- Marc Andreessen joined the board of directors of Facebook, now called Meta, more than a decade ago.
- Since Peter Thiel left the board in February, Andreessen has been his longest-serving board member.
- Outsiders say Andreessen’s competing investments and comments aimed at Facebook could jeopardize his seat on the board.
Another of Facebook’s best-known and most influential boosters could soon follow Peter Thiel off the company’s board.
Marc Andreessen’s position as the longest-serving board member at Facebook, now Meta, has been the subject of increased speculation around the company. Andreessen’s interest in and investment in the burgeoning Web3 space — a collective term for cryptocurrency, blockchain technology and digital assets known as NFTs — is causing some dismay, a source close to Facebook said. Andreessen is a founding partner of venture firm Andreessen Horowitz, which operates across the category through investments in startups, crypto-focused funds and digital assets.
Meanwhile, Facebook is trying to build a number of Web3 projects alongside “the Metaverse,” or a fully immersive digital experience input via AR and VR devices. Having one of the most influential VCs in the world investing many billions of dollars in competing projects is not seen as helpful.
Andreessen’s days on the board may well be numbered given such investments, another source said, asking not to be named because of personal ties.
If the early Facebook investor steps down from the board in the coming months, “I wouldn’t be the least bit surprised,” another source said. The entire board of nine of Facebook or Meta is up for re-election in May.
Andreessen was an early advisor and cheerleader to Facebook founder and CEO Mark Zuckerberg. While they may not be as close as they used to be, another source said the two are said not to have fallen out personally.
In the venture capital world, investing in a startup that competes with a portfolio company is considered a faux pas. In 2020, high-profile venture firm Sequoia Capital pulled out of a $21 million investment in a payments startup that competes with portfolio company Stripe, citing a conflict of interest.
While boards are often full of current and former executives who work in similar or competing industries, every board member is expected to act “in the best interests of the company and not your own best interests,” said Parthiban David, an expert for Corporate Governance and Associate Dean of the American University Business School.
“Every decision you make, every advice you give, everything you do in this boardroom should be disinterested and not selfish,” added David.
There is no mandatory law that says a director can only work to benefit the company he advises, and conflicts of interest between directors are common, David said. However, such conflicts can also be perceived as “outrageous” if, for example, they develop into the poaching of employees.
Andreessen Horowitz may have done just that last fall. Two of Facebook’s top crypto engineers defected to join the venture firm’s crypto team. A few weeks later, the company invested in blockchain startup Mysten Labs, founded by four other Facebook engineers.
At the time of the Mysten investment, Arianna Simpson, a general partner at Andreessen Horowitz, told CNBC that Facebook had “done an amazing job recruiting top talent over the past few years.” Andreessen recorded some of them for his own company.
It’s not uncommon for venture capitalists to back founders who have left a portfolio company to start something new. This is smart investing. Investors use their relationship with a portfolio company to get an early look at startups that have emerged from a portfolio company’s alumni network and to vet ex-employees-turned-founders.
Other high-profile employees, such as David Marcus and Morgan Beller, have fled the company after working on crypto projects and have not jumped to Andreessen. Facebook’s attempt to get into crypto has so far been unsuccessful and what will become of its Metaverse investment remains to be seen. Still, Facebook’s work in this area likely isn’t over yet, a source with knowledge of the company said. Having a working payments system is seen as “crucial” to his ambitious plans for the Metaverse. Currently, its Novi digital wallet has been launched and it is working with Paxos to make its stablecoin available in the Novi wallet.
Beyond the competition for projects and talent, Chris Dixon, a top lieutenant and rainmaker at Andreessen Horowitz and one of Marc Andreessen’s closest associates, recently took aim directly at Facebook and its attempts to operate in Web3.
Dixon told The Verge that companies like Yuga Labs, the creator of Bored Ape NFTs, are “an important counterbalance to companies like Meta.” Andreessen Horowitz led a new $450 million seed round into Yuga Labs as it launched its own Metaverse project, putting it in direct competition with Facebook and its Metaverse efforts.
“There’s a dystopian future where Meta is this kind of dominant digital experience provider and all the money and control goes to that company,” Dixon added.
When asked if Andreessen is leaving the board, a spokesman for the VC firm told Insider, “If he were to step down, he wouldn’t know about it. So no, it doesn’t happen. At least not now.”
A spokesman for Facebook simply said, “We do not comment on rumors or speculation.”