Takeaways from Scott Kupor at Andreessen HorowitzBack to home
Today I was part of a group that chatted with Scott Kupor, Managing Partner and employee number one at Andreessen Horowitz. a16z, as the firm is known, is a well-known venture capital firm that helped start the trend of having a large operating team of specialized people support the needs of portfolio companies. As Managing Partner, Scott has helped steer the firm from $300 million in assets under management (AUM) to over $30 billion in AUM since 2009.
Scott had a lot of great things to share, but one thing especially stood out to me. He talked about the need for geographic diversity of VC investments. The Bay Area has historically been the center of the industry. This has created a challenging dynamic.
- Founders outside the Bay Area have a hard time getting funding. This means that founders working on problems experienced by broader society but not so much in the Bay Area are less likely to receive the capital needed to solve them. Said differently, some of society’s big problems go unsolved.
- Lots of people fishing in the same pond creates an interesting dynamic for return on venture capital investment. It becomes increasingly competitive as abundant capital chases scarce opportunities to invest in an exceptional founder solving a big problem. As the competition increases, the valuation increases. As the valuation increases, the potential return on the investment is reduced.
I totally agree with these points and all the other great ones that Scott made. He made a strong case for geographic diversity of venture capital investment. Hopefully Scott and the a16z team will spend more time getting to know Atlanta and its start-up ecosystem and learn for themselves why Atlanta is ranked the best place to live in the U.S.