The Basketball Team Theory of Venture Capital
There's a reason why your best brainstorming sessions happen with a handful of people around a table, not a conference room packed with fifty. Andreessen Horowitz cofounder Ben Horowitz has built an entire investment philosophy around this idea, and it traces back to a conversation with legendary investor David Swensen in 2009.
"An investing team shouldn't be too much bigger than a basketball team," Horowitz explained on Tuesday's episode of the A16z podcast. He's not talking about the entire roster here—he means the starting five. "A basketball team is five people who start, and the reason for that is the conversation around the investments really needs to be a conversation."
It's a counterintuitive approach for a firm that's grown into one of venture capital's giants. But Horowitz insists that Andreessen Horowitz has maintained this structure by organizing into small, specialized investment verticals. These teams stay lean enough that actual dialogue can happen, not just presentations where everyone nods politely and checks their phones.
The firm also encourages cross-pollination. When investment themes overlap between teams, staff members regularly attend each other's meetings. And twice a year, the firm holds two to three-day off-sites "with not much agenda," designed specifically to foster collaboration and strip away the usual corporate posturing.
"People who come from other firms is we have less politics," Horowitz noted, emphasizing that political maneuvering is actively discouraged at the firm. When you keep teams small and communication open, there's simply less room for the kind of empire-building that can poison larger organizations.