Will someone take over Twitter (TWTR)? Silicon Valley venture capitalist Marc Andreessen wouldn’t say, but at a Fortune Brainstorm Tech dinner in San Francisco on Wednesday night, he weighed in on the latest (or lack of) acquisitions, valuations, diversity, and bubble talk with regard to the technology industry.
“I have been shocked in the last five years how little tech M&A there has been,” he told Fortune senior editor Dan Primack. “We’re in this environment of extreme risk aversion, and people are worried about returning cash to investors. Historically, there would have been more combinations.”
There has never been a more dangerous time to be an unprotected public company, Andreessen said. Which means companies must take the process of making an initial public offering quite seriously. “If you go public in this environment,” he warned, “God help you.”
Is Andreessen’s venture capital firm, Andreessen Horowitz, to blame for driving up valuations of private tech companies? He said that his firm routinely walks away from deals over valuations.
Although most would agree that the valuations of late-stage tech companies are skyrocketing, Andreessen said he doesn’t think valuations should be the main topic of discussion. It should be the substance of the company that’s the main topic of conversation.
Investor Bill Gurley has been sounding the tech bubble alarm for quite some time, but Andreessen wasn’t as concerned. In his view, the total amount of tech investing is around $50 billion dollars, and the S&P 500 will give back around $1 trillion. Tech only represents 1/20th of total dividends, which is still a small amount of money. And that doesn’t seem that high, he said, indicating we aren’t in a bubble.
In terms of areas ripe for innovation in software technology, Andreessen said that the firm is going to be looking deeper into making investments in education and health care, recently bringing on new talent to explore these verticals for the firm. But there are obstacles to the necessary innovations, including regulatory hurdles. It takes special founders to tackle these hurdles, he says.
And in light of the recent gender discrimination allegations against Kleiner Perkins, Andreessen shared diversity numbers at his firm. Of 107 employees, 52% are women, and women outperform male employees in reviews. He adds that 20% of employees are black or latino.
But the fact is that Andreessen Horowitz still has yet to appoint a female general investment partners. Andreessen says that after he and his partner Ben Horowitz established the firm, his next offer was to a woman, who declined. They’ve persisted in recruiting her, and she’s turned them down each of the five times they’ve made an offer.
“Part of the problem is that there are so few women, and we have to get more people rising up the ranks,” he explains. One the ways he’s hoping to change this is through an education program that he’s partnering with Sheryl Sandberg for, that trains rising female leaders to be on boards. Andreessen Horowitz is actively holding networking events for minorities, women and veterans, and will be putting more resources into diversity and inclusion.
“We’re just scratching the surface of what needs to happen,” he said.
Watch more business news from Fortune: