• Ben Horowitz on the “Irrational Desire” to Succeed

    Ben HorowitzFor people with Andreessen Horowitz fatigue, things are about to get worse with the publication of co-founder Ben Horowitz’s new book, The Hard Thing About Hard Things.

    Here’s the hard truth: the book is outstanding. This reporter has never met a business tome she could finish; not so with Horowitz’s newest effort, which manages to be equal parts entertaining, harrowing, and instructive as both a business manual and as an autobiography. Even the pacing is excellent, helped in part by both emails and exchanges, like this brief conversation with Horowitz and longtime partner Marc Andreessen as their company, LoudCloud, appeared to be at death’s door: “Do you know the best thing about startups?” Andreessen asks Horowitz. “What?” “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

    Horowitz talked with StrictlyVC about his new book late last week. Our conversation has been lightly edited for length.

    Some authors hire research teams to help with their books. Did you have support in writing this?

    I wrote it. It was a hard thing, but I kind of had to do it. [Freelance editor Carlye Adler, who recently co-authored a book with Yahoo’s chairman, Maynard Webb] edited it, so she kind of fixed a few things like grammar. The most corrections [owed to] my general tone, which was a little casual for the book. [Adler tweaked things] so it wouldn’t sound too street. [Laughs.]

    What made you think, okay, next month, I’m going to sit down and start work on this thing?

    It was combination of stuff. I kind of had this concept in my head, but the problem with management advice is that it’s highly related. Management is very dynamic, very situational, so any advice you give is based on your [experience]; it’s not general advice. People try to generalize it — and I try to generalize it, too — but without knowing where it comes from it’s not nearly as useful. So I thought the stories about where it came from and what I got out of it [would be helpful]. I had been planning to publish them [as blog posts]. But after [publisher] Hollis Heimbouch at Harper Collins found me on Facebook, I thought it might work better as a book.

    You’ve said the book’s proceeds will go to the American Jewish World Service to support women’s rights globally. Does that include your advance and royalties? For some perspective, can you share how much you were offered to write this book?

    The contract is confidential, but yes, it’s all going to AJWS.

    How long did it take you to write the book?

    It’s funny because when it first came up, I like was like, “I need to take a little time off to do this.” And everybody immediately said, “No. You cannot. You have to be here.” So it took a little longer than I would have liked, a little over a year. It was definitely a nights and weekends kind of thing, and I’d find some time in the day. But it was good because I remembered stuff in bits and pieces. There’s a story about [LoudCloud’s struggle to go public], when my wife was sick [with an extreme allergic reaction], and that was such a traumatic experience, I’d sort of blacked it out in my memory; it kind of [came back to me] late in the process.

    You have a lot of rich, detailed material in the book – dialogue, emails. Did you solicit help from your friends and acquaintances?

    Carlye helped me quite a bit with this. I’d made a list of all the people I’d worked with over the years, and she interviewed them about their experience and some of [the book material] came out of those interviews.

    The second half of the book provides pretty concrete advice for operators in a wide variety of tricky situations, though you don’t spell out how to engender loyalty. Many people from your past companies – John O’Farrell, Scott Kupor, Marc Cranney – wound up at Andreessen Horowitz. What’s the trick?

    If you really believe in the people who are working in the company and you believe they can be more than they can be — even more than they themselves think they can be — that comes through. And then if they grow [into that expectation], it becomes a very strong bond.

    I did an attrition survey at Netcape [Horowitz was put in charge of its enterprise Web server product line at age 29], and people leave companies for two reasons: People either hate their manager – that’s number one – or they’re just not growing or developing. Training is important, but it’s really about what the CEO believes about you. If the CEO doesn’t believe in what you can become, it’s hard for you to become it.

    When it comes to being a great CEO, what would you say are the top three qualities in order of importance?

    The number one thing is you have to have an irrational desire to build something. Any kind of rational reason for being in it gets pretty screwed up over time, because you end up in very bad situations now and again. I’d say the second quality would be the ability to find your courage at some point — the ability to stand up to a lot of pressure.

    And not quitting is probably number three. I think the only reason I stayed [with Opsware, which Horowitz essentially yanked from the ashes of LoudCloud and eventually sold for $1.6 billion] is that I didn’t quit; I stayed at it long enough that it worked out.

    You recently published an anecdote on your blog, which didn’t make it into the book, about how you avoided an options backdating scandal by not taking the advice of a well-regarded CFO you’d hired.

    Yes. People called the character and harassed her. She was actually grateful for the way I portrayed [what happened].

    Is there any danger that other characters in your new book will make a fuss? You write about one executive who was “born in the oilfields of Oklahoma, graduated from West Point, and was in charge of anyone who touched any servers at EDS,” which was one of your biggest customers at the time. We later learn that he lingers at airport bars to escape his work and family.

    I tried to run a lot of stuff by as many people as I could, because I [didn’t want to upset people]. I’ll bet I missed some, though. I think my biggest fears are that, and the acknowledgements. I know I didn’t acknowledge people who were a huge help, and I just don’t know how to go back [and do that now].

    How much of your adventures at LoudCloud and Opsware would you say owe to luck versus quick, reactive decision making?

    Luck played a major role. We had so much bad luck early – an overwhelming amount of bad luck – beginning with the whole change in macroeconomics. [LoudCloud raised tens of millions of dollars months before most of its customers were done in by the 2000 dot.com implosion.] Then we had tremendously good luck [i.e., Opsware’s eventual sale to Hewlett Packard].

    There’s no question that if a couple of things had gone a different way, we wouldn’t have made it.

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  • VCs and Twitter: A Simple Relationship Turns Complicated

    VCs on TwitterOver the weekend, New York Times reporter Jenna Wortham wrote of Twitter that it “seems to have reached a turning point, a phase in which its contributors have stopped trying to make the service as useful as possible for the crowd, and are instead trying to distinguish themselves from one another.”

    If Wortham is becoming disillusioned with the platform, she’s hardly alone. Even venture capitalists – among Twitter’s savviest and earliest users –no longer view Twitter with the same zeal they once did, with a growing number turning away from the service for longer periods of time, if not logging off altogether.

    Chris Dixon of Andreessen Horowitz talked with investor-entrepreneur Semil Shah last November about why he no longer tweets as actively as he once did. “I actually think Twitter has changed,” said Dixon, whose tweet count is nearing 15,000. “Part of it is Twitter just got more popular…For me, the golden days of Twitter were 2010 maybe, 2011, where it was a bunch of early adopter/startup people…now, everyone realizes that if you say something wrong, it’s going to be excerpted and put on Business Insider…so I just think everyone is vastly more on guard, and it’s just not as fun.”

    On New Year’s Day, another power user, Shervin Pishevar of Sherpa Foundry, announced that after an astonishing 34,777 tweets dating back to 2007, he’d decided to “take a break” – for all of 2014. It was time to “disconnect from this overtly present present and live in the moment more,” Pishevar wrote on Medium, the newest publishing platform launched by Twitter’s cofounders.

    In a more recent renouncement of the platform, Paul Lee, a general partner at Chicago-based Lightbank, tweeted last Wednesday that he was “Going to be taking a break on twitter for a while (at least trying).”

    When afterward, I asked Lee why, he explained that Twitter “ended up taking a lot of mindshare and creating a lot of noise in my head.” Though Lee consumes more than he publishes (over the last six years, he has sent 2,342 tweets), he finds Twitter just as distracting as someone who more actively participates in conversations.

    “Imagine you’re in a meeting and you have eight people sitting on your shoulders,” he said. After logging on, even for brief periods, “It kind of felt like that. My mind was going 100 miles per hour.”

    Plenty of VCs still actively use Twitter, of course. Homebrew cofounder Hunter Walk says that among the ways it helps him as an investor is his ability to share his thoughts, meet new people, and “lazyweb” questions about who is working on what.

    Walker, who says he spends “toooo much” time on the platform (he has composed more than 18,000 tweets), says it doesn’t exhaust him primarily because he tries to use it “as a human being who also happens to be a VC.”

    Josh Felser, a cofounder of Freestyle Capital, similarly says that his approach is not to overthink things but rather “say mostly whatever I want.” Felser (12,600 tweets) also notes that Twitter is “helpful in building my business brand” particularly given that “most entrepreneurs are on it.”

    Lee acknowledges the same value in Twitter that Felser sees. In fact, he says Lightbank has funded two startups that it sourced through Twitter. “So from a branding perspective – meaning branding of [Lightbank] and self-branding – it’s been really effective.”

    Still, Lee says he’s prepared to avoid it for a while, even if he’s uncertain for how long. “It’s only been a few days,” he told me Friday morning. He said he was already feeling “less tied to it, less compelled to check it.” But he was also quick to call it “an experiment. I don’t want to get ahead of myself.”

    Meanwhile, the Twitter fatigued might pay special attention to Marc Andreessen, someone known for the shrewd way in which he has marketed his venture firm. A big fan of “counterprogramming,” Andreessen has taken to Twitter with great relish over just the last month.

    In the six years prior, he sent out two tweets.

    Correction: The original version of this story referred to Wortham by her Twitter handle, @jennydeluxe.

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  • A Storyteller Wades Into a Crowded Market

    BevelKitTristan Walker is a rarity in Silicon Valley. He’s a gifted storyteller who intimately understands mobile and social media, having interned at Twitter before joining Foursquare, where he led business development for three years.

    Those talents will come in handy, as Walker pulls the cover off his eight-month-old startup, Walker & Company, revealing its first product to be … a shaving kit.

    Worth mentioning straightaway: This is an exceedingly nice shaving kit. In addition to a pure brass handle and German-made blades, each kit comes with rich pre-shave, shaving, and after-shave lotions, all tucked thoughtfully into an elegant box that’s designed to take 2.5 seconds to open. (It builds anticipation, Walker told me during a recent visit to the company’s offices, located a few miles from Stanford University.)

    Priced as the kit is — a user pays $59 for his first, three-month supply, and $29 per month thereafter — it seems reasonably accessible, too, particularly considering the growing percentage of men willing to spend on grooming. According to the research company Mintel, the share of personal care products designed for men has grown to to 5.6 percent from 4.6 percent over the past five years.

    Still, to break into a crowded market that already features both high-end competitors and affordable alternatives, Walker needs a compelling story, and he has one that he tells well. As he explains it, black, Latino, and Asian men and women have few personal care options beyond the “ethnic aisle of Walgreen’s,” where they’re left to examine which “dust-covered” product might be remotely suited for their hair texture or skin needs. To underscore his point, Walker, who is African-American, shows me an off-the-shelf hair-care product featuring a balding black man wearing a bath towel.

    It’s that underserved market that inspired Walker & Co. The company’s shave kit, for example, has a single blade construction that’s particularly ideal for African-American men, who often struggle with extreme razor burn irritation because their facial hair tends to be curly.

    Yet the kit is just the start, says Walker, who observes that people of color will represent the majority of American in the not-too-distant future, as well as that they tend to spend more than other demographic groups on personal care products. (Black women, who represent just 6 percent of U.S. population today, account for 30 percent of hair care spend, says Walker.)

    Little wonder Walker is already imagining products such as high-end shampoos suited for the dry hair of African-American women, or skin-care products that address hyperpigmentation.

    And none will be relegated to a drugstore aisle, says Walker, who is employing a direct-to-consumer e-tailing strategy, along with reaching people where they gather online. (Among other examples: the urban style blog Street Etiquette will soon begin publishing grooming content co-created with Walker & Co.)

    Eventually, Walker & Co. — whose investors include Andreessen Horowitz, SV Angel, Upfront Ventures, and Sherpa Foundry — will also sell its products offline, says Walker. But telling the story comes first, and the shaving kit is not the story; it’s just the prologue.

    “This is about fundamentally enabling access. It’s about making things more practical and delightful at the same time,” says Walker.

    Traditional consumer packaged goods companies have had their chance, he suggests. Walker & Co. is “going to create the experience that [people of color] deserve.”

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  • 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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  • 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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  • Marc Andreessen: We’ve “Kicked Around” Doing a Hedge Fund, Too

    marc-andreessenThis week, I headed to Sand Hill Road to sit down with venture capitalist Marc Andreessen of Andreessen Horowitz, who is expert in keeping the media on its toes. His willingness to engage with the press – which has probably generated more public interest in venture capital than ever existed previously – is meant to crush the competition. As he told me years ago in a separate sit-down, “We like counter-programming. If there are three networks showing cop drama shows on Thursday at 9 pm, then what you want to do is put on a comedy.”

    Next week, I’ll feature excerpts from our hour-long chat in which Andreessen touched on other ways Andreessen Horowitz is trying to out-innovate its venture peers, so be sure to tune in. In the meantime, here are two quick snippets from our conversation. In the first, Andreessen and I chat briefly about Twitter, a company that will make Andreessen money both personally and professionally. (Andreessen was among Twitter’s earliest individual investors, participating in the company’s $5 million Series A. As a firm, Andreessen Horowitz elbowed its way into Twitter in early 2011 by purchasing $80 million worth of secondary shares; Twitter was valued at roughly $3.7 billion at the time.)

    Andreessen Horowitz prides itself on being fairly transparent. Yet you’ve tweeted twice – once, more than six years ago, to write “Twittering,” and about three years later to add, “I’m back – did anything happen while I was gone?” Why don’t you use it?

    [Laughs.] I don’t know that I even have a good reason for it. I was a very active blogger at one point. I’m actually very active on Hacker News. I was very active on Quora for a while. So I just kind of bounce around, do different things.

    At this point, at this firm, it’s more interesting for the other people to become more well-known, rather than me becoming more well-known. So it’s not a big priority for me to elevate my own brand. Plus, I’ve always thought it’s kind of funny.

    Funny in what way?

    [Laughs.] I don’t know. It’s just really funny. I was one of the first investors. And then I tweeted. And then I didn’t tweet. [And 900 days later], I tweeted again.

    You have something like 18,000 people following you, waiting for your next tweet.

    18,000 people. Two tweets. [Laughs again.] It’s just kind of funny.

    In this next snippet, Andreessen shares that his firm has more recently contemplated starting a hedge fund.

    You’re managing $2.7 billion at this point, but it’s been a couple of years since you raised your last fund. Will we see a new fund in 2014, and might we see a $2 billion or $3 billion fund?

    [We’ll probably raise a new fund] next year. [As for that range], I don’t think so. We’ve kicked around a couple of ideas. We’ve kicked around doing something on the public side like a hedge fund, but we’re not going to do it.

    Why contemplate it?

    First of all, there are public companies we greatly admire…that we feel are undervalued or misunderstood. Also, in the venture fund, we’re trying to go long in the future, and so the other side of that would be to go short in the past, or to short the people who are not long in the future. So if we’re doing e-commerce in a category and think there’s a retailer that will suffer as a consequence of e-commerce becoming bigger, there’s another trade you could do on the hedge fund side if you’re private.

    But…

    There are two really big issues with a firm like ours doing anything public. One, we think the insider trading risk is just off the charts. I saw that Mark Cuban just got off for the Mamma.com trade, and I’m very happy for him, but it’s a good illustration of how dangerous an environment it is for people who are kind of in the middle of things to take stock positions right now. There are just tons of prosecutions – the whole SEC thing – there’s just tons of scrutiny.

    The other issue is we have this whole corporate briefing program, where you have 1,200 management teams from big companies coming through here every year and we run these big conferences. We just held our big CIO/CMO conference last week, with 150 top CIOs [and] CMOs, and it’s an amazing program and they’re really open with us about what their challenges are and what they’re working on and trying to do, and so, if we started to short their stocks…[laughs]…right? We’d basically blow that program up. So we decided we can’t do a hedge fund.

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