For one thing, eBay had acquired the company Dixon had most recently co-founded, Hunch, just one year earlier for $80 million, a sale that cemented Dixon’s reputation as a top tech entrepreneur in New York. He was also at the top of his game as a seed-stage investor, a sideline for Dixon since selling the first company he’d launched, SiteAdvisor, to McAfee in 2006 for $74 million. In fact, Founder Collective, a seed-stage, New York-focused venture firm co-founded by Dixon in 2009, closed a second fund with $70 million –roughly 70% more than its first fund – just two months before Dixon confirmed that he was headed West to become a VC.
Sitting in a bright, window-lined conference room at Andreessen Horowitz, his back to a cluster of lush trees outside, Dixon reveals now that leaving New York to forge a new path in Silicon Valley wasn’t a quick or easy decision, despite Andreessen Horowitz’s corresponding rise within the startup ecosystem. Before making up his mind, Dixon says he made “six or seven” cross-country trips over the course of a year, along with “multiple, full weeks hanging around the office, going to pitch meetings, and talking to people” to ensure it was a “good cultural fit from both sides.”
In the end, the opportunity was too compelling to pass up, he suggests. And so far, it seems, so good.
Six months into the job, Dixon has already led two investments for Andreessen Horowitz, participating in a $10.7 million round in the Newport Beach, Calif.-based drone startup Airware, and quarterbacking a $30 million round for Shapeways, a New York startup that allows people to design and produce objects using high-end printers. He’s now a director at both startups.
“I’m probably a little ahead of schedule,” says Dixon, explaining that the firm’s general partners aim to invest in two to three deals a year to keep their board commitments manageable. “But there’s no hard and fast rule; it’s just a question of how many board seats you can handle. If you see something great, you’re not not going to do it.”
Dixon doesn’t appear worried that his new role at Andreessen Horowitz is testing his relationships in New York, where he still spends one week each month.
Partly, says Dixon, he isn’t concerned because many local early-stage firms, such as Union Square Ventures, complement rather than compete with Andreessen Horowitz, which often bounds into startups after they’ve begun gaining traction. (“We just did two follow-on deals to Union Square recently,” he says, pointing to the payments network Dwolla and Shapeways.)
But Dixon also doesn’t have a pulse on other VCs, he says, because he doesn’t spend a whole lot of time with them these days. Owing to the “percentage ownership requirements” involved with a $1.5 billion fund like Andreessen Horowitz is currently investing, “we either go all in and lead the round, or we don’t,” Dixon says. “There’s not a whole lot of syndication.”
If the job has any downside, it may be that Dixon doesn’t have time at the moment for much other than the occasional history book, calling “historical analogues” the “best guide” to the future. When the firm says no to an entrepreneur, for example, the partners “give very detailed reasons as to why we say no,” says Dixon. “So if I’m meeting five people, I have to write five long blog posts, basically.”
That’s meant fewer hours for his own blog site, where Dixon’s posts regularly elicit hundreds of comments, some of which help shape the way he looks at a technology or trend.
Even still, Dixon seems thrilled to be at the “center of a lot of really interesting stuff going on,” including what he sees as one of the biggest opportunities right now “potentially” — the digital currency bitcoin.
“I think you have to pay attention to the fact that a lot of the best entrepreneurs right now are thinking about bitcoin,” Dixon says. “Regardless of what we [as VCs] think, it’s where a lot of smart people are gravitating. Yesterday, I had two meetings where experienced entrepreneurs, who sold their companies, were both starting bitcoin companies. Neither has spoken about them publicly, but you could fill your week with these [types of meetings].”
And that’s just what he’s doing.
Photo courtesy of Andreessen Horowitz.
For an in-depth interview with Dixon, about his childhood, his hobbies, and the best advice Ron Conway ever gave him, please visit us here at Venture Capital Journal. (Subscribers only.)