In a blog post today, Chris Dixon, a general partner at Andreessen Horowitz, announced the a16z crypto venture fund backed with $300 million of fiat currency. Dixon said the new venture fund will include the “best features of traditional venture capital,” and then he bulleted it out;
- We are long-term, patient investors. We’ve been investing in crypto assets for 5+ years. We’ve never sold any of those investments, and don’t plan to any time soon. We structured the a16z crypto fund to be able to hold investments for 10+ years.
- We have an “all weather” fund. We plan to invest consistently over time, regardless of market conditions. If there is another “crypto winter,” we’ll keep investing aggressively.
- We provide operational support to entrepreneurs. Our crypto investments have access to the same 80+ person a16z operating teams as do our non-crypto investments. Our operating teams have deep expertise in executive and technical recruiting, regulatory affairs, communications and marketing, and general startup management. We are responsible participants in the governance of companies and the governance of networks.
- We are flexible with respect to stage, asset type, and geography. One reason we created a new fund is to have maximum flexibility. We invest at all stages, from seed stage pre-launch projects to fully developed later-stage networks like Bitcoin and Ethereum. We’ll invest in traditional financial instruments like equity or convertible notes, and new instruments including the direct purchase of coins/tokens. Crypto is a global phenomenon, with great projects all around the world, and we’ll invest accordingly.
- We are focused on non-speculative use case. We want services powered by crypto protocols to be used by hundreds of millions and eventually billions of people. Crypto tokens are the native asset class of digital networks, but their value is driven by the underlying, practical uses cases.
Dixon echoed the sentiment of many other blockchain enthusiasts stating “it feels like the early days of the internet, web 2.0, or smartphones all over again.”
Having Andreessen join the crypto party is a good bit of validation in the disruption process. While initial coin offerings (ICOs) have been going through a painful adolescence (if that) just about every old school banker acknowledges the power and potential of distributed ledger technology – aka Blockchain.
Dixon believes that blockchain computers have a unique capability of creating trust between users. Everyone knows that trust online (and anyplace else for that matter) is a huge issue. Dixon says that these new capabilities lead to a scalability tradeoff but as these are very much early days, or combustion engine model T, this will change.
“But, as we’ve discovered over the past few years, many other software components can be constructed using the building blocks of trust. Smart contract platforms like Ethereum enable the creation of, among other things, application-specific currencies, digital property rights, open financial instruments, and software-based organizations. From these components, in turn, new infrastructure and applications can be constructed. For example, developers are working on upgrading the core infrastructure of the internet, including storage, networking, identity, and distributed computation.”
While many blockchain enthusiasts have flown too close to the sun Andreessen understand this crypto lust can turn into something more permanent. To manage this new $300 million crypto fund, Dixon has put together a good number of Andreessen team members, plus their newest General Partner: Katie Haun – previously with the US Department of Justice.
The times, are a’changing.