The DOJ is looking at how VCs sit on board seats — a16z included

The Justice Department has opened a criminal investigation into whether venture capital firms are running afoul of antitrust law by stacking board seats across multiple companies in the same sector. The investigation is focused on a16z, the biggest firm in the space, and its practice of placing partners on the boards of portfolio companies that compete with each other.

The core question is whether these board seats amount to an illegal conspiracy. It's one thing for a VC to have a seat at a company it invested in. It's another thing to sit on the boards of three or four firms in the same market — the same market where those companies compete for the same customers and talent — and let the same people weigh in on strategy across all of them. That's where the DOJ's eye is pointed.

The investigation is still in its early stages and the government hasn't charged anyone yet. But the fact that it's being pursued at all means a lot of VCs are going to start asking their lawyers hard questions about whether their board arrangements hold up. Some firms already pull back; others may tighten the language in their board charters. The bigger playbooks — the ones where a single partner sits on a dozen boards across a sector — are suddenly less comfortable.

Why this matters for us: if VCs get forced to step back from board seats, the people who actually run the companies — founders, operators, the cousins who keep the shop open — get a louder voice at the table.