Their individual real estate decisions are one sign of a significant, if slow-motion, shift at their company, the prominent venture capital firm Andreessen Horowitz, or a16z. They started a16z in 2009 after selling a data center automation startup they co-founded for $1.6 billion. Over the next decade or so, the firm helped define an era in Silicon Valley’s tech and venture capital industries as they backed tiny startups that turned into multibillion-dollar businesses, with enormous economic and cultural implications. A16z has backed many of the world-beating startups of the past decade, including Airbnb, Coinbase, GitHub, Slack, and Stripe. (Bloomberg LP, which owns Bloomberg Businessweek, has invested in Andreessen Horowitz.)

The firm’s founders, while still active leaders with the ultimate responsibility for its strategy and direction, are no longer as involved in daily operations as they were in the early days, say people who have worked with the men and those around them. They’ve also begun to lower their involvement on corporate boards. Horowitz sits on 11 boards, down from 16 early last year; Andreessen’s biography lists 7 company board seats, including on Meta Platforms Inc., down from 11 three years ago. Andreessen and Horowitz declined interview requests through an a16z spokesperson, who also declined to answer questions about the firm.

Eoin Treacy's view

Regime change at private equity firms is virtually unheard of. The most successful companies tend to be led by visionary investors with a talent for spotting market trends and that is not easy to replicate through training. Anyone who has the skillset and connections, has more incentive to start their own firm than stay on. Passing the baton of leadership is a difficult challenge.

The decision by Sequoia to change their fund structure is also notable. They no longer wish to have time limits on their funds, so they can benefit from the longer-term appreciation of assets. That’s a bet the value will keep rising, but it locks investors in for a longer time. I wonder if this change is hubristic in believing the future will be like the past.

What is particularly interesting at present is how many founders and senior executives are stepping back from day-to-day operations. Many are also raising cash by selling down their overweight positions. Jeff Bezos and Bill Gates have stepped away, Warren Buffett and Charlie Munger have nominated a successor, Elon Musk, Larry Page, Sergey Brin, and Satya Nadella are all taking profits.

At least some of that action is in anticipation of high taxes but these actions also help to highlight how high valuations are. This is the time to pay particular attention to liquidity indicators and the willingness of central banks to squeeze liquidity dependent sectors. It’s not a challenge today but it may be something to monitor in 2022 and 2023.