How To Invest In The Next Big Thing
Ben Horowitz co-runs one of the hottest VC firms in the Valley--raising $2.7 billion in its first three years and helping companies such as Bump, Facebook, Foursquare, Groupon, Pinterest, Twitter, and Zynga. His method is to invest in companies with founding CEOs who are still in place and then mentor them, rather than rush to bring in "adult supervision,” as many VC firms do.
* "I had a CEO who had offered this new engineer three-quarters of a percent of the company, but he wanted more. He was screwed over at his last startup. And the CEO didn't know what to do. I asked, ‘What'd you give other guys at his level?' Three-quarters. So that's what he should tell him: ‘You're not going to get screwed because nobody's talking me into paying more.' The CEO came back and said, ‘Done deal.' The engineer didn't want 1%. He was asking for fair. If you've been a CEO, you know. If not, you have to learn the hard way. We make some of the hard way the easy way.”
Joins Netscape, meets partner Marc Andreessen
AOL buys Netscape for $4.2 billion
Cofounds software company Loudcloud
Loudcloud debuts on the NASDAQ stock exchange
Sells Loudcloud's operations division to Electronic Data Systems; renames company Opsware
HP buys Opsware for $1.65 billion
Cofounds Andreessen Horowitz
Andreessen Horowitz invests $50 million in Skype
Microsoft acquires Skype for $8.5 billion
Illustration by Peter Oumanski
A version of this article appears in the June 2012 issue of Fast Company.