Andreessen Horowitz, a venture capital firm that has just raised a $200m co-investment fund, is trying to shake up the traditional organisation structure so the partnership operates more like a corporation.
Scott Kupor, chief operating officer (COO) at Andreessen Horowitz, at VC65, an event celebrating the 65th anniversary of venture capital in the US, said venture capital currently primarily operates in a way similar to the agent/star model previously used in Hollywood, the centre of the US film industry.
VC firms usually have a single general partner dealing with the portfolio company but Kupor said they would be better off following Hollywood talent manager Creative Artists Agency which has specialists in different areas. He said the general partner could then say to entrepreneurs, "this is what I bring you: the firm and functional specialists".
Kupor added: "This is the modern corporation, with the chief executive as quarterback [leader of an American football team] with people in charge of research and development, sales, marketing and legal.
At Andreessen Horowitz, therefore, the group has Kupor as its COO allocating resources to portfolio companies from its functional areas of talent, marketing, research, business development and deal flow.
He said this model "gives no single point of failure" from relying too much on a partner and gives greater firm knowledge and specialisation and scale.
However, he said it led to questions for how to pay general partners versus the broader operations staff.
Last week, Andreessen Horowitz raised a $200m co-investment fund six months after closing its second venture fund at $650m.
Andreessen Horowitz was launched in July 2009 and now has $1.2bn under management but could have raised more as the latest fund was oversubscribed.
John O’Farrell, general partner at Andreessen Horowitz, said the co-investment fund would charge no management fees and invest exclusively in portfolio companies the firm had previously invested, including the more than 30 companies already backed, such as Facebook, Groupon, Jawbone, Box.net and Fusion-io.
O’Farrell said: "We have the firepower to meet their needs, no matter how big a cheque they are looking for.
"These companies have a substantial need for capital-they’re hiring aggressively, expanding internationally, making acquisitions, investing in facilities, pouring money into marketing-all to double down on their success and win the entire market.
"Often, they want to meet their needs with one new investor. The size of their market opportunity allows for very attractive returns for the investor they choose to work with."