Andreessen Horowitz Moves Privacy and Security Compliance Due Diligence to Center Stage

Venture capital firm Andreessen Horowitz is putting its money where the need to protect its technology company investments lies, in regulatory due diligence for privacy and cybersecurity compliance.

On April 16, the firm announced that it has formed a “policy division to help the firm’s technology companies avoid afoul of federal or state lawmakers” and has hired former Facebook General Counsel Ted Ullyot to head the division. “The firm has no shortage of portfolio companies facing regulatory or political hurdles as Washington and state regulators are increasingly focused on updating privacy laws, setting new rules for technology and sharing-economy companies like Airbnb.”

Ullyot highlighted the need for Andreesen to exercise diligence in this area and to assist its portfolio companies to meet regulatory requirements. “It’s important, he said, “For companies to navigate” through the investigations, regulatory proceedings and resulting unwanted attention from the public and politicians in the event those compliance metrics are not met.

Andreessen’s move is consistent with a trend of investment in cybersecurity companies by venture capital, as reported in The Wall Street Journal on April 19, 2015.  The Journal noted that in 2014 venture capitalists invested a record amount, $1.77 billion, in privately held companies in the cybersecurity industry.

If you have questions regarding privacy and cybersecurity compliance metrics for your company or compliance due diligence for a company in which your organization wishes to invest, please contact Kenneth N. Rashbaum.