- Marc Andreessen joined the board of Facebook, now called Meta, more than a decade ago.
- Since Peter Thiel stepped off the board in February, Andreessen is its longest serving director.
- Outsiders say Andreessen’s competing investments and comments aimed at Facebook could threaten his board seat.
Another of Facebook’s most well-known and influential boosters may soon follow Peter Thiel off the company’s board.
Marc Andreessen’s position as the longest-serving board member at Facebook, now called Meta, is the topic of increased speculation among those close to the company. Andreessen’s interest and investment in the emerging Web3 space — a catchall term for cryptocurrency, blockchain technology, and digital assets known as NFTs — is cause for some consternation, a source close to Facebook said. Andreessen is a founding partner of the venture firm Andreessen Horowitz, which has its tentacles all over 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 entered through AR and VR devices. Having one of the world’s most influential VCs plowing 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 identified because of personal relationships.
If the early Facebook investor exited the board in the coming months, “it would not surprise me even remotely,” another source said. Facebook’s, or Meta’s, entire nine-member board is up for reelection 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 once were, another source said, the two are not thought to have personally fallen out.
In the world of venture capital, investing in a startup that competes with a portfolio company is considered a faux pas. In 2020, high-powered venture firm Sequoia Capital backed out of a $21 million investment in a payments startup that rivals Stripe, which is a portfolio company, citing a conflict of interest.
While boards are often full of current and former executives who operate in similar or competing industries, any board member is expected to act “in the best interest of the company and not in your own best interest,” said Parthiban David, a corporate governance expert and associate dean at American University’s business school.
“Any decision you make, any advice you provide, anything you do in that boardroom is supposed to be disinterested and not self-interested,” David added.
There is no prescriptive law saying a board member can only work in a way that benefits the company to which they advise, and conflicts of interest among board members are common, David said. But such conflicts can come to be seen as “egregious” if they evolve to include the poaching of employees, for example.
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. Several weeks later, the firm invested in the 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 at recruiting top talent over the last few years.” Some of whom Andreessen took for his own firm.
It’s not unusual for venture capitalists to back founders who left a portfolio company to build something new. That’s savvy investing. Investors leverage their relationship with a portfolio company to get an early look at startups coming out of a portfolio company’s alumni network and to vet the former employees turned founders.
Other high-profile employees, like David Marcus and Morgan Beller, have fled the company after working on crypto projects and not jumped to Andreessen. Facebook’s attempt at getting into crypto has been unsuccessful thus far and what will come of its metaverse investment remains to be seen. Still, Facebook’s work in the space is likely not over, a source with knowledge of the company said. Having an operable payments system is seen as “crucial” to its ambitious plans for the metaverse. Currently, its Novi digital wallet has launched and it’s partnered with Paxos to have its stablecoin available in the Novi wallet.
Beyond competition on projects and talent, Chris Dixon, a top lieutenant and rainmaker at Andreessen Horowitz and one of Marc Andreessen’s closest collaborators, recently took direct aim at Facebook and its attempts to operate in Web3.
Dixon told The Verge that companies like Yuga Labs, the creator of Bored Ape NFT’s, is “an important counterweight to companies like Meta.” Andreessen Horowitz led a new $450 million seed round in Yuga Labs as it starts a metaverse project of its own, 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 of the money and control goes to that company,” Dixon added.
Asked about Andreessen leaving the board, a spokesperson for the VC firm told Insider: “If he were to step down, he doesn’t know about it. So no, it’s not happening. At least not now.”
A spokesperson for Facebook said simply, “We don’t comment on rumor or speculation.”