From The Business Journals
Marc Andreessen takes a longer view than most on the debate about whether the tech sector has become overheated.
“I don’t think we’re in a bubble. I think we’re in a bust,” the co-founder of Menlo Park-based Andreessen Horowitz said at the Fortune Global Forum in San Francisco on Tuesday (See YouTube video below). “Tech has been undervalued ever since 2000 and is still undervalued.”
Venture capitalist Marc Andreessen told a San Francisco forum that he thinks tech stocks have been undervalued since the dotcom bust.
Andreessen said that the basket of tech companies known as unicorns — those valued by private investors at $1 billion or more — “is certainly too low.”
“The entire basket of unicorns is worth about half a Microsoft,” he said. “You need a couple to take off and it will become really clear in retrospect clear the basket is undervalued.”
When asked about the pullback this year IPOs, particularly in tech, that I wrote about for this week’s Silicon Valley Business Journal cover story, Andreessen said a new type of exit is evolving.
“Some of the big unicorns will ultimately go public. Some will get bought,” Andreessen said.
But some are staying private longer [because] they can’t be as innovative as they need to be as a public company and because they can help employees and early investors get a return through secondary markets that have sprung up. The Nasdaq recently bought one of the pioneers in that arena named SecondMarket.
“Now there are three paths to exit,” Andreessen said.
He added that he is in no hurry to achieve an exit on his investments.
“When I was growing up, the big criticism of American business was that it was all short term.,” he said. “The competitors like the Japanese were all long-term. Now all of a sudden the criticism is that we are too long term. We’re totally happy being long term. We have our money locked up for 15 years and we are happy to be in these companies for a long time.”
Much of whart the colorful VC said at the conference may sound familiar to followers of his Twitter handle of @pmarca where he regularly issues “tweetstorms” on a wide variety of topics.
Andreeesen took some ribbing about being on the board at Facebook and tweeting so much. Facebook Chief Operating Officer Sheryl Sandberg appeared with him at the Fortune conference.
“I believe I am doing valuable competitive analysis. I think I should get some sort of award from Facebook for what I am doing,” he said, with Sandberg chuckling at his side.
Andreessen said he tweets frequently because it is the medium that where the press is paying attention. “But the press is increasingly on Facebook, so I will probably eventually switch over.”
“We’re gonna get him,” Sandberg interjected. “We’re working on him.”
But she deflected the moderator’s suggestion that Facebook should just buy Twitter.
“Jack’s a friend and we are excited to see what he does with Twitter,” she said, smiling. “We are never going discuss M&A publicly.”