In an unusual move for a venture firm chasing a hot start-up, Andreessen Horowitz said it has dropped out of the race to be an investor in social location company Foursquare.
In an interview Monday night, Ben Horowitz, partner in the high-profile VC outfit he helms with Marc Andreessen, said enough was enough related to the intense press and other machinations around the deal, which has included talks to be acquired by Yahoo.
"We withdrew our funding offer to Foursquare and we are out," said Horowitz in an interview with BoomTown. "This is playing out too much in public and clearly someone has an interesting agenda here, so this is not something we want to participate in."
In addition--after making an offer three weeks ago at valuations lower than has been reported, although he would not specify the exact valuation--Horowitz said that he felt the company had conducted a "process that is very long and undefined."
Indeed, it is not clear what is going on and the situation is rife with speculation about what Foursquare and, specifically, its Founder and CEO Dennis Crowley will do.
Foursquare's board met last week about the possible acquisition deal by Yahoo that priced the start-up at just above $100 million.
But, so far, it's turned that offer down flat, according to sources at both Foursquare and Yahoo.
But is still interested, sources said, and seems willing to raise its bid.
Also still in the running, Gideon Yu of Khosla Ventures, a rival firm to Andreessen Horowitz, and perhaps others.
In large part, the decision of what to do rests with Crowley, who controls a large chunk of the shares of the start-up.
Many think he might be inclined to not sell Foursquare to a large company and take funding instead, remaining independent and turbocharging the fast-growing status-update service.
Crowley already sold a start-up he founded, Dodgeball, to Google several years ago and had a very bad entrepreneurial experience.
Perhaps that's why he and Foursquare have so far been very slow to take any of these lucrative offers, despite the fact that it is still small (about one million users) and unprofitable.
But, even in dropping out, Horowitz underscored his admiration for Foursquare, noting that Andreessen Horowitz still considered it a great investment.
"If the process was changed, we still like the company," said Horowitz. "But since it has been long and undefined, it is prone to manipulation."
It's an astounding thing for a VC to say on the record, of course, and entirely true.