A move by Andreessen Horowitz to join Elon Musk’s bid on Twitter Inc. threatens to create a conflict for co-founder Marc Andreessen, who sits on the board of social networking rival Meta Platforms Inc.
Andreessen Horowitz agreed to invest $ 400 million in the Twitter takeover deal, part of $ 7.1[ads1] billion in new financing commitments announced Thursday. That put one of the biggest early supporters of Facebook, which changed its name to Meta last year, in a position to become a new owner of Twitter.
Fast co-founder Ben Horowitz said in a tweet that Musk may have been the only person in the world with “courage, brilliance and skills” to fix Twitter’s problems and “build the public square we all hoped for and deserved.”
Andreessen Horowitz’s involvement has raised questions about the VC firm’s links to Meta, where Marc Andreessen has served as a board member since 2008. While it is not uncommon for Silicon Valley investors to have a hand in competing startups, potential conflicts can be more serious. publicly traded companies, said John Coates, a professor at Harvard Law School.
“It is safe to say that Silicon Valley norms of conflict – where they are often tolerated or even encouraged, in a culture along the lines of ‘everything goes down the drain’ – are dangerous to pass on to public world companies,” he said. .
A representative of Andreessen Horowitz said it planned to seek legal advice to ensure compliance with all rules regarding the sharing of Twitter information with the company.
Andreessen, 50, has been investigated for previous possible conflicts at Meta, such as investing in companies – including Oculus VR – that Facebook ended up buying. At one point, he was sued by investors for advising Meta CEO Mark Zuckerberg on how to protect majority control even if he sold his shares.
On Twitter, Andreessen has been publicly supported by Musk, and he is insulted by the guidelines for content moderation at social media companies. Musk has said he plans to loosen the rules if he takes responsibility for Twitter.
Since the investor is not on Twitter’s board, his connection to Meta may not be an issue, said David Larcker, a professor at Stanford University. “Although I do not know of any way to figure this out from public data, I would guess that many executives and board members trade in the shares of their competitors,” he said.
Twitter, although far smaller than Facebook, is considered a Meta rival, competing for digital advertising dollars and user posts. When Twitter’s board considered whether to take Musk’s bid, they saw the recent decline in Meta’s valuation as part of their assessments, according to a person familiar with the matter. They finally concluded that the billionaire’s offer was fair.
Andreessen is not the only partner in his venture firm whose existing relationship could become more complicated after Musk’s deal is completed. Vineeta Agarwala, a general partner of Andreessen Horowitz who invests in biotechnology and medical companies, is married to Twitter CEO Parag Agrawal. It is unclear whether Agrawal will remain CEO of Twitter when Musk takes over, but Musk has previously said he made his bid on Twitter in part because he did not believe in the company’s current management.
On Thursday, CNBC reported that Musk plans to take over as CEO shortly after the deal ends.