Ben Horowitz on why Andreessen Horowitz has no female general partners

When Ellen Pao lost her discrimination suit last month, it didn’t end concern over the lack of women at the top levels of the venture capital industry. In fact, it turned up the heat.

Although Kleiner Perkins Caufield & Byers prevailed over Pao in the gender bias case, venture capitalists continue to find themselves under fire for their hiring and promotion practices.

Andreessen Horowitz is perhaps the most high-profile venture capital firm in Silicon Valley right now, and the gender topic keeps coming up when its partners make public appearances. One reason: All seven top partners in the firm are men.

On Tuesday, co-founder Ben Horowitz further addressed the issue by saying a venture capitalist can have bigger influence on diversity by improving diversity throughout the ranks than by hiring one high-profile leader.

“I know the firm would get a thousand times more credit if we had one woman general partner rather than if I had 53% of the firm being women,” Horowitz said at the Milken Institute Global Conference at the Beverly Hilton. “But that’s the least impactful thing I could do because no one in the firm reports to a general partner.... It would be great if we could attract a great person to that position, but why should that be a goal? It’s not going to actually change Silicon Valley.”

Appealing to people’s desire to “win” the start-up race is a better approach, particularly showing that diverse hiring brings about a competitive advantage, Horowitz said.

Indeed, half of Andreessen Horowitz is now female and 76% of the top performers in a recent review were women, according to Horowitz.

“We have no quotas, goals, mandates,” Horowitz said.

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FOR THE RECORD

5 p.m.: An earlier version of this article stated that 66% of Andreessen Horowitz’s top performers were women. The figure was 76%.

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The general partners in a firm, however, are the ones who make the big money when the firm’s investments are successful.

It’s not that the firm, known as a16z, hasn’t tried: Co-founder Marc Andreessen has said he’s invited several women to become general partners over the years, but none accepted in part because they have so many other options.

Horowitz also touched on the rising valuations of start-ups as they stay private longer. He noted that companies are cashing out with the equivalent of initial public offerings on the private market because mutual funds, hedge funds and other investors have started investing in private companies.

When companies go public, they also face more stringent requirements for financial reporting and auditing. The regulatory burden adds expenses in time, money and outside scrutiny that can hamper a fast-growing operation.

But the private offerings fall too much in the other direction, Horowitz said. It’s “completely unregulated,” and that’s troublesome because companies may not be disclosing the unvarnished truth, Horowitz said.

“Right now the prices keep going up,” Horowitz said. “It’s only a crime when prices go down, but it’s a rather serious crime.”

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