Understanding why Andreessen Horowitz needs its own version of Y Combinator incubator program.

For over a year, Andreessen Horowitz has been quietly piloting its own take on an accelerator for early-stage entrepreneurs. Today, the firm announced the program’s official debut under the name ‘a16z START’. In exchange for an unannounced percentage of ownership, early-stage founders will have access to up to $1 million in venture capital.

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The Program’s Structure and Application Process

The remote-first program will accept founders on a rolling basis, with the goal of connecting them with partners for advice, potential customers or investors, and other entrepreneurs. The relatively brief application form for START includes six categories: American dynamism, consumer, enterprise, fintech, games or other. Investment terms will be discussed with final candidates.

Why Does Andreessen Horowitz Need Its Own Y Combinator?

It’s not entirely fair to compare the two institutions beyond their focus on empowering early-stage founders with capital, networks, and advice in exchange for equity. However, over the years, a16z has often led some of the deals that came out of Y Combinator.

The new a16z program is a continuation of a trend established by venture capital firms to keep up with the increasing number of deals in the market. By investing in microfunds and creating in-house accelerator programs, firms can keep an eye on promising founders while also diversifying their portfolios.

Perks of Early-Stage Investing

Early checks mean more upside, less competition, and a way to diversify across different sectors without as much risk. This is evident in the fact that a number of venture firms such as NextView and Accel have created in-house accelerator programs.

a16z’s Program Feels Predictable, If Not Delayed

The firm notoriously left the seed stage a few years ago to avoid conflicts of interest before returning to an aggressive cadence of early-stage investing. a16z START is yet another piece of evidence for the thesis that the early-stage fundraising market still has hungry investors.

a16z’s program is part of the trend established by venture capital firms to keep up with the increasing number of deals in the market.
Early checks mean more upside, less competition, and a way to diversify across different sectors without as much risk.
The firm notoriously left the seed stage a few years ago to avoid conflicts of interest before returning to an aggressive cadence of early-stage investing.
a16z START is yet another piece of evidence for the thesis that the early-stage fundraising market still has hungry investors.

Why Not?

The better question appears to be: Why not? With the increasing number of deals in the market, it’s no wonder that established venture capital firms are investing in microfunds and creating in-house accelerator programs. The early-stage fundraising market still has plenty of room for growth, and a16z START is an example of this trend.