DOJ Probes Andreessen Horowitz Over Board Seats at Competing Companies
DOJ Scrutinizes VC Board Overlap
The U.S. Department of Justice has reportedly been investigating Andreessen Horowitz (a16z) for almost a year over an arrangement in which two of its partners sit on the boards of companies that now compete with each other.
Ben Horowitz, a co-founder of the firm, holds a board seat at data analytics company Databricks, while partner Martin Casado serves on the board of data pipeline company Fivetran. While board conflicts are not uncommon in venture capital, these companies have moved into overlapping market territory, raising antitrust concerns.
A 112-Year-Old Law Dusted Off
What makes this investigation notable is the legal basis being invoked. The DOJ has reportedly been examining the arrangement under a 112-year-old antitrust statute that is rarely applied to venture capital firms. This suggests regulators are taking a closer look at how VCs may influence competition through board-level relationships across portfolio companies.
It's worth noting that Databricks and Fivetran were not necessarily direct competitors when a16z first invested in them, and such overlapping board positions have historically been a common practice in venture capital.
Implications for Venture Capital
The investigation highlights growing regulatory attention on the governance structures within major venture capital firms. If the DOJ determines the arrangement violates antitrust principles, it could set a precedent affecting how VCs structure board seats across their portfolios going forward.
The probe remains ongoing, and no conclusions have been announced.