Name: Marc Andreessen: If you go public in this environment, God help you
Uploaded: 2015-04-09
Duration: 2 min 56 s
Description: Fortune Senior Editor Dan Primack sits down with Marc Andreessen, founder of Andreessen Horowitz, to talk M&A, or lack there of, in the tech industry.

There was a report yesterday they, or this morning that Google had taken a look at Twitter, that Twitter had hired Goldman Sachs to advise it. There's been rumors that a company, you're on the board of Facebook, could theoretically have interest. So I, let me ask it this way. In a year from now, do you think Twitter's an independent company? So, I don't want to comment specifically on Twitter. I will say, , um, I have been shocked in the last five years how little M and A there's been, as compared to what I think that there, both should have been and will be. And I think there are a lot of big companies that are on the wrong side of various kinds of technological shifts. There are a lot of acquisitions that kind of everybody knows should happen. Then why? Then, why aren't they? What's the big impediment? So, I don't think, this applies to Face record Google as much because Larry and Mark can kinda, you know, do whatever they want because of how the companies are set up. But, generally speaking, you know? This will go to some of the stuff. It, we'll probably talk about if we talk about things like, like bubble and the current environment is. We're, we're just run this en, environment of just extremely intense risk aversion on the part of public companies, in particular. And we're in this kind of mode where public companies are being, you know, basically forced by, you know, pressures from activists and their inventors to basically give back huge amounts of cash instead of investing it in their business. And so it's, one of the things that's so striking about the current environment is public companies are so risk averse and then as a consequence basically everything, not everything, a very large percentage of kind of interesting, new, innovative, high, you know, ambition, high investment. Things are happening on the private side, And it's just gotten very extreme. Like, on both sides it's gotten very extreme. Historically in a period like this there would be a lot more combinations and I would except on some point for MA to really pick up because there is a lot of this that does ultimately have to happen. But it is striking that is not happening as much as you would think. I'm curious, does that mean for you, as somebody who wants the company your investing in, still private companies, to grow? You know, th, th, there's this argument, the Bill Gurley argument right, go public as soon as you can possibly go public. Do you feel the other way, stay private as long as possible because once you go public you have all those, those issues you just talked about which **** growth? So if you have a public in this environment with a single class share structure and a board that gets reelected every 12 months, God help you. you know you're chum in the water and in particular God help you if you're a young company and you're not actually fully financed and you're going to need to raise money again. God really help you because they will come at you and they will basically short your stock and basically prevent you, drive down your stock price and prevent you from being able to raise money again and give you a self- fulfilling bankruptcy which is always an interesting process to go through. [ LAUGH ] Almost got there. In a prior life. And so it's, there's never been a more dangerous time to kind of be an unprotected public company. I mean that said, Facebook demonstrates, Google demonstrates, and there are others that, there are protections you can wrap around these companies. You can do a class doc. You can do, you know other kind of voting control things. And you, and you can basically build, I call it sort of building a fortress. You can build fortress around a company once at a certain point have it be safe as a public company. It's just something I, we advise our founders to take very seriously. It's not don't go public, it's just take it super seriously. Very different than when I came up in the 90s. A lot of people here kind of experienced this when you would just routinely take these companies public early. It's just, now it's just too dangerous to do that.

Fortune Senior Editor Dan Primack sits down with Marc Andreessen, founder of Andreessen Horowitz, to talk M&amp;A, or lack there of, in the tech industry.