Key Takeaways
- • Marc Andreessen named Warren Buffett's advice to "put all your eggs in one basket and watch that basket" and to deeply understand what you invest in as the best investment advice he has received, per an excerpt from David Rubenstein's book "How to Invest: Masters on the Craft."
- • Andreessen's stated common investor mistake is buying something read about in the press or seen on TV without deeply understanding it.
- • Asked how he would invest $100,000, Andreessen said he would put it in an S&P 500 index fund, adding "Don't get fancy."
- • Rubenstein recounts that Carlyle passed on early funding for Netscape after balking at a valuation above $100 million for a company with no revenue; Netscape was later sold to AOL for $4.2 billion.
- • Andreessen describes venture capital as "an alchemy of understanding people, understanding technology, understanding markets," and says his biggest mistakes are the investments he did not make.
Summary
David Rubenstein, co-founder of The Carlyle Group, offers an excerpt from his book "How to Invest: Masters on the Craft" (Simon & Schuster, 2022), in which Marc Andreessen, co-founder and general partner of Andreessen Horowitz, answers a series of lightning-round questions on investing. Per the excerpt, Andreessen's best investment advice came from Warren Buffett: put all your eggs in one basket and watch that basket, while deeply understanding the nature of what you are investing in.
Andreessen identified the most common investment mistake as buying assets people have read about or seen in the media without understanding them. When asked how he would deploy $100,000, he said he would place it in an S&P 500 index fund. On his own regrets, he said that in most forms of investing mistakes are losses, but in venture capital they are the investments not made.
The excerpt also recounts Carlyle's early encounter with Andreessen. Rubenstein writes that Carlyle was approached in the 1990s by James Clark, founder of Silicon Graphics, seeking venture capital for a company to commercialize Andreessen's internet navigation technology. Carlyle declined to invest at a valuation above $100 million for a company without revenue, and also passed when a below-$100 million valuation was proposed. That company was Netscape, later sold to AOL for $4.2 billion, with Andreessen becoming AOL's chief technology officer. Andreessen subsequently co-founded Opsware with Ben Horowitz, which Hewlett-Packard acquired for $1.6 billion, and formed Andreessen Horowitz in 2009.
On the craft of venture investing, Andreessen described it as "an alchemy of understanding people, understanding technology, understanding markets," arguing that investors should go deep into how new products and companies are built.
Andreessen identified the most common investment mistake as buying assets people have read about or seen in the media without understanding them. When asked how he would deploy $100,000, he said he would place it in an S&P 500 index fund. On his own regrets, he said that in most forms of investing mistakes are losses, but in venture capital they are the investments not made.
The excerpt also recounts Carlyle's early encounter with Andreessen. Rubenstein writes that Carlyle was approached in the 1990s by James Clark, founder of Silicon Graphics, seeking venture capital for a company to commercialize Andreessen's internet navigation technology. Carlyle declined to invest at a valuation above $100 million for a company without revenue, and also passed when a below-$100 million valuation was proposed. That company was Netscape, later sold to AOL for $4.2 billion, with Andreessen becoming AOL's chief technology officer. Andreessen subsequently co-founded Opsware with Ben Horowitz, which Hewlett-Packard acquired for $1.6 billion, and formed Andreessen Horowitz in 2009.
On the craft of venture investing, Andreessen described it as "an alchemy of understanding people, understanding technology, understanding markets," arguing that investors should go deep into how new products and companies are built.
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