DOJ Investigates Andreessen Horowitz Over Board Seats

The U.S. Department of Justice has spent almost a year investigating Silicon Valley venture capital firm Andreessen Horowitz, also known as a16z, over potential antitrust violations. The federal probe centers on two of the firm's prominent partners holding board seats at companies that have increasingly grown to compete with one another. Specifically, co-founder Ben Horowitz serves on the board of data giant Databricks, while general partner Martin Casado holds a board seat at data integration startup Fivetran.

To pursue this investigation, regulators are dusting off a 112-year-old antitrust law that has historically targeted traditional corporations but has rarely been applied to the venture capital ecosystem. The law prohibits individuals from serving as directors of competing corporations, a practice known as interlocking directorates. While Databricks and Fivetran may not have been direct competitors when Andreessen Horowitz initially backed them, their product offerings have expanded over time, bringing them into direct conflict and drawing regulatory scrutiny.

For venture capital practitioners, this federal scrutiny represents a significant shift in how investment firms must manage their portfolios and governance. Historically, VCs have frequently taken board seats in multiple companies within the same broad sector to guide growth and protect their investments. If the Department of Justice successfully applies this century-old antitrust framework to startup boards, venture firms will have to monitor their portfolio companies' product roadmaps far more aggressively to avoid accidental legal exposure.

As startups scale and inevitably expand into adjacent markets, investors may be forced to prematurely relinquish board seats or decline follow-on funding rounds to prevent regulatory overlap. This probe signals that the era of passive compliance regarding board appointments is ending. Venture capitalists must now treat board seat assignments not just as strategic privileges, but as active compliance risks that require ongoing legal vetting as market boundaries shift.