Ideal start for a VC - Founder relationship

And how sounding boards makes it to the board.

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In 2006, Mark Zuckerberg got an offer from Yahoo for a Billion dollar acquisition. We know that all the investors and board members told 'sell' and Mark rejected this offer.

However, this one person advised Mark not to sell. His name is also Marc. Meet Marc Andreessen, General Partner at a16z. As a result of this good advice, Marc Andreessen joined Facebook’s board in 2008.

Here's a little background about Marc Andreessen.

Remember this browser Netscape? He developed it and sold it to AOL for $4.2 Billion in 1998. He and his friend Ben Horowitz who was Vice President at Netscape, started Loudcloud and sold it to HP for $1.6 Billion in 2007.

Together they started investing in a bunch of startups as Angels. In 2009, both of them started a VC firm Andreessen-Horowitz (now a16z). They invested in Instagram, Oculus, Twitter, Linkedin, Github, Slack, and Coinbase, to name a few.

Back to the story, Andreessen was just a sounding board to Mark Zuckerberg initially. Andreessen had nothing more to do with Facebook but he understood 22-year-old Mark Zuckerberg's pressure and told him not to sell when he got Yahoo's offer. Both of them bonded really well.

He joins FB's board in 2008.

It gets interesting after Andreessen joined FB's board. He helped broker a Facebook partnership for Skype when Facebook integrated Skype for video calling.

Later, When, Facebook bought Instagram, Andreessen Horowitz made $78 Million dollars from $250k invested. When Facebook bought Oculus, they made $600 Million dollars from $75M invested.

Andreessen Horowitz invested in pre-IPO companies including FB owning 6 Million Class B and 5 Million restricted shares. Facebook (Meta) went public in May 2012 and the VC firm ended up making a lot of money.

Mark Andreessen helped Zuckerberg even when he had no give/take. Look at the stuff Andreessen Horowitz gained by being supportive in just one situation.

Sometimes you won't even know when some of your favourite mentors/ sounding boards would become your investor. And as a founder, you might be the one returning their entire fund.