A16Z's transformation from a small, generalist partnership to a large, specialized firm was a deliberate answer to a fundamental industry problem: the traditional partner model doesn't scale for deploying capital and making decisions in today's massive, professionalized venture market.

Applying Conway's Law to venture, a firm's strategy is dictated by its fund size and team structure. A $7B fund must participate in mega-rounds to deploy capital effectively, while a smaller fund like Benchmark is structured to pursue astronomical money-on-money returns from earlier stages, making mega-deals strategically illogical.

Great investment ideas are often idiosyncratic and contrary to conventional wisdom. A committee structure, which inherently seeks consensus and avoids career risk, is structurally incapable of approving such unconventional bets. To achieve superior results, talented investors must be freed from bureaucratic constraints that favor conformity.

Unlike committees, where partners might "sell" each other on a deal, a single decision-maker model tests true conviction. If a General Partner proceeds with an investment despite negative feedback from the partnership, it demonstrates their unwavering belief, leading to more intellectually honest decisions.

Large, contrarian investments feel like career risk to partners in a traditional VC firm, leading to bureaucracy and diluted conviction. Founder-led firms with small, centralized decision-making teams can operate with more decisiveness, enabling them to make the bold, potentially firm-defining bets that consensus-driven partnerships would avoid.

The conventional wisdom that a VC can only handle ~8 board seats is incorrect for firms with a strong platform. When a firm provides dedicated teams for recruiting, business development, and policy, partners can scale their time effectively. They are freed to focus on high-leverage strategic advice, not operational tasks.

VC firms with shared partner control struggle to scale. Growth necessitates periodic reorganizations, which inevitably redistribute power. When partners vote on these changes, they optimize for their local interests, making it impossible to pass the necessary structural updates. This democratic model inherently prevents scaling.

A16z's growth fund avoids traditional investment committees, which can lead to politicization and slow decisions. Instead, it uses a venture-style "single trigger" model where one partner can champion a deal, encouraging intellectual honesty and speed.

Unlike corporate executives who respect hierarchy, top VCs are idea-generators who resist rules. Horowitz states the key to managing a VC firm is proactive organizational design that minimizes potential conflicts, which are far more destructive than in a typical company.