Andreessen Horowitz, also known as a16z, is one of the most well-known venture capital firms operating in Silicon Valley, and is now expanding into even more new territory.
a16z is launching START, a startup accelerator program for early-stage founders wanting to get their idea off the ground and into reality.
“Powered by the a16z seed fund in collaboration with partners investing across American Dynamism, Consumer, Enterprise, and Fintech, a16z meets START entrepreneurs where they are in their journey,” the firm said announcing the news.
“a16z START entrepreneurs are introduced to a network of peers, repeat founders, domain experts, potential customers and more to help refine their thesis and scale it into a world-changing business.”
Solving old problems?
The basic idea is that a16z offers founders up to $1 million at the very earliest stages of their journey for a percentage share in their company. These are funded by a16z's $400 million seed fund, announced in 2021.
Specific terms are decided on an ad hoc basis, which differs from other accelerators, such as the legendary Y Combinator, which offers $125,000 for a 7% stake.
a16z's program is remote and rolling, meaning it will accept founders at all times.
As TechCrunch notes, the a16z START landing page offers no diversity mandate or specifies how long the program will run or who will be mentoring the startups.
There is also no focus on attracting early-stage crypto startups, something a16z has been keenly focused on through its huge $2.2 billion fund.
The START program is a first for a16z, which has previously invested in startups at seed stages onwards. Working at the startup formation stage is different because the ideas are less well-defined and investors are betting on the specific founder to execute.
However, the returns are much greater for far less capital investment, something that has made YC – which invested in Airbnb, Stripe, Instacart, Coinbase, DoorDash, OpenSea, and many others at very early stages – a lot of money over the years.
Legendary VC firm Sequoia recently also launched an accelerator fund, Arc, in the US and Europe, hoping to attract the next crop of huge tech startups. Like a16z, Sequoia will invest $1 million for an unspecific stake.