By Q1 this year, venture capital firm Andreessen Horowitz’s (a16z) flagship crypto fund had returned almost five times for early backers, according to documents reviewed by Semafor. The firm sold a portion of its tokens right before crypto’s bear market began in May, meaning that early investors are guaranteed a successful return.
The fund was launched in 2018 with $300 million raised. As of Q1 this year, it was worth $356 million.
A16z’s investment style differs from the traditional, Semafor reports. It receives a mixture of shares and ‘token rights’ from its hand-picked crypto companies, which means it can buy various crypto assets from these firms.
This allows a16z to sell tokens at scheduled intervals, helping the VC firm return funds to limited partners, insiders told the outlet.
Still, a16z crypto funds aren’t having a great year
A16z first bet on crypto back in 2013, investing $20 million into crypto exchange Coinbase. When it went public in April of last year, the venture firm sold over half its stake, worth over $5 billion.
As of May 2022, a16z held a remaining 14 million shares, worth $953 million then — but only worth $650 million at press time. In that time period, the crypto market’s total value has plummeted by over 70%. And so far this year, Coinbase stock’s drop has resulted in a loss of 80% for a16z.
Its flagship fund reported a 40% drop by the end of Q2. Indeed, all four of a16z’s crypto funds have no doubt…
