Why is the DOJ investigating Andreessen Horowitz’s board seats?

The Department of Justice has been investigating Andreessen Horowitz for nearly a year over a board arrangement involving two of its partners, according to a report. Ben Horowitz sits on the board of Databricks, while Martin Casado sits on the board of Fivetran, two portfolio companies that have begun to compete with each other. The probe reportedly relies on a 112-year-old antitrust law that is rarely applied to venture capital firms. This scrutiny affects the broader VC industry, which routinely places partners on the boards of multiple startups that may later find themselves in the same market.

The arrangement itself is not unusual on its surface. Board conflicts have long been a part of the venture business, and Databricks and Fivetran were not necessarily direct competitors at the time Andreessen Horowitz first invested in them. The issue arises as portfolio companies expand their product lines and move into each other’s territories, blurring the lines that once kept them separate. The DOJ’s interest appears to center on whether such overlapping board seats cross a legal line.

The investigation was discussed this week on the TechCrunch Equity podcast, where hosts Kirsten Korosec, Anthony Ha, and Sean O’Kane examined the details. The conversation also explored what the probe could mean for how venture firms manage board seats going forward. As startups increasingly pivot and scale, the boundaries between a16z’s portfolio companies are shifting, making it harder for firms to avoid conflicts.

The story was reported by Theresa Loconsolo, who is an audio producer at TechCrunch and focuses on the Equity podcast. She joined TechCrunch in 2022 after working at a four-station conglomerate, where she wrote, recorded, voiced, and edited content, and engineered live performances and interviews. Loconsolo is based in New Jersey and holds a bachelor’s degree in Communication from Monmouth University. She can be reached by email.

For US technology companies and investors, the DOJ’s move signals a potential shift in how antitrust law is applied to venture capital. Traditionally, regulators have focused on mergers and acquisitions among large public companies, not on board seats held by investors in private startups. This case could set a precedent for how the government views interlocking directorates in the tech sector, particularly when startups evolve into rivals after receiving funding.

The outcome of the investigation remains unclear, and the specifics of what the DOJ is examining have not been fully disclosed. What is clear is that venture firms may need to reconsider how they allocate board positions as their portfolios grow and converge. The a16z case highlights a growing tension between the hands-on role VCs play in guiding startups and the legal risks that come when those startups start to compete.

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