a16z has Billions in Store to Invest in Crypto and Web3: CEO says
- a16z CEO Chris Dixon revealed that the VC firm has billions left in its most recent crypto fund which are yet to be deployed.
- Dixon said that venture funds generally have a minimum of 10 to 15-year lifespans, and his company is aims extend them.
- “The worst thing you can do in venture capital is sell good assets too early,” Dixon said.
- Interestingly, the flagship fund of a16z was down 40% in the first half of the year and losses will pile up as year ends.
The founder of American venture capital firm Andreessen Horowitz, or popularly known as a16z, Chris Dixon, has recently revealed that the majority of the capital in the firm’s most recent crypto fund has not been deployed yet and revealed that there are still billions left.
This declaration from Dixon comes at a time when many crypto firms are struggling to operate and there is little to no trust remaining in the investors who have got their assets stuck on multiple platforms like FTX and Celsius Network.
During an interview with The Block, Dixon talked about his company’s $4.5 billion venture fund for web3, crypto, and blockchain startups, which was announced in May this year. He stated that a16z crypto has used less than 50% of the fund, leaving the majority of the fundraising undeployed.
Dixon said that the venture capital giant has an active crypto portfolio of around 50 companies, and is still dedicated to expanding its investments in the sector. It is important to note that, following the launch of its first crypto fund in 2018, a16z Crypto has collected over $7.6 billion for the sector.
Displaying optimism, Dixon said that venture funds generally have a minimum of 10 to 15-year lifespans, and his company is aiming to extend them. It is also crucial to note that a16z recently relaunched the Crypto Startup School with plans to expand it into a full accelerator program. The VC firm will invest 500,000 USD in each crypto startup that participates in the program.
“All of our data shows that the vast majority of the returns come in the later years of the funds, and the worst thing you can do in venture capital is sell good assets too early,” Dixon said.
Bear markets cause losses when people panic and sell. However, since the cryptocurrency market is cyclical, smart investors typically buy and hold through the difficult times, according to Dixon.
The founder further revealed that the company no longer funds projects built on top of corporate networks like Facebook and TikTok. He believes that the decentralized networks have gained enough maturity to compete with corporate networks.
The venture capital giant has not been discouraged by the intensifying bear market. While the flagship fund of a16z was down 40% in the first half of the year and those losses will worsen by the end of 2022, Dixon and the firm don’t seem frightened.
Interestingly, a16z announced a free licensing system for NFTs in September, showing its faith in the potential of the Web3 sector.
It is crucial to note that instutional investors have retracted their investments in the blockchain and crypto industry due to huge losses suffered in 2022 which can called as one of the worst years in crypto. However, there are many supporters of blockchain tech and digital assets as well. For example, billionaire investor and CEO of Galaxy Investment Partners, Mike Novogratz, has predicted Bitcoin (BTC) will reach $500,000 in the near future.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
