Essay on Andreesen Horowitz: Investing in the Future of Technology & Innovation

Introduction

Marc Andreessen and Ben Horowitz founded the company in 2009 as a venture capital firm for backing up brave entrepreneurs constructing the future using technology. The company was launched at Silicon Valley in California. The firm is stage skeptical and engages in the investment in seed to late-stage technology companies, enterprise, crypto, fintech, across consumer, and healthcare spaces (Andreessen & Horowitz, 2020). The company entails management of 12 billion dollars in assets across numerous funds that includes 865 million dollar Crypto funds, cultural leadership fund, and 1.4-billion-dollar bio funds.

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The leadership of a16z encompasses overall partners of former CEOs, founders, or CTOs of prosperous technology companies. They are equipped with a vast knowledge of crypto, security, biology, marketplaces, distributed systems, and financial services. The objective of the company is to link the investors, executives, entrepreneurs, industry experts, engineers, academics, and others in the technology network (Andreessen & Horowitz, 2020).

The company has constructed an ecosystem of specialists, including executives, technicians, marketers, media resources, fortune 500, and other decision-makers of technology, vital opinion leaders, and influencers. The ecosystem plays a role in assisting the company in fulfilling the commitment of helping the businesses in growing the portfolio companies (Andreessen & Horowitz, 2020). The teams in operation provide access to expertise and intuitions across the whole range of company building to the entrepreneurs.

Kohlberg Kravis Roberts

KKR manages numerous alternative asset categories, including the energy, credit, private equity, real estate, credit, and infrastructure investment firm with tactical companions that lead hedge sums of money. The company has the objective of generating good-looking investment earnings by using a disciplined and patient approach, hiring high-quality personalities, tracking for the highest standards, and lignin up the interests as per investing partners (Roberts, 2020). The company is uniquely constructed in the structure and business model with a close relationship between the third party capital balance sheet and capital markets business.

The company's capital market business offers a whole variety of services, including underwriting new deals, syndicating debt, taking companies public, and syndicating equity. Additionally, the company possesses a long-dated capital in their funds prepared to organize across a broad category of assets. Independently, the businesses and funds produce returns for the fund investors and stockholders, which, when paired, develop a dominant competitive benefit (Roberts, 2020). The significant differentiator of the company is the balance sheet which enables the aligning of interests with fund investors, create a new investment approach, and sustain the present and reach strategic transaction on their behalf.

Partnering with the company is advantageous to the extensiveness and specialization of the whole firm, and all the company's businesses work for investors in their funds. The partners are also offered access to spans of operational and financial knowledge, broad industry and regional specialization, intuition for geopolitical and worldwide macro trends, and worldwide influential network relationships within and outside the firm (Roberts, 2020). The company assists fund investors in achieving their investments objective by offering financial answers and investment vehicles through an integrated approach.

Ratio analysis

Kohlberg Kravis Roberts, there was an alternate rise and drop in the profit margin reaching a peak in 2019 of 26.98. In comparison, the Andreessen Horowitz is making positive progress and recording the highest ratio of the asset while the Kohlberg Kravis Roberts is making losses with the peak reached in 2015. Andreessen Horowitz had a steady increase all through the five years range while inter-con security experienced alternate rises and drops.

The analysis implies that Andreessen Horowitz is becoming more profitable over the years, while Kohlberg Kravis Roberts is making losses. Kohlberg Kravis Roberts appears to be facing increased risk, which is the opposite of the Andreessen Horowitz. The efficiency of Andreessen Horowitz is contrary to the Kohlberg Kravis Roberts company. The companies are assisting the customers in the preparation of returning to normalcy through strategic elimination of risk and proper planning. The companies are also implementing the best practices on workplace traffic flow, signage, and guests' traffic flow and upholding to clean and sanitized workstation. They are also practicing the pre-screening the temperatures of anyone entering their facilities.

Impacts of the pandemic on the firms

KKR cautioned the outcome of the COVID-19 pandemic possibility of reducing the valuation of the company's investments and capability of marketing new funds, which would result in a negative impact on business performance. The company decided to reduce the value of the valuations from December 31st 2019, prior to the predictable present revenue decrease of the privately held portfolio companies and lowered the value of portfolio traded in public (Ngoc, 2020). The declines, therefore, would result in a negative impact on the total value of the company's investment portfolio and book value per share, accumulated carried interest, and managed assets.

The continuation of the pandemic in the second quarter would intensify the adverse effects on the company business, operational results, and financial performance for the whole of 2020 (Ngoc, 2020). The company announced relief creation of a 5O million-dollar fund for backing the health workers, first responders, and small businesses and worker's relief within the firm's investments.

Andreessen Horowitz company offices in Silicon Valley cautioned with a sign on the door the ready startup founders and business partners to stop handshakes. The founder of the company, instead of lamenting the pandemic situation, said that It was time to build (Schubarth, 2020). He said that the situation solution was brave innovation and leadership loosely attached to the political self-importance. The medical equipment, therapies, vaccines, and masks provision is not a hard thing. The founder asked for more demands from the entrepreneurs, investors, CEOs, and political leaders in the building. Research from his blogs shows that together with Microsoft, the co-founder predicted the present pandemic, and the company seems prepared to face the situation.

References

Andreessen, M., & Horowitz, B. (2020). About - Andreessen Horowitz. Retrieved May 10th, 2020, from https://a16z.com/about/Ngoc, N. (2020). KKR warns of impact on fundraising, portfolio due to COVID-19. Retrieved May 10th, 2020, from https://www.dealstreetasia.com/stories/kkr-covid-19-184524/

Roberts, K. (2020). KKR Today | KKR. Retrieved May 10th, 2020, from https://www.kkr.com/kkr-todaySchubarth, C. (2020). Retrieved May 10th, 2020, from https://www.bizjournals.com/sanjose/news/2020/04/20/marc-andreessen-says-it-s-time-to-build-but-doesn.html