Venture capitalist Marc Andreessen is urging portfolio companies to raise prices aggressively, arguing that higher fees benefit both businesses and customers, even as U.S. unemployment climbs and affordability concerns deepen.
At a Glance
- Andreessen tells founders to “raise prices, raise prices, raise prices”
- Claims customers prefer higher fees because vendors can then improve products faster
- a16z recently raised $15 billion, nearly 20% of all 2025 U.S. venture capital
- Why it matters: The guidance could ripple across tech startups, affecting consumer costs in an already tight economy
Price by Value, Not Cost
Speaking on a recent episode of The A16z Show, Andreessen said pricing strategy is “this magical art and science that a lot of companies don’t take seriously enough.” Rather than basing prices on production costs, he advocates charging according to the value delivered-especially in business-to-business sales.
“A core principle of pricing is that you don’t want to price by cost if you can avoid it. You want to price by value,” he explained, recommending startups price “as a percentage of the business value you’re creating.”
Higher Prices “Good for the Customer”
Andreessen rejects the idea that lower prices automatically serve customers better. Instead, he claims elevated pricing allows companies to reinvest in product improvements.
“The more sophisticated way of looking at it is that higher prices are often good for the customer because the higher price means the vendor can make the product better, faster,” he said, adding he is “always urging founders to raise prices, raise prices, raise prices.”
Controversial Track Record
The billionaire investor embraces controversy as a business tactic. “Generally speaking, the more out there we are, and the more outspoken we are, and the more controversial we are, the better for the business,” he told listeners.
Recent a16z moves include:
- Hiring Daniel Penny, the marine involved in the subway death of Jordan Neely
- Funding an AI company that floods the internet with low-quality content
- Backing Adam Neumann’s new venture after the WeWork collapse
- Investing in Cluely, an app promoting “cheating as a service”
Market Influence
Andreessen’s stance arrives as a16z cements its dominance. The firm’s $15 billion raise earlier this month represents nearly one-fifth of total U.S. venture capital deployed in 2025, giving its pricing philosophy outsized weight across the tech ecosystem.
Economic Backdrop
The guidance comes amid rising U.S. unemployment and a persistent affordability crisis. Critics note the strategy could widen the gap between venture-backed services and cash-strapped consumers.
Andreessen previously dismissed the American middle class as an experiment that “has been run, and it was a catastrophic failure,” and once lived in a residence featuring seven fireplaces.
Key Takeaways
- Andreessen pushes value-based pricing over cost-plus models
- Claims higher fees enable faster, better product development
- a16z’s latest fund gives its pricing doctrine significant market reach
- The approach may test consumer tolerance as economic pressures mount
