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>Of course he wishes he had got into successful companies even earlier. Everyone wishes that. Unfortunately, I made it sound like MA's thoughts about Airbnb wa
by jasode 10y ago
>Of course he wishes he had got into successful companies even earlier. Everyone wishes that.
Unfortunately, I made it sound like MA's thoughts about Airbnb was a generic "invest earlier means more money" cliche. I intended to show how AirBnb contrasted with Oculus VR. They passed on the early rounds for those 2 companies for different reasons.
For AirBnb Series A, Andreesen didn't understand the value. It was a gap in knowledge/imagination about what AirBnb could be. It was not because of a "we're a late-stage not Series A investor so come back when others have already invested in you".
For Oculus Rift Series A, a16z got the value of it, but they weren't sure about it gaining traction while the company was trying to solve the motion sickness issues. They let the other VCs take on that risk and they knew ahead of time they'd pay more to get in on the next fundraising round.
Based on their actions and interviews, it's possible that AH's primary investment thesis is Series B or later but I'm not sure you can beat Sequoia and Benchmark with wait-&-see late-round investing at sky high valuations. Those other VCs hunt aggressively to get in on Series A. Part of the prestige for a VC firm is to be seen as a leader and not a follower.
- inputcoffee 10y agoI will just re-iterate that the letter of the round is not as important as the valuation, and the amount invested, in determining what "stage" the investment is. I accept that they passed on the two different Series A rounds for two different reasons, although I am not sure what lesson I can draw from that. In terms of your last comment, yes they absolutely cannot beat the returns of the early stage investors (whatever Series that may be), but presumably they're compensated by lower risk, which is the main point I was trying to make.