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Ben Horowitz: I feel your IPO pain, Facebook

Speaking at Techcrunch Disrupt, venture capitalist Ben Horowitz shared from his personal history about the pain of a failed IPO. Remember LoudCloud?

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Paul Sloan is editor in chief of CNET News. Before joining CNET, he had been a San Francisco-based correspondent for Fortune magazine, an editor at large for Business 2.0 magazine, and a senior producer for CNN. When his fingers aren't on a keyboard, they're usually on a guitar. Email him here.
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Ben Horowitz (L), speaking with Bill Campbell CNET/Dan Farber

SAN FRANCISCO -- Venture Capitalist Ben Horowitz, half of the powerful Andreessen Horowitz duo, talked about how a lousy performing IPO -- are you listening, Mark Zuckerberg? -- can be a wrenching experience.

"The biggest pressure is on the employees who go home and someone in their family says, 'I read in the paper that you guys are bunch of idiots'," said Horowitz, who was interviewed at Techcrunch Disrupt by Silicon Valley veteran Bill Campbell. "It's a really hard thing to take."

Horowitz was talking about his experience as CEO of LoudCloud, a 1990s-era company he formed with longtime partner Marc Andreessen. But the answer came from a question about Facebook, which Horowitz's firm, Andreessen Horowitz, backed. LoudCloud, Horowitz pointed out, lost 95 percent of its value when as the dot-com bubble burst.

"We were similar to Facebook in that it wasn't the most opportune time ... to go public," he said.

Ultimately, though, Horowitz said going public was helpful because it gave the company the money to buy companies that its competitors couldn't. Eventually, LoudCloud became Opsware and was bought by Hewlett Packard for $1.6 billion in 2007. Which meant that anyone still holding IPO shares did pretty well.

So take comfort, troops at Facebook. You've watched your stock fall from an IPO price of $38 to around $18 a share. At least it's not a 95 percent loss.