Chris Dixon opens up on a16z’s venture model.
General partner at Andreessen Horowitz (a16z), Chris Dixon, has assured that the bigger part of the firm’s last crypto fund is yet to be deployed. The venture capital firm raised $4.5 billion in May, to bring its total blockchain investments to over $7.6 billion. At the time, the firm earmarked $1.5 billion for seed investments and dedicated the remaining $3 billion to venture investments.
Speaking in a recent interview on The Block’s The Scoop, however, Dixon confirms that the majority of the most recent fund remains unused. He said:
“We’ve deployed less than 50%, so we have the majority of our recent fundraise left.”
Additionally, he spoke about a16z crypto funds and how they differ from most crypto hedge funds. That is especially in terms of flexibility of deployment. In his explanation, he shared that anyone who intends to invest in their fund should not expect returns on their investments so soon. According to him, commitments will have a lifespan of about 10 years at least, and could run up to 15 years or more.
Dixon also disclosed what appears to be an interesting aspect of a16z funds. He shared how the firm has managed to keep 95% of whatever tokens they have ever invested in.
He assures that the firm’s venture model does not allow for it to sell off its holdings even amid the ebbs and flows. According to him, the worst thing in venture capital is selling good assets too early.
Without a doubt, the collapse of the FTX exchange has had quite an impact on many crypto-based firms across the board. Currently, a vast majority of firms are still reeling from the huge blow that the collapse dealt them. But a16z has somehow escaped the hit, albeit in a surprising manner.
Dixon insists that it is a core a16z thesis to identify tech innovations. And that once an exchange does not have on-chain trust and an off-chain regulated trust, putting money there would be a no.
So far, a16z has established itself as a titan in Silicon Valley, backing several crypto startups including Coinbase and Sky Mavis.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.