a16z Yet to Deploy Over 50% of Crypto Fund 4, Says Chris Dixon
UTC
by Mayowa Adebajo · 2 min read
Photo: TechCrunch / Flickr
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.
a16z and Its Crypto Hodling Business Model
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.
FTX Escape
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.
Although 2022 witnessed a major crash in crypto fundraises, it was still higher in comparison to 2018, 2019, and 2020. Market analysts expect VC investments in crypto to resume by the summer of 2023.
The leading investor is Andreessen Horowitz, a private American venture capital firm that invests in seed, start-ups, early, mid-stage, growth, and late-stage. Earlier, a16z already invested in SpaceX, along with such companies as Founders Fund, Sequoia, Gigafund, and others.
Aztec said that they would use these funds to build an encrypted architecture on Ethereum that allows individuals to properly use blockchains without exposing any identifiable information.