The Path of Cryptocurrency Investment by Top Global Venture Capital Firms

Andreessen Horowitz, abbreviated as a16z, is a venture capital firm founded by Marc Andreessen and Ben Horowitz in 2009. The firm quickly rose to prominence due to its successful investments in several well-known internet companies, becoming an important force alongside other top venture capital firms in Silicon Valley.

Currently, a16z manages assets exceeding $35 billion, with a wide range of investment areas, including artificial intelligence, biomedical, consumer technology, encryption, enterprise services, and more. This article will focus on a16z's dedicated fund in the field of cryptocurrency—a16z crypto.

1. Entering the encryption field

a16z was one of the first to invest in the encryption field, starting in 2013. At that time, many traditional venture capital firms were still skeptical of the encryption industry, while a16z took the lead in participating in a $25 million Series B funding round for a certain cryptocurrency exchange platform, and subsequently made several follow-on investments. This decision not only brought substantial returns to a16z but also established its leading position in the encryption investment field.

To better engage in investment in the encryption field, a16z established the crypto venture fund a16z crypto in 2018. The fund has conducted 5 rounds of fundraising to date, managing a total of over 7.6 billion US dollars.

• The first fund in 2018 had a scale of approximately 300 million US dollars.
• In April 2020, the second fund had a scale of approximately $515 million.
• In June 2021, the third fund raised approximately $2.2 billion, setting a record for the fundraising size of encryption funds at that time.
• Launched the fourth fund in May 2022 (approximately $4.5 billion) and the Web3 gaming fund ($600 million)

According to reports, a16z is planning to raise about $3.4 billion for its next early-stage and seed fund, focusing on emerging fields such as encryption and biotechnology.

2. Team Composition

a16z adopts a partnership system for all employees, and each specialized fund will hire professionals in relevant fields as investment partners.

Chris Dixon is the founder of a16z crypto. Although he joined a16z in 2012, he has led the company's significant investments in the encryption field. In 2022, Chris Dixon topped Forbes' "Global Best Venture Capitalists" list.

Before joining a16z, Chris Dixon was already a successful entrepreneur and investor. He co-founded the internet security company SiteAdvisor and the technology recommendation company Hunch, founded the venture fund Founder Collective, and made multiple personal angel investments.

With the rapid development of the encryption industry, Chris Dixon has become one of the key figures at a16z, holding a status comparable to that of the company's iconic founders.

According to public information, a16z currently has a total of 546 employees, of which 99 (18%) focus on encryption, reflecting the company's high emphasis on this field. Among these 99 people, only 15 are specifically responsible for investments, while the remaining approximately 80% are responsible for post-investment services such as marketing, recruitment, legal, and technical work, reflecting a16z's consistent focus on post-investment services.

3. Investment Characteristics

a16z not only invested in many well-known internet companies during the Web2 era, but also bet on many high-value enterprises in the Web3 era, becoming a barometer in the encryption investment field. Here are several main investment characteristics of a16z crypto:

adhere to "all-weather" investment

Regardless of market conditions, a16z crypto continues to invest consistently. For example, its first two funds were launched during the cryptocurrency bear market from 2018 to 2020, accumulating over $800 million in assets under management. Even in the current cryptocurrency winter, a16z has made more than 30 investments in the past year, with 11 of those being lead investments.

high proportion lead investment and follow-up investment

Data shows that a16z crypto ranks first in terms of cumulative leading investment rounds, with a historical total of 109 rounds. At the same time, a16z crypto is also keen on making additional investments in promising projects, demonstrating strong determination.

has a wide range of investment

Since its establishment, a16z crypto has invested in hundreds of encryption projects, covering almost all sectors of the encryption industry. a16z is known for its "generous investments" and has demonstrated strong competitiveness in investments across multiple projects.

Focus on media promotion and project packaging

a16z is adept at utilizing its own media channels for promotion and marketing. The company's official website resembles a media platform, filled with various reports and articles. a16z crypto continues this tradition, with its partners often speaking out for the encryption industry in public.

In addition, a16z places great importance on the packaging of the projects it invests in, drawing on the operational model of Hollywood talent agencies to provide comprehensive support for the invested companies.

4. Investment Landscape of Potential Projects

a16z crypto's investment vision has garnered significant attention. Below are some potential projects selected from its portfolio, excluding those that have already issued tokens, failed projects, those with smaller financing amounts, or projects that primarily serve traditional industries:

(Note: The original text here includes a chart that lists multiple potential projects and their financing situations, but since the image cannot be directly displayed, the specific project list is omitted here.)

V. Conclusion

The transition of a16z from "software golden finger" to "encryption golden finger" reflects its keen grasp of the trends of the times. As stated on the a16z crypto official website, the internet has gone through three eras: the first era (1990-2005) when a16z was not yet established, the second era (2005-2020) which witnessed the rise of a16z, and now we are in the third era, where a16z is striving to continue writing its glorious chapter.