Right, but the real question is: what are their returns? (And: how do they compare to VC as a whole?, how do they compare to long-term US treasury bonds?, how do they compare to the S&P 500?
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Amen to that. What these guys do best, or seem to focus most of their energies on is PR.
If they're so great, please show us some returns vis a your competitors and other asset classed with similar risk profiles.
Don't have the most recent numbers but http://fortune.com/2012/07/24/nice-ira-andreessen-horowitz-r... It would seem they've done quite well.
Besides the fact that Skype was an exceptional insider deal these numbers can be misleading ("twice over" for a 10 year fund is about 7% a year and IRRs are distorted when money is returned early because you are not getting that return for the remaining period of investment).
Also, if we're looking at the 2009 onwards, the S&P500 has returned an average of 18%, a 2.28x return.
(2009 - 2013 figures from here: http://en.wikipedia.org/wiki/S%26P_500#Total_annual_returns)
But insider deals are a key part of venture.
The point is a Skype-type no-shop deal is unlikely to be replicated.
As linked, AH's first fund had an IRR in the 30% range for 3 years which blows away pretty much every other asset class. I'm sure Accel, Founders, Sequoia, Benchmark, etc are doing even better.
You can't look at venture averages because the best firms are easy to identify and perform much better than average.
Three years is a very short timespan from which to make claims about asset classes. In most cases, seven years is considered the minimum for a true sampling of baseline performance; ten years is better, and more than ten is better still. Obviously a16z hasn't been around for ten years, so metrics like three-year IRR are the best we have. That said, it's silly to take a three-year IRR and benchmark that confidently against something like the S&P 500.
On the other hand, I would strongly suspect that the top VC firms massively outperform the VC industry as a whole, due to any number of factors, including deal access, ability to secure favorable terms, ability to make new rounds or exits happen, etc. In time, a16z's longitudinal performance may well beat the market. But it's way too early to call the ball.
I agree that you can't really look at the aggregate performance of the entire VC industry. It's probably a highly skewed distribution, with almost all the big returns going to a handful of funds.
I don't know about that. Over that time period, post 2008 crisis, many funds (PE, fixed income focused HF's and equity funds) did very high returns as most asset classes bounced back from the crisis depths. Helped along, of course, by unprecedented money printing and credit expansion by the Fed.
They've existed for 7 years(barely). Most of their investments would be way too early to tell the results of.