According to Andreessen Horowitz crypto fund founder Chris Dixon, the majority of the capital in its most recent fund has yet to be deployed.
In May, a16z announced a $4.5 billion venture fund for web3, crypto, and blockchain startups. Speaking on The Block’s podcast on Dec. 19, Dixon said that they had deployed less than 50%, so have the majority of the recent fundraise left.
The venture firm has an active crypto portfolio of almost 50 companies, and it is still keen to expand its investments in the sector.
Furthermore, the company has raised a total of $7.6 billion for the industry following the launch of its first crypto fund in 2018.
A16z Hodling For The Future
Dixon said that the venture funds have a minimum ten-year lifespan, adding, “honestly, it’s usually 15 years, and we extend it,”
He added that the funds have kept 95% they have ever invested in, stating:
“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,”
Losses are made when investors panic sell in bear markets, and crypto, like other markets, is cyclical, so savvy savers tend to buy and hold through the tough times.
Dixon also said that the firm no longer invests in projects building on top of corporate networks such as Facebook and TikTok. He added that decentralized networks have reached enough maturity to compete with corporate networks.
In October, CryptoPotato reported that a16z’s flagship fund was down 40% in the first half of the year. Those losses will be exacerbated by the end of 2022, but Dixon and the company appear unfazed.
In September, Andreessen Horowitz announced a free licensing system for NFTs.
Crypto Markets Deeper in The Red
The deepening bear market has not deterred the venture capital giant. Markets have lost another percentage point on the day, with total capitalization falling to $840 billion at the time of writing.
However, they have yet to dip to the Nov. 22 cycle low of $820 billion and remain to range within this sideways channel for now.