Silicon Valley’s hottest VC firm, Andreessen Horowitz, now owns an $80 million stake in Twitter, Kara Swisher reports.
What’s weird about AH’s stake is how it got it: buying shares off employees and early investors through secondary markets.
Twitter raised a $200 million last fall and AH did not participate.
Secondary markets are more and more becoming a great place for VCs to gobble up huge portions of hot startups without having to go through the rigamarole of leading a financing round.
Eleveation Partners, for example, bought a $120 million worth of Facebook stock last summer off side markets. They bought in at somewhere below a $25 billion valuation. Now Facebook is worth $50 billion, according to Goldman Sach’s money.
Us industry-watchers know Elevation didn’t actually strike a deal with Facebook or anything. But do you think Elevation’s limited partners care? Nope. The same will go for AH’s LPs if Twitter ever sells or IPOs.