former, given that investors seem to like the granularity of separate venture and growth funds to pick from.

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Re:Andreessen Horowitz Raises New $1.5B Fund by imjk on Thursday March 27, 2014 @02:13PM (#7482147)

You're forgetting money that they can leverage from banks with the money they raised.

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Re:Andreessen Horowitz Raises New $1.5B Fund by HockeyPlayer on Thursday March 27, 2014 @03:06PM (#7482614)

I've never heard of a VC leveraging up with borrowed money. Who would be on the hook if the fund loses money?

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Re:Andreessen Horowitz Raises New $1.5B Fund by ganeumann on Thursday March 27, 2014 @03:14PM (#7482678)

VCs' portfolio companies often raise debt. This is called venture debt and the lenders are banks like Silicon Valley Bank.

VCs tend to have a love/hate relationship with venture debt. On the one hand, it means they suffer less dilution as the company grows; on the other hand, it means their investment gets riskier just at the point where they are finally de-risking the company.

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