Andreessen explains his move to venture capital

The Netscape executive-turned-venture capitalist addressed the crowd at Fortune's Brainstorm: Tech conference on why he decided to become a money man.

PASADENA, Calif.--Marc Andreessen is known more for building companies rather than funding them, but he said he is looking forward to proving his chops in the latter category.

Andreessen, who launched his $300 million Andreessen Horowitz venture capital fund earlier this month, said Wednesday at Fortune's Brainstorm: Tech conference that he has a lot of "directly relevant" experience that will help attract start-ups.

Marc Andreessen talks about his move from entrepreneur to venture capitalist at Fortune's Brainstorm: Tech conference on Wednesday. Ina Fried/CNET

There are not that many great companies started each year, he said. Andreessen noted that there are probably 15 companies created a year that go on to produce $100 million a year in revenue and account for much of the industry's return.

"Our job as a VC is to be able to get into those...by being the kind of VC that entrepreneurs want to (do business with)," Andreessen said.

He said that his fund will focus on his field of expertise--information technology.

"We won't do medical devices," he said. "We won't do rocket ships. We won't do space elevators."

Andreessen said that many markets seen as mature are actually still rapidly changing--sectors such as storage, networking and operating system.

"There's a lot of change happening in these areas," he said.

Andreessen, best known for his role at Netscape, said he learned from his summer as an IBM intern that a career at such a large company was probably not for him. While he learned a lot, he said there were 17 layers of management between him and the IBM chief executive.

He said that start-ups tend to be more innovative, but said that only when companies get large can they really have a global impact.

"Small companies, just as a category are going to be more innovative," he said, though he noted Google and some other large companies have managed to remain innovative.

Asked about his prediction for the economy, Andreessen went out on a limb: "I predict the company will survive in some fashion."

He did, however, suggest that the deleveraging of the economy may not be done yet, noting that the government has pumped billions in to replace private sector money.

"Have we really addressed the problem or have we just kicked the can?" he said.

Correction at 4:15 a.m. PDT July 23: The spelling of Andreessen's last name has been fixed.

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    During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.

     

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