Ben Horowitz says that investing teams shouldn't be 'too much bigger than basketball teams'

• Ben Horowitz said his rule of thumb is about five people on an investing team.
• He said Andreessen Horowitz maintains lean teams and strong communication across verticals.
• AI tools are enabling startups and VCs to thrive with fewer employees.

Ben Horowitz is a big fan of tiny teams.

On an episode of the A16z podcast, the Andreessen Horowitz cofounder shared how his venture capital firm maintains a lean operation despite being one of the world's largest.

"An investing team shouldn't be too much bigger than a basketball team," he said, referring to advice he got from famed American investor David Swensen in 2009.

He added, "A basketball team is five people who start, and the reason for that is the conversation around the investments really needs to be a conversation."

Horowitz cofounded the Silicon Valley VC firm with Marc Andreessen in 2009. Before A16Z, he ran enterprise software company Opsware, which Hewlett-Packard acquired.

A16z has backed marquee companies including Meta, Airbnb, GitHub, and Coinbase.

The VC said he always kept the basketball team size in mind but also knew that the firm had to expand to keep up with how "software was eating the world," his signature phrase. The solution was to split the firm into different investment verticals.

To maintain good communication, staff attend other teams' meetings when investment themes overlap.

The firm also organizes a two to three-day offsite twice a year, "with not much agenda."

Horowitz said that people who join them from other firms say that A16Z has "less politics" than firms with 10 or 11 people because his firm has a culture where politicking is "disincentivized."

A16z might have been early to the tiny team trend, but it's catching on fast with VCs and startups across the world.

Startups are actively seeking to stay small, with many having fewer than 10 people. Founders told Business Insider that AI and vibe coding tools have boosted their productivity, allowing them to get things done with far fewer people. Less politics and bureaucracy are also big pluses, they say.

"We're going to see 10-person companies with billion-dollar valuations pretty soon," OpenAI CEO Sam Altman said in February 2024. "In my little group chat with my tech CEO friends, there's this betting pool for the first year there is a one-person billion-dollar company, which would've been unimaginable without AI. And now will happen."