I am tickled pink to announce Andreessen Horowitz’s participation in a new project called the Glass Collective.

Along with our friends at Google Ventures and our old partners in crime at Kleiner Perkins, we are working with Google to encourage a new generation of startup entrepreneurs to build applications for Google’s new breakthrough Glass platform.

First, Google Glass itself: Glass is a new wearable computing product and platform being developed by Google.

The thesis of Glass is profoundly transformational — to integrate connectivity and information directly into your field of vision and into your normal daily life. Instead of having a phone in your pocket or a tablet in your briefcase, why not have the Internet in your field of vision when you want it — and why not feed the Internet with live video and audio that matches what you see and hear at any time.

This provocative idea has already inspired a huge explosion of speculation and debate in the technology industry. In situations like this, I always look to history for analogies to try to understand how people are going to come to grips with new technology. One obvious historical analogy is the web browser, which is 20 years old this year — both the browser and Google Glass are windows into the Internet that everyone will be able to use.

But I’d rather reference another transformational technology that is also 20 years old this year. At the same time we were introducing the browser in 1993, Steven Spielberg released his magnum opus, the film Jurassic Park. For those of us who had worked in 3D computer graphics in the years prior, Jurassic Park was a stupendous breakthrough —  the dream of computer graphics truly come to life in a stunningly visceral and emotionally overwhelming way.

In a newly published oral history of Jurassic Park, Spielberg and his producing partner Kathleen Kennedy tell this delightful story:

KENNEDY: I remember getting the phone call where Dennis [their animation genius] said, “I think I have something you and Steven should take a look at.” We saw this wire-frame model of a dinosaur running across the screen, and it caused five or six of us to literally leap to our feet –because it was so extraordinary and –significantly beyond anything we had seen in [animation] up to that point.

SPIELBERG: The last time my jaw dropped like that was when George Lucas showed me the shot of the Imperial cruiser [in Star Wars]. I showed it to [stop-motion effects legend] Ray Harryhausen. He was absolutely enthralled and very –positive about the paradigm changing. He looked at the test and said, “Well, that’s the future.”

When it comes to Google Glass in the context of the Internet, I’m like Ray Harryhausen: Well, that’s the future.

Now, of course, a lot of work remains to be done between today and the full realization of the Glass vision. The exciting part about today’s announcement of the Glass Collective is that just like with the Internet and smartphones, a huge amount of that work will be done by third-party developers, who are going to have in Glass a brand new platform and springboard for creativity to play with. All of us involved in the Glass Collective are absolutely certain that developers are going to create thousands of ways for millions of people to use Glass and improve their lives and the world around them.

And so with the Glass Collective, we are open for business (glasscollective@a16z.com) to seed fund startups to build the first generation of amazing Glass applications.

Ladies and gentlemen, start your compilers.

This is a guest post by Scott Kupor, managing partner, Andreessen Horowitz.

We are holding back the middle class in America. But it’s not for the reasons you think, and the culprits are not those most people think of. Rather, the US government has systematically cut the middle class out of the most important wealth creation opportunity for the next 50 years. Through a series of byzantine regulations, the government has made it virtually impossible for working Americans to enjoy the fruits of America’s greatest strength: innovation.

Over the past decade or so, regulatory changes have reduced the frequency with which the stocks of high-growth companies get offered to the public during their most dramatic phases of growth. That prevents ordinary investors from getting in on the wealth creation, and hampers the creation of middle class jobs. Fortunately, there’s a simple solution.

We’ll get to that shortly. But first let’s look at the cases of two companies founded by Harvard drop-outs.

Microsoft went public in 1986 at roughly a $500 million market cap. Today, Microsoft has a market cap of $234 billion. Thus, the public investors in Microsoft have had the opportunity to realize $233.5 billion in market cap appreciation; the private investors had only a $500 million head-start. From IPO, a single share of Microsoft stock has appreciated close to 500x.

Facebook, by contrast, went public in 2012 at roughly a $100 billion market cap. That means that, whatever public stock price appreciation Facebook has over the coming years, private investors have had a $100 billion head-start against the public investors. Even if you were prescient enough to buy Facebook at its public low of approximately a $50 billion market cap, the private investors remain way ahead. If you bought Facebook stock at its IPO, to realize a similar multiple that Microsoft’s public shareholders have earned, Facebook’s market cap would need to reach nearly $50 trillion, roughly the size of the total market capitalization of all publicly-traded companies in the world.

What accounts for the differences between these two cases?

Up until the last decade, about 300 start-up companies went public each year, with more than half of those companies raising less than $50 million in proceeds (small IPOs.) The average age of the companies at the time of IPO was just under five years old.

Fast forward to the most recent decade and fewer than 100 companies each year have gone public, with less than one-third of those being small IPOs. The average age of the companies going public has also roughly doubled to 9.4 years.

Why should we care if the world has fewer billionaire public company founders and CEOs?

Because IPOs democratize wealth creation and create jobs for the 99.9% of Americans who are unlikely to be the next Zuckerberg, fueling long-term economic growth for the country and guaranteeing access for all to the American Dream.

Indeed, we are quickly creating a two-tiered investment market—one for wealthy, accredited individuals and financial institutions and a second for the remaining 96% of Americans.

If you are an accredited investor (which the rules define as someone with annual income of at least $200,000 or a net worth of $1,000,000), you can buy or sell privately-held stock of high growth, startup companies via exchanges such as Second Market and SharesPost. If you are an accredited investor, you can become a limited partner in one of over 400 venture capital firms that invest in such companies. If you are an accredited investor, you can buy privately held stock of such companies directly from the issuing companies themselves.

However, If you are among the 96% of Americans that are not accredited investors, you can wait the 9.4 years that it takes for the average startup to go public and miss out on all of the price appreciation in the private markets that inures to the benefit of accredited investors.

Despite the many very positive changes introduced by Congress via the 2012 Jumpstart our Business Start-up Act (or the JOBS Act), the middle class remains sidelined. On the one hand, the JOBS Act potentially exacerbates the already “long time to IPO problem” by increasing to 2,000 the number of shareholders a private company may have before it is required to report as a public company.

Yet, in the same JOBS Act, we welcome “the 96%” least-wealthy Americans to invest (via crowdfunding) in the absolute riskiest stage of new company formation—early, seed-stage financings. Somehow, we have concluded that unaccredited investors should be able to likely lose their hard-earned money by investing in the most risky of asset classes. Yet precisely as the risk diminishes dramatically in the subsequent stages of a company’s development, the spoils go only to the wealthy. As veteran investor Steve Rattner pointed out recently, most Americans would have better odds of winning the lottery than of successfully investing in seed-stage companies.

There’s another important implication of the changes that have lengthened startups’ path to IPOs. On average, the Kaufman Foundation estimates that companies that go public increase their post-IPO employment levels by approximately 45%. More significantly, for small IPOs, that number more than triples to 156%. This makes sense—an IPO is a capital raising event for a company. That new capital, in turn, is invested by the company to increase growth, which requires more employees to achieve.

Had we not seen IPO volumes fall off of a cliff in the last decade, the Kaufman Foundation estimates that we would have created an estimated 1.9 million new jobs. Even more significantly, Professor Enrico Moretti of UC Berkeley has identified a multiplier effect with technology-related jobs. For every one  new technology job, Professor Enrico estimates that five  new service sector jobs are created.

To put the job numbers in context, the number of total US employees in 2001 was just shy of 138 million people; 10 years later, that number was only 139 million. Thus, the potential to add a minimum of two million jobs—and potentially more with the multiplier effect—to an otherwise stagnant employment environment is immense.

What’s the solution?

A number of policy and market changes—all with well-intentioned goals—have created a hostile environment for new IPOs and, in particular, for small IPOs. Arguably the most significant among the changes was the 2001 move to decimalization. Much has been written about the “death star” of decimalization, a phrase first coined by David Weild, former vice chairman of Nasdaq. But simply stated, decimalization eliminated all of the profits from trading small-capitalization stocks. How did this happen? Because decimalization reduced the “tick size,” the minimum increment in which stock prices can trade, to a penny (from its previous level of 25 cents). Thus, a trader who previously might have purchased a block of small-cap shares knowing that a $0.25 tick size likely represented his minimum profit potential on a trade now found his minimum profit potential reduced to a penny. Facing this uneconomic situation, small-cap traders simply abandoned the market, killing liquidity for these stocks.

The 2003 Global Research Settlement (which prohibited investment banking revenue from subsidizing investment research) proved the final death knell. Pre-decimalization and pre-Global Research Settlement, traders of small IPOs could actually make money, and profits from this trading activity subsidized the publication of investment research for small IPOs. Thus, the double whammy of these two policy changes not only sucked all of the profits out of trading the stocks of small IPOs—making it very difficult for these companies to build liquidity by attracting retail investors—but also choked off the use of trading profits to fund research on these companies. Lacking the ample liquidity that active trading desks and investment research create, newly public small IPOs simply can’t attract new, long-term shareholders, raise new capital and ultimately grow their businesses.

All hope is not lost, however.

The simple act of jettisoning decimalization would resuscitate the small-cap IPO market. And the US Securities and Exchange Commission already has the authority under the JOBS Act to make this happen. The SEC could test this change in the form of a broad, intermediate-term pilot and could even provide boards of directors of small IPO issuers the discretion to determine whether doing so would be in the best interests of the company and its shareholders.

Here’s what higher “tick sizes” will mean:

—Trading desks will commit capital to trading small-cap stocks.

—Research analysts will cover small-cap stocks.

—Institutional sales desks will market small-cap stocks to their clients.

—Retail investors will return to this market.

As a result, we will increase liquidity and reduce volatility for small-cap stocks, shocking the small-cap IPO market back to life and breaking the shackles that are holding back the middle class.

I am humbled and grateful to be a co-winner of the 2013 Queen Elizabeth Prize. Thank you to the judges, and congratulations to Robert, Vint, Louis, and Tim.

I would first like to acknowledge my partner in creating Mosaic, Eric Bina. Eric co-wrote the original code for Mosaic with me — specifically all the difficult parts.

I would also like to acknowledge Larry Smarr, Joe Hardin, and all of my colleagues at NCSA and the University of Illinois at the time.

I would further like to acknowledge the distributed group of innovators and contributors who collectively built the web as we know it today during the era in which Mosaic was created.

I will donate the prize money to charitable programs that help spread the culture and foundational knowledge of engineering — such as scholarships and summer programs for engineering students.

It is amazing to think that the consumer Internet and the World Wide Web are still only 20 years old. So much important work has been done in the last 20 years — including bringing the Internet to more than 2 billion people around the world but also so much important work has yet to be done. I firmly believe our field’s best days are still ahead of us, and I can’t wait to see what the next generation of engineers will accomplish.

I’m excited to welcome Chris Dixon to Andreessen Horowitz as our seventh General Partner!

Chris has an extensive and distinguished track record in Internet entrepreneurship and angel investing, including all of the following:

  • Cofounder of two prominent startups of the last decade, SiteAdvisor and Hunch, both of which had successful exits to McAfee and eBay respectively.
  • Highly successful personal angel investments in more than 50 startups including Hipmunk, Foursquare, Kickstarter, Stripe, Pinterest, Dropbox, Codecademy, Stack Overflow, Bloomreach, Optimizely, Trialpay, OMGPOP, and our own favorite, Skype.
  • Cofounder of a prominent East Coast seed venture fund called Founder Collective. Chris’s investments through Founder Collective include MakerBot, Ifttt, Milo, Betaworks, Groupme, and Buzzfeed.
  • Prominent blogger on entrepreneurship and startups.

Those are the facts. Here’s the context that made it clear to us that Chris is our kind of person:

  • Chris began programming at 8 (beating me by a whole year), starting on a TRS-80 Model 1.
  • Chris had the good judgment to both join one of the great legendary venture capital firms, Bessemer, in 2003, and also to leave to start his own company, SiteAdvisor, two years later.
  • Chris started SiteAdvisor in 2005, during the height of the nuclear winter for startups following the dot com bust. It’s hard to think back from the current startup boom to that time, when only the most determined and bull-headed entrepreneurs were starting companies. As my partner Ben often says, the most important attribute for entrepreneurs is courage, and the founding of SiteAdvisor showed that Chris has it in spades.
  • Chris also started angel investing in 2006 — again, this was a time in which the Internet angel investors who were active in the market could be enumerated on the fingers of two hands. (Most of the prior generation of angel investors had their fingers burned entirely off.)
  • Hunch, Chris’s second company, was much higher profile than SiteAdvisor but never quite clicked as a business. To his enormous credit, rather than giving up, he guided Hunch to a successful acquisition by eBay. Since I’m on the eBay board, I’ve had the chance to watch the deal from the inside all the way through, and I think the Hunch/eBay deal could be a case study for successful acquisitions and integrations of early-stage startups by large technology companies. The highly talented Hunch team is doing great things within eBay today.
  • Both in the reference calls we did prior to making our decision, and in the incoming calls we have received since Kara Swisher inconveniently (and accurately) leaked our discussions with Chris on Saturday, one central fact keeps coming up about Chris in his role as an angel investor: he is one of the most valuable and useful investors any entrepreneur can have. Entrepreneurs who work with Chris routinely say that he was a bigger contributor to their success than their own VCs — a characteristic we really respect.
  • Chris’s blog is not only one of the best living textbooks of entrepreneurship in the world, but conveys a distinct point of view on how to build a company. When you work with Chris, you know what you’re getting  — in particular, his value system shines through.

We’re thrilled to welcome Chris to the team!

We are delighted to announce that the six General Partners of Andreessen Horowitz, with our families, are all committing to donate at least half of all income from our venture capital careers to philanthropic causes during our lifetimes.

The reason is simple.  We are fortunate to work with some of the best entrepreneurs and technologists in the world, and in the process help create great and valuable companies.  That activity, done well over decades, can generate a lot of money that can then be productively deployed philanthropically back into the society that makes it all possible.  We love participating in this process, and we hope that our philanthropy can, over time, help make the world a better place.

As an initial catalyst, we are making an immediate group donation of $1 million to a set of six vital Silicon Valley-related nonprofit organizations.  Those causes, and their respective sponsors, are:

Signed,
Ben, Jeff, John, Marc, Peter, and Scott

Over the last several weeks, there have been erroneous reports in the press that my partner Jeff Jordan and/or I might become an operating executive of Yahoo in some capacity.

To be crystal clear, neither Jeff, nor I, nor any of our partners at Andreessen Horowitz, are in the running for, or would accept, any operating role at Yahoo, including CEO, acting CEO, chairman, or executive chairman.

Jeff and I have high regard for Yahoo, but we are fully committed to our day jobs as general partners at Andreessen Horowitz and board members of our portfolio companies.