The U.S. Justice Department has spent nearly a year investigating Andreessen Horowitz over whether its partners’ board seats at two now-competing data companies violate a 112-year-old antitrust law, according to a Bloomberg report that has left much of the venture capital industry puzzled.
The probe targets a16z’s board positions at Databricks, the $190 billion data analytics giant, and Fivetran, which merged with dbt Labs in June. Ben Horowitz, the firm’s co-founder, sits on Databricks’ board, while partner Martin Casado holds Fivetran’s seat. The DOJ declined to comment, and Andreessen Horowitz did not respond to requests from Bloomberg or TechCrunch.
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Why the probe surprised venture capitalists
Several VCs told TechCrunch they were taken aback by the investigation, largely because the two companies were not rivals when a16z made its investments. Databricks built its reputation on cloud storage and lakehouse architecture, but its Lakeflow product has since pushed the company into AI data pipelines and application connectors — territory that has long been Fivetran’s core business.
For a firm that has backed hundreds of startups, such overlaps are almost inevitable. Portfolio companies routinely pivot, expand, or merge into adjacent markets, and what looked like a clean portfolio at the time of investment can become a competitive tangle years later. The venture industry has generally become more tolerant of backing direct rivals — many prominent firms have funded both Anthropic and OpenAI — but board seats create a different class of problem. Directors have access to sensitive strategic information that ordinary investors never see, including pricing strategies, acquisition plans, and board-level discussions of competitive threats.
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How a16z could resolve the conflict
Because different partners hold the two seats, a16z has a straightforward path to compliance: a so-called Chinese wall between Horowitz and Casado that would bar them from sharing confidential information about the two companies with each other. One investor told TechCrunch this arrangement is workable in practice, though it places real limits on how the two partners can collaborate internally.
The alternative — having one partner step down from a board — is the more traditional remedy, but it carries reputational costs. If the DOJ forces a16z to surrender a seat, the broader implications could ripple through the venture industry. Founders may begin to discount the value of board commitments from top-tier firms, knowing that a future portfolio overlap could force those investors to resign at an awkward moment.
What the Clayton Act means for the venture industry
Section 8 of the Clayton Act has rarely been wielded against venture capital firms, which is precisely why the industry is watching this case closely. The law was written in 1914 to prevent interlocking directorates in the railroad and industrial economy, long before the modern startup ecosystem existed. Its application to a VC firm’s portfolio companies raises novel questions about how antitrust regulators should treat board representation in a world where firms routinely hold dozens or hundreds of board seats.
The DOJ’s interest in a16z may signal a broader shift in how regulators view the concentration of power in the technology sector. For now, the venture community is left to speculate about whether this is a one-off enforcement action or the opening salvo in a more aggressive approach to board-level conflicts in private markets. The outcome could reshape how top firms structure board participation in their largest portfolio companies.
