Andreessen Horowitz (a16z) Venture Capital – Fund Investment Strategy

Andreessen Horowitz is one of the largest investment funds in the crypto market. In this article, we will learn the investment strategy of a16z fund.

What is Andreessen Horowitz?

Andreessen Horowitz is a company founded by Marc Andreessen and Ben Horowitz in 2009. Therefore, Andreessen Horowitz is also derived from the name of these two founders. This is a venture capital firm in Silicon Valley, California. a16z was founded with the goal of supporting projects and entrepreneurs to build the future through technology.

Andreessen Horowitz invests in projects from seed round to Series A, B, C, etc. With a16z they always invest in a variety of different fields such as technology companies, consumer, corporate, bio, healthcare, crypto and fintech.

Up to now, the fund has invested in more than 88 different projects. The main feature of the fund is not to invest too early in projects, the investment deals are relatively large and when investing in projects, the fund will usually be the person who “builds” with the project and is the deal leader. that investment.

We will dive into the investment strategy of a16z below.

The investment strategy of a16z.

Portfolio of a16z

Looking at the Andreessen Horowitz portfolio, you can see the following characteristics through the a16z portfolio:

Andreessen Horowitz invests not only in one segment but in nearly all segments in the market. However, the two main areas where they invest the most are Web3 and Infrastructure.

In layer 1 deals, Andreessen Horowitz is usually not an investment fund that joins from fundraising rounds too early, they often join from series A, B, or D. However, every time they join, they are always the person who leads the investment round, the investment round usually has a large amount of money and shows the responsibility, the “commit” of the fund to the project (investing more than once).

In DeFi, Andreessen Horowitz only focuses on investing in the main areas of DeFi such as AMM Dex, Lending, and Derivative. And most only invest in top-tier projects in the above fields such as Uniswap, MakerDAO, and Dydx,…

Detailed information about the portfolio of a16z has been presented in the article “What is Andreessen Horowitz?”

Capital allocation

Up to now, a16z has invested in a total of 88 projects with a total investment of about $6.1 billion. In which, WEB3.0 accounted for 35.8% with a total investment of about $2.2 billion and INFRASTRUCTURE accounted for about 30.2% with a total investment of about $1.86 billion.

Infrastructure and data projects are heavily invested by a16z and spread throughout their investment journey, and the deals are also growing, culminating in the recent Alchemy investment. This is a large segment and needs continuous improvement, so they have been spreading and investing in infrastructure all the time.

Style

They do not often invest early in projects at the seed or angel stage, but only invest in projects in Series A, B, C … and mainly. This shows that the investment taste of a16z is relatively “safe” and long-term, because investing in the following series means investing in projects that have already started operating, the model has been put into use, not It’s not just at the idea stage, so profits may not be big in the short term, but it’s safer.

You can also see that most of a16z’s deals are relatively large in size and they are usually the ones who lead the deals. This may be because they have a lot of money so they need to invest in projects. have large capital needs, and are therefore suitable to invest in later rounds, leading rounds means they are more dedicated and take on more responsibility for leading the project.

Performance

Wu Blockchain has reported and summarized the profits of the a16z investment fund (starting from July 2020) as follows:

According to this summary, we can see that the top 5 projects that bring the highest profit for a16z can be mentioned as Uniswap, Solana, Helium, dYdX and Celo.

Trend commentary

According to dove metric data, the investment trend in 2022 of a16z remains is to focus on WEB3.0 and blockchain infrastructure development. This further strengthens the absolute confidence of the a16z team in the future of Blockchain and the application of WEB3.0 in life.

Verdict

Andreessen Horowitz is one of the most famous investment funds in the world with large investments, focusing on quality projects with long-term growth potential. The Fund not only has adequate financial resources but also possesses a professional and experienced staff to make methodical investment plans, accurately assess market trends, and the ability to evaluate projects with high precision. Besides, a16z also gives projects the best support in the process of perfecting the product.

Thanks to that, a16z continuously earns huge profits and grows more and more. Some investors often follow the fund’s footprint to find investment opportunities for themselves. You can follow the investment trend of a16z, then refer to the projects that a16z has recently invested in, and conduct project research to make investment decisions in the project at an early stage with the accompanying strategy. investment funds in the early stages.

If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Ken. N

Coincu Ventures