One of Silicon Valley's best-known venture firms, Andreessen Horowitz, saw its performance slip significantly after the blockbuster results of its initial fund, internal data show, illustrating just how cutthroat venture capital has become as even big names struggle to deliver outsized returns.
The funds the firm raised in 2010 and 2011 showed a net internal rate of return of 16% and 12%, respectively, as of Sept. 30, 2018, according to an internal report on Andreessen Horowitz prepared by one of the firm’s current limited partners and seen by The Information. During those years, Andreessen Horowitz’s limited partners—the pension funds, university endowments and wealthy individuals who put money into its funds—could have done about as well investing in common stock market index funds.
The results are a significant drop from the 44% return rate of its 2009 fund, which benefited from an investment in Skype, the internet telephone-calling company that Microsoft acquired in 2011 for $8.5 billion.
