Chris Dixon, the founder of the Andreessen Horowitz crypto fund, says that most of the money in its most recent fund has not yet been spent.
In May, a16z announced a $4.5 billion venture fund for startups in web, cryptocurrency, and the blockchain. On The Block’s podcast on December 19, Dixon said that they had spent less than half of the money they had raised recently. This means that they still have most of the money they raised.
The venture capital firm has invested in almost 50 crypto companies, and it still wants to put more money into the sector.
Also, since launching its first crypto fund in 2018, the company has raised a total of $7.6 billion for the industry.
Dixon said that the venture funds last at least ten years, but “in reality, it’s usually fifteen years, and we extend it,”
He also said that the funds have kept 95% of the investments they have ever made. He said, “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.”
Investors lose money when they sell in a panic during bear markets. Since crypto is cyclical like other markets, smart savers tend to buy and hold through the bad times.
Dixon also said that the company no longer puts money into projects that build on corporate networks like Facebook and TikTok. He also said that decentralised networks are now mature enough to compete with networks run by companies.
In October, CryptoPotato said that a16z’s flagship fund had lost 40% in the first half of the year. By the end of 2022, these losses will be even worse, but Dixon and the company don’t seem to care.
In September, Andreessen Horowitz said that NFTs would get free licences.
Even though the bear market is getting worse, the venture capital giant is not worried. At the time of writing, the markets have lost another percentage point, bringing the total capitalization down to $840 billion.
But they haven’t gone down to the cycle low of $820 billion on November 22, and for now they are still moving in this range.