The leaders of Andreessen Horowitz believe that experience is the best teacher. So the best venture capitalists are ones with first-hand experience founding companies, people who have “been through the war,” as Marc Andreessen puts it.
The firm’s newest general partner, Alex Rampell, certainly passes that test. Mr. Rampell, 34, has founded or co-founded seven start-ups, by Mr. Andreesen’s count, including the shareware software Mr. Rampell wrote in 1996 as a high-school student, AlwaysOnline. It was a robo-dialing program that kept dialing AOL access phone numbers — in the days of dial-up service — and kept users online continuously. It sold tens of thousands of copies, eventually got banned by AOL, and largely paid Mr. Rampell’s way through Harvard University.
Most recently, Mr. Rampell was co-founder and chief executive of TrialPay, an e-commerce payment and advertising service, which was acquired by Visa this year. At Andreessen Horowitz, he will be focusing on financial technology start-ups, and he and the firm see finance as a big opportunity today.
In an interview, Mr. Andreessen briskly scanned the history of finance as an industry pushed ahead by innovators — Dee Ward Hock of Visa (credit cards), John C. Bogle of Vanguard (index funds), and the “PayPal crew” (online payments). “Ultimately, it’s an entrepreneur-driven field,” he said.
Mr. Andreessen described the current system of consumer banking as one based on paper, older technology and vast holdings of street corner branches. “All of financial services grew up before everyone in the world had smartphones,” he said. “If you were starting from scratch, would you do any of that — branches, ATM machines and paper records? The answer to that is ultimately no.”
Mr. Rampell says he sees banking and insurance as “ripe for disruption,” made vulnerable by legacy technology, the post-financial crisis need to operate more conservatively and the corset of tighter regulation. Look at the job listings at banks and insurance companies, he said, and you invariably see openings for programmers skilled in COBOL, the business computer language that dates back to 1959. “They’re in maintenance mode in terms of technology, and they have to keep the regulators happy,” Mr. Rampell said.
Andreessen Horowitz already has several investments in financial technology ventures including 21, Affirm, Boku, Coinbase, Dwolla and TransferWise. Their businesses range from Bitcoin mining to alternative lending to online money transfers.
Fintech is attracting funding at a torrid pace, with $13.7 billion invested in the last year, 46 percent more than the previous year, according to CB Insights.
Mr. Rampell sees further opportunities in new asset classes. One example, he said, might be selling an equity stake in homes. “Why not sell a portion of your home?” he asks.
Ample capital exists around the world, as in the deep coffers of the Norwegian sovereign wealth fund, with $870 billion in assets, thanks to North Sea oil and a small population. With the right financial vehicle, Mr. Rampell said, such a fund could invest to co-own houses in, say, pricey Palo Alto, Calif., making it easier for prospective home buyers to make down payments and reduce their mortgage burden. “They could own 10 percent or 15 percent of your house, so you don’t have to borrow as much,” Mr. Rampell said. “I think there’s a lot of room for more of those kind of new asset classes.”
The firm’s newest general partner, Alex Rampell, certainly passes that test. Mr. Rampell, 34, has founded or co-founded seven start-ups, by Mr. Andreesen’s count, including the shareware software Mr. Rampell wrote in 1996 as a high-school student, AlwaysOnline. It […]