Andreessen Horowitz is now openly courting capital from Saudi Arabia | Hacker News Reader

Andreessen Horowitz is now openly courting capital from Saudi Arabia

techcrunch.com

148 pointsOzzie_osman94 comments

The fed turned off the taps, still need that cash from somewhere.

Edit:

> Meanwhile, the three reportedly laid it on thick, with Horowitz praising Saudi Arabia as a “startup country” and saying that “Saudi has a founder; you don’t call him a founder, you call him his royal highness.”

that is some next level groveling

It fills be with a combination of joy and disgust to see wealthy Americans sucking up to Saudi money.

This is what it looks like when governments become too strong. Everyone has to go along with what they are doing. Saudi Arabia is a dictatorship and everyone has to march to the leaders tune.

The UK and the US are seeing our governments become ever larger and stronger. Every time we let these governments pass a law to "protect" the children or the poor or whoever, our freedoms shrink and the time when we all must say and do what we are told draws nearer.

a16z has become a joke in the VC industry. They invested upwards of $10 billion in "web3" startups, and are unlikely to see a single dollar of it back. And they keep doubling down on the idiocy, for example dumping $350M into Adam Neumann's new company (which not even he can actually describe).

A decade ago they had their fingers in every big tech exit. Today hardly any name in their portfolio is recognizable.

No wonder they are desperate for the cash.

A decade ago a16z was new (less than four years old, founded in 2009) and had no track record. Today, they are in almost every major tech company in every category, and continue to win seemingly every competitive deal.

There's no vantage point from which they seem to be losing.

Take "web3". Consider the fact that a16z never invested in FTX, Terra, BlockFi — the largest crypto failures/scams, that their competitors invested in. Yet they led Uniswap, Optimism, Matter Labs, and OpenSea which have proven to be some of the most interesting and powerful projects in the space.

If you get all of your news from Hacker News you're going to get a distorted view of reality.

OpenSea is a zombie company. Sure, it's still running and they still have a platform, but the NFT craze collapsed and will never come back. I'm really happy that they weren't able to IPO prior to collapsing, unlike coinbase, who's main accomplishment was scamming public investors.

Interesting to see this. I’m familiar with one startup that’s received quite a bit of their series a from Andreessen Horowitz (don’t think they’re web3 but rather hospitality/real estate) and it seems like they are pushing their ties to a16z super hard, like that’s one of their biggest “assets” or advantages.

I’m not in the startup space so not really sure about how it all works but just kind of comes across like an appeal to authority to me and name dropping a16z all over the place etc. Also skeptical of the business in general (and don’t get along well with the founder heh) but that’s another thing.

This. Just the Andressen name falling so low is no sad to me.. here is the guy who (may be it was all just marketing) you know was part of the Netscape saga fighting the "Goliath" at the time and now seeing this. Not to get all mushy but is it possible to lead life where success and ethics are in harmony? And more importantly that this is the norm! (Ok as a loser il start with success first but still if I ever get successful in not having to work for a living could definitely use a way to keep ethics from not dying off)

> a joke in the VC industry

Bit like a hat on a hat.

Desperate? It’s not like they’re facing a margin call. They’re just looking for funds to be VC’s with, because that’s the business they’re in.

Your attempt to frame it as “desperate” is just kinda sad.

Egg man bad

(yes this is post irony)

This doesn’t really surprise me. The Saudis have a ton of money and like to invest it aggressively in passive vehicles. If your job is to drum up investment money then it makes sense to focus on them from a purely economic standpoint. I once went to a meeting at Credit Suisse’s offices in my earlier days in finance and was amused to see a huge framed image on the wall that was the family tree of the Saudi royal family, showing all the wealthy and influential cousins and uncles who dominate key governmental ministries and hold the purse strings. The bank had practically made a science of how to best target them to pitch their schemes (didn’t end up saving them in the end though!)

> Andreessen Horowitz is now openly courting capital from Saudi Arabia, despite U.S. strains.

I didn't know US' relations with Saudi Arabia were strained. SA imports hundreds of millions of dollars in weapons from USA every year.

They did murder an American journalist for criticising their rules in his writing

He was Saudi, not American. https://en.m.wikipedia.org/wiki/Jamal_Khashoggi : “Jamal Ahmad Khashoggi … was a Saudi journalist, dissident, author…”

Who lived and worked in the US for a US newspaper for years. Murdering any journalist, technically yours or not, is a bad look.

Imagine trying to defend this on a technicality. Great job.

Saudi Arabia's abysmal human rights record makes that kind of trade pretty embarrassing for the US. Not embarrassing enough to cut ties, but there is some tension there.

US-Saudi relations have been strained since the Iraq War (KSA supported Saddam as a bulwark against Iran) [0][1], and faced a further tumble during the Arab Spring because of the US not pushing back against Qatar's support of the Muslim Brotherhood leading to strained Saudi relations in Egypt, Turkey, Pakistan and Libya [2] (Khashoggi was a casualty of the Saudi-Qatar rivalry - it's open knowledge on the Hill [7], doesn't excuse his murder though)

While American weapons do still top Saudi purchases, this is largely in brownfield weapons systems such as the F-15E [3]. For new weapons platforms, the Saudi Armed Forces have increasingly pivoted to Europe (Eurofighter) [4], South Korea (replace the F-15e's munitions and planes with next-gen KAI platforms) [5], and the PRC (UAVs and Cruise Missiles) [6]

In my opinion, all of this is due to Americans - both policymakers and voters - having Orientalist perceptions and stereotypes of the Middle East that are still stuck in the 80s and 90s and which has lead regional powers to hoof it on their own.

The old guard of Saudis who were extremely pro-American all passed away or retired from political life and the newer generation of Saudis have become increasingly disillusioned with the US. Also, the Saudi govt is stopping it's foreign scholarship program and so if you're paying out of pocket, European programs make more sense or Saudi universities which ain't that shabby anymore either due to extremely competitive hiring packages to EU and Asian nationals.

Addendum:

Totally forgot about the Fracking boom in 2014-16 causing a trade war between the KSA and USA [8]

[0] - https://www.wilsoncenter.org/event/saudi-arabia-and-the-iraq...

[1] - http://www.cnn.com/2003/WORLD/meast/03/18/sprj.irq.saudi/

[2] - https://www.jstor.org/stable/48673735

[3] - https://www.ainonline.com/aviation-news/defense/2015-10-06/u...

[4] - https://www.wsj.com/articles/saudi-arabia-agrees-to-buy-more...

[5] - https://www.tacticalreport.com/news/article/8047-saudi-arabi...

[6] - https://www.cnn.com/2021/12/23/politics/saudi-ballistic-miss...

[7] - https://www.politico.com/news/magazine/2023/02/03/pompeo-was...

[8] - https://www.reuters.com/article/us-oil-shale-kemp/is-saudi-a...

Thanks for the detailed explanation!

If something is not made illegal, money will always win over any kind of ethics. Same happening in sport.

I think you can just leave it at "money will always win over any kind of ethics" - with enough money, anything can be made legal.

Isn’t Marc Andreessen the “keep your politics out of work” guy? He openly applauded Coinbase ceo for the being a stellar example of a company doing it correctly.

If you liked that then you should be fine with this too right?

Russ Hanneman moment

This guy fucks!

a16z bet heavily on crypto ecosystem to fly. They even backed many sham concepts. But I guess their wish wasn't granted, and now looking for money from oil.

I’m not an insider, so I wouldn’t know, but there is an alternative take on their motivations for courting the Saudi’s. Namely, they are becoming a bit like SoftBank: they’ve been raising mega funds the past couple years and have started to run out of traditional institutional investors to court.

While this could be an alternative take all its own, it can also be combined with the crypto take (they aren’t mutually exclusive).

Is there an industry that would not take SA money? I don't understand the point of this article.

I think the point is that the prototypical coder, according to the narrative, is a left-leaning lawful good person that wants to change the world for the better. Think early google with “don’t be evil”. The fact that one of the most high profile VCs are now courting Saudi Arabian money is basically the final nail in the coffin of this narrative and that the tech industry is just as immoral, dirty and corrupt as any other. Just in case all the scandals from the past decade hadn’t quite got the point across.

Based on my experience, some developers might be, but executives are not. And the higher up you go in an org, the more obvious it is that "changing the world for the better" is promoted by the organization specifically to attract people willing to work hard to make a positive difference, while the only actual goal is money in the bank.

At a certain level, the person giving the speech about "making a positive impact" is lying, the audience knows they are lying, and the speaker knows the audience knows they are lying, yet everyone plays along because the veneer of altruism is still important.

See: SBF talking his big game about "radical altruism" to make people feel good about their jobs which were effectively promoting a pyramid scheme to make him and the other top dogs wealthy beyond measure.

> making a positive impact" is lying, the audience knows they are lying, and the speaker knows the audience knows they are lying, yet everyone plays along because the veneer of altruism

You don’t need to be altruistic to make the world better.

Only the tech industry thinks of itself that way.

Outside the tech industry, everyone thinks of us as investment bankers - overly paid, out of touch clowns surviving largely on cheap money.

You should see the sheer glee online after every round of layoffs.

Yeah but that’s what I’m saying, even the tech industry doesn’t see itself that way any more.

“An era can be considered over when its basic illusions have been exhausted.” - Arthur Miller

It doesn't help that the letter meant to help prop up svb to potential buyers was not signed by many "web3" companies. You'll notice a16z is not on this: https://docs.google.com/document/d/13h84RV5MXZpImXxelaYOcI6B...

You have to wonder at their motives when the stated goals of "web3" include undermining usd.

The crypto crowd is something else. While I’m sympathetic to the foundational ideas, wishing for the destruction of the national currency and the pauperization of tens of millions just so your magic internet hashes can be worth more is just…awful, awful behavior.

Certainly doesn’t sound like an argument to use their tech. Sounds more like a screed one might hear on a street corner from someone needing medical attention than sound financial advice.

The same industries who said they would divest from all things Russian court Saudi Arabian money? I guess words like “unelected dictator who has been carrying on a brutal war and bombing campaign of a neighboring country with 40 million people” only apply when someone isn’t our ally?

Once Saudis make peace with Iran and join BRICS, we may change our rhetoric.

It’s easy:

Anti-Russia is the current thing

Anti-Saudi Arabia is not the current thing

I do the current thing because I am a moral person, and none of that other stuff matters because I am good person because I support current thing.

If you’ve read the Twitter musings of Andreessen, you’d have be disabused of this notion long ago.

These guys aren’t young anymore.

This industry has taken plenty of SA money via softbank.

I thought that was a Japanese company

Their Vision Fund got 45 billion from the Saudi sovereign wealth fund and 15 billion from the Emirati sovereign fund (out of $100 billion raised).

Comrade Stalin liked this post.

Golf.

PGA vs LIV.

Industry? Nope, there's always someone in every space willing to take blood money.

Company? I can think of a few private, small companies with morals and a sustainable business model who wouldn't take SA money if it was a gift. But those kinds of businesses aren increasingly hard to find in the current climate of late stage capitalism.

This is like saying there are a few engineers who wouldn’t work for Monsanto, Palantir etc for any amount of money. Sure there are, but they are too few to make any meaningful difference.

Greed wins, all the time

https://docs.google.com/document/d/13h84RV5MXZpImXxelaYOcI6B...

The letter meant to make svb more desirable to a potential buyer over that 'hail Mary' deal weekend. Of note is who didn't sign that letter.

What next - we'll be buying their oil?

We're doing that substantially less year by year. Right now we're at about the same levels as we were in 1975. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

The good thing the US is increasingly buying oil from democratic countries, such as India or Malta

It's that we're making a lot of it ourselves now. Fracking is horrifying, but it does help us stay local.

Is this news? The wealthy people have been telling us for years that paupers have no money and no morals.

Ethics? We've heard of it.

Pecunia non olet

Saudi money in the startup world isn’t new. SoftBank is bundles quite a bit of it under a less-noxious brand.

Oh, suddenly we're not happy with giving a totalitarian-authoritarian dictatorship weapons to execute genocide on tens of millions of innocent people and just really want their money for our play time..

What changed?

Edit: I mean, this isn't news and its no conspiracy theory. The USA really is in league, militarily, with a fascist totalitarian-authoritarian dictatorship which regularly murders children as well as its own citizens. It deserves your attention, fellow citizens. Whether it makes you feel uncomfortable about your investments - or not.

Why not take dumb money if it's available? And money hardly gets any dumber than there.

It's not simply just they being dumb, they are also not the firsr choice for premium deals. And I wouldn't put Andreeseen Horowitz a premium VC at this point.

The US govt has been courting the Saudi regime to help with the oil prices for a while now so its unfair to call out a16z.

Politician A got away with corruption (even if called out, in another article, years ago) so it’s unfair to call out Politician B for corruption.

Come on

Decisions like whether it's ok to do business with Saudi, whether they were responsible for killing etc should be left to politicians. They should make the laws which businesses should follow.

You don’t get to delegate ethical decision-making to anyone else. You have to decide for yourself what the right thing is for you to do given your own particular circumstances and beliefs.

Right, because US dollars are so clean.

Saudi Rials are essentially US Dollars in a different packaging. Three and three quarter Rials on top of each other in a trench coat would probably pass as a Dollar and no one would mind.

The issue isn't the currency the exchange takes place in, the problem is doing business with dictators after pretending to altruistic.

Everyone pretends to be altruistic until it suits them not to be. Do people buying iPhones really care about the child labour that mined the silicon or the Chinese workers throwing themselves off the roof of Foxconn. Of course not, we just tell ourselves we are abstracted away far enough to be guilt free. Don't get me wrong, I am sure a16z are being hypocritical, but he who is without sin can throw the first stone.

> after pretending to altruistic

I have a hard time believing a VC pretended to be altruistic. When did they pretend to have a selfless concern for others (altruism)?

"We are delighted to announce that the six General Partners of Andreessen Horowitz, with our families, are all committing to donate at least half of all income from our venture capital careers to philanthropic causes during our lifetimes."

https://a16z.com/2012/04/25/our-philanthropic-commitment/

That's not altruism. https://en.wikipedia.org/wiki/Altruism

Whether or not philanthropy (or any action) is genuinely a form of altruism is up for debate. Your own link points to many definitions and debates around the term.

In either case you can replace the word altruistic with ethical, moral etc in my original comment.

I can understand your and other's people's view that any form of business-doing with Saudi Arabia means that you are immoral (I think this is what you're insinuating). In other words, a very binary world view.

But I think that in practice it is much more nuanced and complex than that and jumping on one's high horse will likely get you thrown off that horse in due course.

I never commented on doing business with Saudi businesses, or in Saudi currency. I was pointing out the false equivalence in the comment that started this thread.

If you think doing business with dictators that violate human rights is a nuanced issue, then I will happily ride my "high horse".

As you said, they are VCs, there is no nuance, it is proffit and nothing else in the equation.

Do you feel as categorically opposed then to all the VCs and each and every one of their portfolio companies because the Saudi Sovereign Wealth Fund invests in them? https://news.ycombinator.com/item?id=35434510

Reply on news.ycombinator.com