Media Money with Julia Boorstin

Marc Andreessen Talks Facebook, Romney and Yahoo

Marc Andreessen
Ryan Anson | Bloomberg | Getty Images

I sat down with legendary investor Marc Andreessen for an interview at Fortune's Brainstorm Tech conference in Aspen.

Though he can't comment specifically about Facebook because of his role on the board, he ended up revealing quite a bit about his thoughts on the company's IPO and CEO Mark Zuckerberg's leadership, and controlling stake in the company.

Bottom line: it's a hard time to go public, and a hard time to be public, which is why "many of the most interesting companies are either not going public or going public a lot later," Andreessen says. Facebook, he says, will be a very successful public company, but it only went public after reaching a significant size and scale.

The company had no choice: Andreessen says companies need to be "fortresses" when they go public, to "sustain the assault from all over the place ... from regulators, hedge funds, from activists, from short sellers, from governance experts."

What about concerns that Zuckerberg's controlling stake in the company could be risky? Andreessen sees no problem at all. When you have a leader like a Zuckerberg, or a Bill Gates or a Larry Ellison, he says "the right thing to do is get behind that person and give them the rope to execute their strategy." He says he doesn't see a lot of cases where investors would be better off if they inserted themselves into a company's management or governance.

Facebook's IPO has had one distinct impact on Andreessen—it's made him wary of the Nasdaq. He tells me that he advises companies he's invested in to be "very cautious," saying "you would think that the electronic stock exchange would be good at trading stocks electronically. You would be mistaken."

But the biggest problem, Andreessen says, is over-regulation, which is why he calls for "fundamental regulatory reform," including the repeal of Sarbanes-Oxley and Regulation Fair Disclosure, plus the enforcement of market manipulation laws, a rethink of the theory of governance and the role of short selling.

All these issues discourage companies from going public, which he says splits the markets into a two tier system, which is bad for entrepreneurs, making it harder for them to raise money in the public markets, and bad for investors, by preventing them from investing in the fastest-growing companies.

When it comes to the presidential election, Andreessen says that though he's "generally a fan" of and was a supporter in 2008, now he's "more pro-Romney." He says he believes that a Republican administration would be "considerably more open on regulatory issues, and the markets would be more competitive under a Romney administration."

And of course we had to ask Andreessen to weigh in on Yahoo's new CEO Marissa Mayer, saying that her selection is a sign that the board wants to shift Yahoo away from content, to focus on product.

Andreessen says focusing on product is a good thing—generally the right call for Silicon alley companies. And though Andreessen says Yahoo has a big challenge and needs to rebuild its product leadership, Mayer can rebuild the company.

For more on Andreessen's thoughts on the economy and where he's investing right now, watch the full interview in the video clip.

Questions?  Comments?