- Andreessen Horowitz partner Naithan Jones responded to recent criticisms about the firm's new Talent x Opportunity Fund, which has attracted scrutiny of both its structure and starting size of $2.2 million.
- Jones said that he pushed for the fund to be a nonprofit donor advisory fund rather than a venture capital fund, to allow "everyone from the community to be investors and entrepreneurs," and "decentralize" control of the incentives driving investors.
- Jones also pushed back against criticism that the fund was creating a "side door" for people who'd already gone through the traditional fundraising process.
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Andreessen Horowitz partner Naithan Jones took to Twitter to address a series of criticisms that have cropped up against the elite venture capital firm's new nonprofit 'Talent x Opportunity' fund, which was announced on Wednesday.
"I want to clear up some misconceptions about TxO," Jones began, in the first of a 13-tweet-long thread. "A lot of the things being spread are only half truths with the blanks filled in the most cynical way possible. They are becoming accepted myths which could damper donations."
The TxO fund's announcement made waves on Wednesday, as some entrepreneurs and VCs responded to the announcement with applause. Others criticized the fund's nonprofit structure, and the fact that it was kicking off with just $2.2 million in partner donations, an amount that pales in comparison to Andreessen Horowitz's total $12 billion in assets under management.
Jones, who first began by responding to individual Twitter criticisms, told critics that he was responsible for the fund's donor advisory structure, and defended it as a way for "everyone from the community to be investors and entrepreneurs." He also said the structure would allow the nonprofit Tide, which will manage the fund, to hold Andreessen Horowitz accountable for the criteria around which it could invest in founders.
"In this case we can decentralize the control of both the incentives and the oversight of money portion of this," Jones said.
'This is not a charity'
The fund's nonprofit status has been controversial, especially as it plays into the fund's relatively small starting size of $2.2 million — less than many of the firm's investments in individual startups like Clubhouse.
In a podcast on Thursday, Backstage Capital founder Arlan Hamilton addressed both SoftBank's $100 million fund and Andreessen Horowitz's nonprofit fund, noting that they were off to a good start but both firms — as well as a number of other firms in the industry — had the resources to do more.
"You owe black funders an apology. The billions and billions and billions of dollars under management that goes to other white men for over 75 years. You owe us an apology," Hamilton said. "I will not apologize for being offended and insulted by these people who have gotten and taken everything by way of economics from black and brown bodies, and then give us crumbs for a headline."
Jones didn't directly address that critique in his thread, but noted that the fund's starting amount — all "generously awarded" donations from the fund's partners — had grown. A commitment from Ben and Felicia Horowitz to match donations of up to $5 million had allowed the fund to multiply in size, Jones said.
To critics who noted that dedicating a separate fund for underserved founders was one way to give rejected founders "a side door" rather than opening up regular access to Silicon Valley's circles, Jones said that they were wrong.
"This is not a program to lower the bar for who gets a check from us or a side door after rejection from the front door. ...It's a training program and fund for those talented people we would NEVER see without this program in the first place." he tweeted.
Founders provided with the firm's 10 month training program and Andreessen Horowitz's network would then be able to deliver "the same returns as the people from elite schools," Jones added, stressing, "THIS IS NOT A CHARITY."
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