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Six months ahead.

Marc Andreessen

Watch: Marc Andreessen on Twitter, Secondary Sales, Pulling the Plug, and More

On Thursday night, at a StrictlyVC insider event, I interviewed famed entrepreneur-investor Marc Andreessen, whose most recent headline-grabbing maneuver (intentionally or not) was to take a Twitter break one week ago.

I talked with Andreessen about why he has had enough of the social media platform for now, along with a lot of other things. For those of you without the time or inclination to watch the entire 50-minute interview, I’ve broken out some of what I asked Andreessen, and where you can find his specific answers. (I’d write out his comments, but anyone who has seen Andreessen speak can attest that he talks in wide-ranging paragraphs, so we thought this might make more sense.)

First 4 minutes or so: Twitter stuff. Andreessen suggests he left for now owing to today’s highly politicized environment, saying he feels “free as a bird” as a result. My colleague over at TechCrunch, Katie Roof, wrote a related story here.

At 4:00: We talk about whether he still believes that there are 15 companies per year that will go on to create at least $100 million in annual revenue (and that those are the firms top VCs must back to stay on top). It’s the thesis around which Andreessen’s venture firm, Andreessen Horowitz, was founded in 2009. My question more specifically is whether that number has grown larger or smaller or remained static.

Around 9:00: I asked if more of the winners — no matter their number — are being created outside of the U.S., Silicon Valley-focused Andreessen Horowitz is perhaps missing them.

At the 11:20 mark: Here, Andreessen answers whether too much money is finding its way to Silicon Valley and what the impact might be if so.

At 16 minutes: Andreessen answers why today’s private companies — which Andreessen has argued can better compete with public companies (versus other public companies) — won’t run into the same exact constraints as their public company counterparts when they eventually go public, too.

At 18.5 minutes: Here, I bring up Bill Gurley’s recent theorizing that once Uber goes public, it will be expected to be profitable, and its well-subsidized, still-private competitors will undercut it on price and try to steal market share. I ask whether this is a concern for Andreessen-backed Lyft and others of its portfolio companies.

At 22 minutes (ish): Andreessen talks about why it’s easier but not absolutely necessary for founders to implement a dual-class structure in order to maintain control of their companies once public.

Approaching 23:30 minutes: I’ve just asked Andreessen why, despite an uptick in M&A by nontraditional tech acquirers (think General Motors and the many private equity firms to go shopping this year), we aren’t seeing more acquisitions by Google, Facebook, or Amazon.

28:00: Now we’re getting into specific questions about Andreessen Horowitz, starting with whether or not Andreessen thinks the firm changed the game on the field by paying more for deals than Silicon Valley investors had ever seen.

At 31:30: I note that Andreessen Horowitz missed what seems to be the biggest winner of the last decade: Uber. I ask how that impacts the firm. He doesn’t love this particular question, and steers the conversation down the path of why it makes sense to lead more than one round in a winner (which also came up in my question).

At 35:00: I reference a 2015 New Yorker profile of Andreessen, which noted the daunting amount of capital the firm will need to produce for investors who’ve given the firm a whopping $6.2 billion, assuming they expect a venture-like 5x to 10x return. He tells me the firm is “elephant hunting,” a firm he has used frequently to describe Andreessen Horowitz’s investing style. (Evidently, that explanation is sufficiently convincing to the firm’s investors for now.)

Around 35:30: Here, I ask a question about whether or not he thinks Andreessen-backed Airbnb could possibly catch up to the valuation of Uber. (Btw, in the course of this answer, he says that Andreessen Horowitz has backed Airbnb “primarily in one round,” so make of that what you will. TC has reported that Airbnb is currently raising another humongous round.) Astute listeners might also note that in a reference to Sequoia Capital’s Alfred Lin, I accidentally refer to him as “Alfred Lee.” I sometimes have verbal dyslexia.

36:30: Has Andreessen Horowitz sold stakes via the secondary market? (He takes his time here, but the answer is yes. I missed the chance to ask where/when, because of his lengthy reply, though the WSJ has reported that the firm sold some of its shares in the ride-share company Lyft earlier this year. )

At 40:35: Andreessen talks here about the firm’s philosophy about selling after an IPO. (“Our LPS are very clear with us, which is that they’re paying us to manage private, not public, money.”) His answer is characteristically more nuanced than that, but it sounds like they distribute stock to their investors faster than other VCs might.

At 42:15: I share an observation that I’ve heard from entrepreneurs, which is that they are sometimes disappointed by how little time they get with the AH partner who leads the investment in their company, and that they are sometimes passed off to non-investing partners quickly (and sometimes, those non-investing partners’ junior staffers). He responds.

At 45 minutes: The WSJ recently reported that AH’s returns trail those of other firms, but because it’s frankly too soon to know how it will stack up, here I ask Andreessen how he measures the firm’s success in the meantime, and what makes him think his firm’s whole agency-style network set-up is working.

At 48:30: Here, I ask how AH decides to pull the plug on an investment.

51:20: This is the last question (I was dinged by an assistant for running over our allotted time): Andreessen, whose son was born last year, answers how fatherhood has surprised him.

Photo: Dani Padgett 

Expect More M&A This Year and Next, Says Marc Andreessen

Screen Shot 2016-06-14 at 1.31.15 PMVenture capitalist Marc Andreessen spoke at the Bloomberg Technology conference yesterday afternoon, and he said he expects far more M&A than the tech industry has seen in recent years.

The conversation stemmed in large part from questions about LinkedIn’s announced acquisition by Microsoft, which disclosed Monday that it is paying$26.2 billion in cash for the business networking platform.

Asked his opinion about the deal, Andreessen — who was interrupted by the clang of a falling tray (“I hope that was not a symbolic sound effect,” he joked) — said the deal “eliminates the guesswork about how much [a company is] worth when someone pays $26 billion in cash ” for it.

But he also said that, on a higher level, it conveys something about the industry right now. “We see more M&A happening in the pipeline – meaning companies in consideration or negotiation — than in the last four years.”

There are a few reasons for it, he suggested, saying that in recent years, a lot of “public companies sat back and watched the drama play out in the Valley . . . and the constant drumbeat of ‘bubble, bubble, bubble.’” Now, with many private company valuations down from their peaks last year, along with public companies that “now have to go shopping to fill in gaps in their portfolio,” Andreessen said to expect a “run of M&A the rest of this year and next year.”

The buyers won’t necessarily be Facebook, Microsoft, and Google, he noted. “A lot more nontraditional buyers — Fortune 500 companies outside [of tech are] going shopping, [including] the car industry, other consumer products companies, clothing companies.” (Andreessen didn’t say so, but private equity firms also plainly see an opportunity to do some shopping right now.)

In fact, Andreessen’s firm, Andreessen Horowitz, is trying to prep its portfolio companies for an exit by establishing what he described as an IPO preparedness team that’s working with founders on what’s required to go public, from accounting and legal, to building a governance team, to selecting the right CFO.

More here.

Benchmark’s Newest Partner, Eric Vishria, On Year One at the Powerhouse Firm

eric_headshot_2In July of last year, Eric Vishria, a longtime Opsware executive who became co-founder and CEO of the social browsing startup Rockmelt, joined the Sand Hill Road firm Benchmark as its fifth general partner. It’s an enviable position, given the reputation of the 20-year-old firm, which has backed Uber, Snapchat, and the publicly traded companies Twitter, Hortonworks and Zendesk, among many others.

At Benchmark, which famously sticks to its early-stage knitting, with recent funds all closing at $425 million, general partners also have an equal share in the firm. That’s rather unlike most venture firms, where older partners typically receive outsize economics (and younger partners often hightail it for greener pastures).

That’s not to say the work is easy, exactly. We talked with Vishria yesterday about his first year on the job. Our chat has been edited for length.

How’s it going one year in?

It’s been really amazing. Don’t tell entrepreneurs this, but it’s the best job ever. Every meeting you walk into, you’re learning something. You’re meeting with an entrepreneur, learning about a new space or idea . . . It’s just such an intellectually stimulating job. I find it very inspiring.

How do you keep from getting overly excited about the new ideas you’re seeing? We’d think that would be tricky at first.

I’ve now seen about 180 companies – I track it – and in the first few weeks, I was like, “Oh my God, all of these ideas are investable!” And they weren’t.

More here.

Don’t Panic: On VCs and Bubble Trouble

panic buttonSeveral of the country’s most prominent venture capitalists have sent the startup world into a hysteria in recent weeks. Bill Gurley of Benchmark kicked off the panic when in an interview with the Wall Street Journal, he lamented that companies have taken their burn rates to levels not seen since 1999 and noted that “more humans in Silicon Valley are working for money-losing companies than [they] have been in 15 years. . .”

Fred Wilson of Union Square Ventures weighed in the following day, writing at his popular blog: “The thing I like so much about Bill’s point of view is that he does not focus on valuations as a measure of risk. He focuses on burn rates instead. That’s very smart and from my experience, very accurate.”

Roughly a week later, Marc Andreessen decided to explain on Twitter why he agrees with both Wilson and Gurley. Using even more vivid language than his peers, Andreessen wrote that “when the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate co’s will VAPORIZE.”

The truth is that none of the VCs needed to broadcast their thoughts so pointedly. Gurley has been saying for years that there’s a problem with later-stage investing. It’s largely because his firm believes so strongly that there’s an inverse correlation between how much money an outfit accepts and the returns it produces that Benchmark continues to raise funds in the neighborhood of $425 million instead of raising more capital, which it could easily do.

It isn’t the first time that Andreessen has voiced concern over burn rates, either. Back in July, he warned entrepreneurs against “[p]ouring huge money into overly glorious new headquarters” and of “[a]ssuming more cash is always available at higher and higher valuations, forever. This one will actually kill your company outright.”

So why clang the alarm bell more forcefully now? Well, burn rates really are rising at later-stage companies, as Pitchbook data underscores. But it’s also worth remembering that while VCs might be friendly and respect one another, when it comes to business, they do what it takes to burnish their own brands. Surely Wilson, Gurley, and Andreessen are genuinely astonished by some wild spending on the part of startups, but they’re also competing with each other – in this case, about who first noticed that startup spending is out of control and who is the most disgusted by it.

The warnings are also – and perhaps primarily — a defensive move. A flood of late-stage money has poured into the venture industry. While that’s been good for VCs in some cases – Tiger Global and T.Rowe Price are among other newer entrants to mark up investors’ earlier deals – that capital isn’t as welcome as it might have been a year ago, given that it just keeps coming. (As Fortune reported last week, Tiger Global is raising another $1.5 billion fund, just five months after raising its last $1.5 billion fund. It’s hard for anyone to compete with that kind of money, even Andreessen Horowitz, which has raised roughly $4 billion since launching five years ago.)

Gurley and Andreessen have grown increasingly transparent about their disdain for some newer funding sources, in fact. In April, in one of Andreessen’s famous series of tweets, he warned founders to be “highly skeptical” of growth-stage investors outside Silicon Valley, saying they offer founders “breathtaking high-valuation term sheet[s],” then convince the teams to “go exclusive and shut off other talks,” which limits founders’ options going forward.

On Saturday, presented on Twitter with a year-old chart that suggests rising burn rates don’t necessarily point to a bubble, Gurley tweeted: “[C]hart also doesn’t include 2014 (major uptick) and new sources late stage $$ (which is the majority of funding).” He then added, “I never said there was a valuation bubble — I just said burn rates and ‘risks’ are quite high.”

You can’t blame Andreessen, Gurley or Wilson for commenting on the market. These are frothy times, and if trouble is just up ahead, it’s better to be on record for acknowledging some of the risky behavior they’re seeing.

If in the meantime their warnings prompt more companies to eschew these “new sources of late stage money” zeroing in on them, well, that’s probably okay, too.

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The Origins of Netscape, as Tweeted by Marc Andreessen

marc-andreessenAs everyone now knows, Marc Andreessen apparently made it a New Year’s resolution to begin tweeting, just as some of the platform’s most prolific users are deciding to dial it down. That’s good news for the roughly 42,000 of us who are following him, given that he usually has plenty of interesting observations to make.

Sunday afternoon, for example, Andreessen entered into a Twitter conversation with 21-year-old Marcos Villacampa, a self-described “startup addict” in Spain, who tweeted, “It is really, really difficult to find the *real* story of events in the past which involved winners and losers.” Villacampa then tweeted of Andreessen specifically that Mosaic “wasn’t exactly a one-man job…”

Here’s the history lesson that Andreessen offered Villacampa in turn. (We feel vaguely trollish publishing it, but because it’s useful background, and conversations are so quickly lost on Twitter, we thought we should seize the opportunity to capture the exchange.)

 

 

 

 

 

 

 

 

 

 

 

Why Andreessen Horowitz’s Fourth Fund is Likely Around the Corner

moneymoneymoneyYesterday, in a WSJ series on venture capitalists’ predictions for 2014, Managing Partner Scott Kupor of Andreessen Horowitz was asked if “venture capital returns have improved enough to draw renewed limited-partner interest in 2014.”

Kupor said the question was really “whether investment dollars will continue to be concentrated in the top firms that enable them to generate above-average returns.”

Kupor shied from saying that fundraising for Andreessen Horowitz will be a walk in the park as always, but it’s a safe bet to make. In fact, it’s likely that Andreessen Horowitz will announce its next big fund in January or very soon after. (The firm declined to comment for this story.)

Consider, for starters, that early last week, the firm announced a new general partner, Balaji Srinivasan, who cofounded a genetic-testing company that makes a saliva-based test for more than 100 serious inheritable diseases. VCs don’t always bring in fresh GPs before a new fund raise, but it’s a little cleaner that way. And Srinivasan gives Andreessen Horowitz an even stronger case to make to investors, given his background in consumer-facing healthcare — an increasingly attractive area of investment where he bolsters Andreessen Horowitz’s expertise.

It’s been almost two years since Andreessen Horowitz debuted two funds totaling $1.5 billion. Most venture firms raise money every three years, but that’s never been the modus operandi of Andreessen Horowitz, whose biggest bets include Skype, Twitter, Facebook, and GitHub. (Readers might recall that Andreessen Horowitz collected $300 million for its first fund in 2009, $600 million for its second fund in 2010, and a $200 million co-investment fund in 2011, before announcing its biggest funds to date – a $900 million fund with a $600 million parallel fund — in January 2012.)

A little basic math also points to a new fund in the very near future. When I sat down with firm cofounder Marc Andreessen in mid-October, he told me then that the firm’s third fund was “about 70 percent committed.” And if you’ve been following the news, you’ll notice the firm has led a string of very big investments since.

Yesterday, Crowdtilt, a crowdfunding platform, announced it had raised $23 million in Series B funding led by Andreessen Horowitz. Last Friday, the startup Oculus VR revealed that it had raised $75 million to more broadly market its virtual reality headset. Its lead investor: Andreessen Horowitz. And last Wednesday, Andreessen Horowitz made a giant bet on Bitcoin, leading a $25 million investment in Coinbase, a company that makes it easier to buy and sell the digital currency.

That’s saying nothing of the smaller deals that Andreessen Horowitz has helping to fund, including Koru, a young education startup, and Doctor on Demand, a new company behind a mobile app that connects users with physicians for a consultation fee.

For a gun-slinging firm that likes to make outsize bets when it spies the chance, that doesn’t leave a lot dry powder — especially when taking into account reserves for follow-on fundings.

“We’ll probably raise a new fund next year,” Andreessen had told me back in October. My guess: we can expect it much sooner than later.

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VCs Want to Know: What Else Have You Got?

whatchou gotIt’s getting tough out there for entrepreneurs. No longer is it enough to create a sustainable, profitable, fast-growing product that’s beloved by customers.  These days, top VCs are placing a bigger premium on what’s next.

Andreessen Horowitz is “generally willing to take more risk on a product that hasn’t yet been built,” Marc Andreessen told me last month.

“We want to be in the most extreme propositions — the sort of thing where it’s either a moonshot or a smoking crater in the ground,” he explained. Toward that end, he’d said, “We’re willing to impute value into [what’s coming next out of a startup] if we’re highly confident that the team can build it and that the market is really going to want it.”

Ranjith Kumaran has seen this focus on the future vision first-hand. Kumaran, who cofounded the file sharing and online data storage company YouSendIt (renamed Hightail last July), is CEO of PunchTab, a nearly three-year-old loyalty and engagement platform that helps customers like Arby’s Restaurant Group create instant loyalty programs.

PunchTab’s trajectory has been impressive. In addition to growing revenue five times over last year, it has expanded its enterprise customer base from 10 to more than 40. Nevertheless, Kumaran finds that the VCs with whom he meets care most about Punchtab’s “next-horizon solutions”; they want entrepreneurs to paint a picture.

“I believe that wasn’t the case before,” he observes. “Series B was about how fast you’re growing and how you get to next revenue [milestones].”

If VCs are no longer enamored of velocity alone, the shift likely owes to a number of factors, beginning with the fact that fewer venture firms have come to control greater amounts of capital and need bigger returns than ever to justify such pools.

“It’s a very different dynamic today,” says Brian O’Malley, a general partner at Battery Ventures. “The market has gone from venture people sitting in their office, waiting for whatever company to come and pitch them, to chasing the companies that everyone else wants to invest in. If you’re part of that inner crowd, life is very good and there’s lots of money being thrown at you.”

But you need some imagination to get there.

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Venture Heavyweights Sit Back as Deal Sizes Soar

Hanging Boxing GlovesIt’s been a banner week for a number of Internet companies.

Last Wednesday, social network Pinterest acknowledged closing on a $225 million round that valued the company at $3.8 billion. Shortly thereafter, AllThingsD reported that Snapchat, the messaging app, is now weighing a $200 million investment round that would value the company at $3.5 billion. And just yesterday, NextDoor, a social network for neighbors, raised $60 million in fresh capital.

But the reality is that some of today’s biggest venture heavyweights have pulled back dramatically on late-stage deals.

Two weeks ago, during a visit to Andreessen Horowitz, Marc Andreessen told me his firm has “done almost no growth investments in the last year and a half.”

Yesterday, Ravi Viswanathan, who co-heads New Enterprise Associates’ Technology Venture Growth Equity effort, told me much the same. “If you chart our growth equity investing over the last few years, it’s been very lumpy,” said Viswanathan. “Last year, I think we did four or five growth deals. This year, I don’t think we did any.”

That’s saying something for a firm that is right now investing a $2.6 billion fund that it raised just a year ago.

Andreessen attributes his firm’s reluctance to chase big deals to an influx of “hot money.” The partnership is “way behind on growth [as an allocation of our third fund],” Andreessen told me, “and that’s after being way ahead on growth in 2010 and 2011, because so many investors have come in crossed over into late stage and a lot of hedge funds have crossed over, which is traditionally a sign of hot times, hot money.” He added, “What we’re trying to do is be patient. We have plenty of firepower. We’re just going to let the hot money do the high valuation things while it’s in the market. We’ll effectively sell into that.”

That’s not to say later-stage deals don’t have their champions right now. At this week’s TechCrunch Disrupt conference, venture capitalist Bill Gurley of Benchmark told the outlet that “a global reality is that some of these companies have systems, they have networks in them, that cause early leads to always play out with really huge platforms.” People “laugh or write silly articles about the notion of a pre-revenue company having a very high valuation,” added Gurley.  But “if you talk to some of the smartest investors on Wall Street, or go talk to guys like Lee Fixel or Scott Shleifer at Tiger, they’re looking for these types of things. They’re looking for things that can become really, really big.”

Still, Viswanathan’s concerns sound very similar to Andreessen’s when I ask him why NEA has pulled back so markedly from later stage investments.

“It’s an amazing tech IPO market, and that drives growth,” Viswanathan observed. “But I’d say the growth deals we saw last year [were] elite companies getting high valuations. There are still great opportunities out there. But right now, it feels like there are high valuations even for the lesser-quality companies.”

Photo courtesy of Corbis.

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Marc Andreessen: Stories About Silicon Valley “Crack Me Up”

006_mark_andreessenSilicon Valley has been receiving a lot of unfavorable media attention in recent months, from Valleywag to New York Magazine to The New Yorker. Last week, during a sit-down with Marc Andreessen at the Sand Hill Road offices of his firm, Andreessen Horowitz, we discussed some of that coverage, and what he makes of it. Part of our conversation, lightly edited for length, follows. 

There’s a lot of hand-wringing in the media lately over whether or not Silicon Valley takes into mind the broader economy. Do you think some of those criticisms are valid?

The stories crack me up. There’s sort of two criticisms. One is that Silicon Valley is the new elite, the new one percent, the new oligarchy, and that all the billionaires don’t give a shit about society and [welcome a] Mad Max dystopian wasteland of no jobs [as] technology takes everything over.

The other argument is that technology produces nothing of value; it’s all just Snapchat apps so 14-year-old girls can send selfies to each other. I have a hard time reconciling the two arguments.

What of the argument that the Valley is building technologies that are primarily of value to a subset of people who can afford to use them?

That I don’t agree with. I think that’s almost just Uber, or the early-delivery services.

If you’re a journalist and come to Silicon Valley and you want to find three startups [whose services] only 25-year-olds and single people with discretionary income are ever going to use, you can do that, congratulations. If you want to come to Silicon Valley and find companies that are really going to open up access to transportation or education or financial services to people who haven’t had access to those things before, you can also do that.

These stories are very well-written and they’re entertaining, but they’re typically written by someone outside the Valley who wants to reach a certain conclusion to make them and their readers – in my view – feel better. I think it’s very reassuring, especially to people in New York right now, to think the Valley is just a bunch of kids farting around. But it’s only one slice.

Another widespread criticism is that tech entrepreneurs don’t give back enough. As a philanthropist, what do you think?

With tech — and you see this with a lot of these new entrepreneurs — they’re 25, 30, 35 years old, and they’re working to the limit of their physical capability. And from the outside, these companies look like they’re huge successes. On the inside, when you’re running one of these things, it always feels like you’re on the verge of failure; it always feels like it’s so close to slipping away. And people are quitting and competitors are attacking and the press is writing all these nasty articles about you, and you’re kind of on the ragged edge all the time. So to try and figure out how to find the time to intelligently allocate philanthropic capital, like, it just does not compute. It’s a timing issue.

Many founders I know, including a lot of really young founders, fully plan to give the vast majority away. They just plan to do it when they have time to do it properly. You could make the reasonable argument that the world would be better off if they gave the money away faster; it just begs the question of how, which is a harder question to answer. Even Warren Buffett couldn’t figure out how to do it without just giving it to Bill Gates. Maybe the answer is just give all the money to Bill Gates!

Photo courtesy of BusinessWeek.

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Andreessen Horowitz Backs Out of Seed Investing

A16zThere’s been a lot of back and forth in recent weeks about whether or not the venture firm Andreessen Horowitz is dialing back on certain types of Series A investments. But cofounder Marc Andreessen suggests a bigger shift is the firm’s decision to get out of seed investing, except when presented with “fringe” opportunities. 

Andreessen explained the firm’s thinking during a sit-down last week at his Sand Hill Road office. Our conversation — which we’ll run more of this week — has been edited slightly for clarity.

You think companies have to compete against themselves to stay innovative. How is Andreessen Horowitz continuing to innovate?

Probably the biggest change is that we’re pulling back significantly on the number of seed investments we’re making. We’ve had this policy, which all [venture] investors have, which is that if we invest in the [Series A or later] stage, we’re not going to invest in a competitive company, because that’s very damaging to an entrepreneur. For seed, we’ve always been explicit that if we’re putting in $50,000 to $100,000 [we can invest in competing companies, too].

Which can still create signaling issues, of course. Isn’t that why you’d launched a scouting program, using entrepreneurs to quietly seek out seed deals on your behalf?

We tried for a while to minimize [signaling damage] through the scout program; that was one potential layer of interaction that we thought would help. We also tried briefly to have this A16z seed brand and under that program, we could make multiple bets in one category.

Nobody can really do seed investing with a conflict policy because it’s all so uncertain at that point. You don’t have any idea what these companies are going to be doing in a year, much less whether you’re investing in the right one. And you’re putting very small amounts of money to work, so if you can only invest in one [startup per] category, you could never make many investments.

So what changed?

What we tell everybody is we don’t take the conflict policy with seed investments. But [entrepreneurs] don’t necessarily hear us, and it causes them problems anyway and makes them feel bad.

Also, the outside world doesn’t necessarily understand the difference. So we think there are more and more entrepreneurs at the seed stage who don’t want to talk with us because they think we’re already invested in a competitor. They think we’re conflicted out of the category. And they don’t differentiate between the seed and venture category. So we’re backing off of the number of seed investments we make basically to prevent that problem from getting worse.

What will happen instead?

One, we’re going to work even more closely with a bunch of the top-tier seed firms to be an even better source of deal flow for them. There’s also stuff we’ll do with seed companies to help them out without actually having investment stakes. We’ll kind of do favors, build a relationship [with them].

What we will back is fringe, where you couldn’t even conceive that there will be a competitor. So something that looks really nuts becomes very attractive for that program, which, arguably, is the best thing to invest in at the seed stage, because the whole point of the seed investments is to learn. ‘Here’s a brand new idea: Is it going to work. Is it not going to work? Is this person for real or are they crazy?’ You kind of want to figure that out before you write the big check.

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