DOJ reportedly investigating Andreessen Horowitz board seats at rival startups
The U.S. Department of Justice has spent nearly a year investigating venture firm Andreessen Horowitz over partners sitting on the boards of companies that have become competitors, invoking a rarely used century-old antitrust law.
The U.S. Department of Justice has reportedly been investigating venture capital firm Andreessen Horowitz (a16z) for close to a year over a practice involving its partners' board memberships at rival companies. Partner Ben Horowitz sits on the board of data platform Databricks, while partner Martin Casado sits on the board of data integration company Fivetran. Over time, the two companies have grown into competitors of each other.
The investigation reportedly relies on a 112-year-old antitrust law that is rarely applied to venture capital firms. Board-level conflicts of interest are not a new phenomenon in venture capital, and the two companies were not necessarily direct rivals when a16z first made its investments in them.
Shifting boundaries between portfolio companies
The situation has evolved as the portfolio companies expanded into each other's markets over time. This raises a broader question for the venture capital industry: how should firms manage overlapping board seats when the lines separating their portfolio companies' markets keep shifting?
The matter was discussed in detail by TechCrunch journalists Kirsten Korosec, Anthony Ha and Sean O'Kane on an episode of the Equity podcast, alongside other news from the week in the industry. Specific findings or potential consequences of the investigation for a16z have not been disclosed.
