Author: Packy McCormick (Founder of Not Boring, former a16z Crypto advisor)

Translation: Jiahua, ChainCatcher

Today (January 9), a16z announced the raising of $15 billion in new funding.

To commemorate this moment, I wrote an in-depth analysis of the company. I spoke with the firm's general partners, limited partners, and founders of portfolio companies with a total valuation of about $200 billion, reviewed some documents and presentations, and analyzed the return data of a16z's various funds since its inception.

There are many articles online discussing where a16z's methodology has gone wrong. You might be familiar with these narratives. These narratives have shadowed the company since its founding.

I think it’s much more interesting to understand what all these previously correct smart people think a16z is doing now.

To be honest, aside from a16z's formal employees, I’m probably the most ‘biased’ observer you can find.

For over two years, I have been an advisor to a16z crypto (but I am currently not compensated by the firm). Marc Andreessen (co-founder of a16z) and Chris Dixon (head of a16z Crypto) are limited partners in Not Boring Capital. I occasionally appear on the same cap table as a16z. I am friends with many people at the firm and most of the new media team. I work with these people, like them, and respect them.

However, readers should not expect me to analyze whether a16z's current fundraising pitch is worth investing in. Mature institutional partners have already made their decisions and invested $15 billion. It may take us a decade to know whether they made the right decision, and nothing I or any critic says can change that outcome, just like in the past.

What I hope to bring is a way of thinking about “what a16z really is” based on my unique experiences. I believe a16z is the best marketing company in the venture capital world. It can and does tell a story about itself. From my experience, I can tell you that its story is consistent with its actions. What a16z says to the public is the same as what it tells its internal training teams. Its current messaging is identical to the messaging in its first fundraising pitch. And you can judge its return rates for yourself.

There are many great venture capital funds and investors, some of the best of which have recently become well-known. Their methods and successes are increasingly appreciated and understood.

But a16z is doing something different, bigger, and less… low-key. It doesn’t feel like what venture capital “should” look like, partly because I think a16z doesn’t care whether it is doing “venture capital.” It just wants to build the future and devour the world.

Let’s get started.

“I live in the future, so the present is my past, and my existence is a gift.” — Kanye West (American rap king, entrepreneur)

a16z has heard your feedback.

They say it’s too loud. They say it should “shut up and just play (invest).” They say you disagree with one or two recent investments. They say quoting and retweeting the Pope’s tweets is inappropriate. They say such a massive fund size can never generate reasonable returns for LPs.

a16z has indeed listened. At this moment, it has been listening to you for nearly twenty years.

Just like in 2015, when Tad Friend (contributing writer for The New Yorker) had breakfast with Marc Andreessen while writing “The Pioneers of the Future.” Friend had just heard from a competitor eager to voice an opinion — that a16z’s fund size was too large and its ownership stakes too small, so to achieve a 5-10x total return on the first four funds, their portfolio’s total value would need to reach $240 billion to $480 billion.

“When I started checking this math with Andreessen,” Friend wrote, “he made a jerking-off motion and said, ‘Blah blah blah. We have all the economic models, we’re hunting elephants, we’re chasing big game!’”

I hope you keep that image in mind.

Today, a16z announced that all its strategies have raised $15 billion, bringing its total assets under management to over $90 billion.

This year, while VC fundraising has been dominated by a few large firms, the funds raised by a16z exceed the combined total of the next two funds, Lightspeed (which raised $9 billion) and Founders Fund (founded by Peter Thiel, which raised $5.6 billion) in 2025.

In the worst VC fundraising market in five years, a16z accounted for over 18% of all US VC fundraising in 2025. This year, the average VC fund took 16 months to complete fundraising, while a16z took just over three months from start to finish.

Breaking it down, a16z has four individual funds, each of which, if taken separately, would rank in the top 10 for fundraising in 2025: Late Stage Venture (LSV) V would rank 2nd, Fund X AI Infra and Fund X AI Apps would tie for 7th, and American Dynamism II would rank 10th.

Some might say that this amount of money is simply too much for a venture fund to expect any excess returns. To this, I imagine a16z would collectively make a jerking-off motion and say, “Blah blah blah.” They are hunting elephants, chasing big game!

Today, across all its funds, a16z is an investor in 10 of the top 15 privately held companies by valuation: OpenAI, SpaceX, xAI, Databricks (a big data AI platform giant), Stripe (a global payment giant), Revolut (a UK fintech unicorn), Waymo (Google's self-driving unit), Wiz (a cloud security unicorn), SSI (a security intelligence company), and Anduril (a defense technology company).

In the past decade, it has invested in 56 unicorn companies through its funds, more than any other firm.

Its AI portfolio encompasses 44% of the total value of all AI unicorn companies, also more than any other company.

From 2009 to 2025, a16z led 31 rounds of early financing that ultimately grew into companies with a scale of $5 billion, 50% more transactions than the next two competitors.

It has a comprehensive economic model. Now, it also has a brilliant past performance.

The following chart shows the total portfolio value of the first four funds, which is what that competitor venture capitalist said must reach $240-$480 billion to cross the threshold. In aggregate, a16z funds 1-4 have a total enterprise value of $853 billion at the time of allocation or latest post-investment valuation.

And this is just the value at allocation. Just Facebook alone has since added over $1.5 trillion in market value!

This pattern keeps repeating: a16z has made a crazy bet on the future. Some “experts” say it’s foolish. Wait a few years. It turns out it wasn’t foolish!

a16z raised its first fund (Fund I) of $300 million after the 2009 global financial crisis, boasting its operational platform supporting founders. “We visited many VC friends, and many of them said it was a very foolish idea, we absolutely shouldn’t do it, others had tried before but failed,” Ben Horowitz (co-founder of a16z) recalled. Today, almost every significant VC has some form of platform team.

In 2009, when it deployed $65 million from that fund to acquire Skype from eBay for $2.7 billion alongside Silver Lake and other investors, “everyone said it was an impossible deal because of intellectual property risks.” In a blog post less than two years after Microsoft acquired Skype for $8.5 billion, Ben recounted the skeptical voices at the time.

Marc and Ben raised $650 million for the second fund (Fund II) in September 2010 and began making large late-stage investments in companies like Facebook (investing $50 million at a $34 billion valuation), Groupon (investing $40 million at a $5 billion valuation), and Twitter (investing $48 million at a $4 billion valuation), betting that the IPO window would open. The Wall Street Journal reported in a classic article titled “Venture Capital Newbies Shock Silicon Valley” that competitors were outraged, believing that private equity transactions were not something venture capitalists should be doing. Matt Cohler (Benchmark partner, former Facebook executive) threw out this gem: “Pork and oil futures can make money too, but that’s not what we do.”

In November 2011, Groupon went public with an opening market value of $17.8 billion. In May 2012, Facebook went public with a market value of $104 billion. In November 2013, Twitter went public with a first-day closing market value of $31 billion.

When Marc and Ben raised $1 billion for the third fund (Fund III) and $540 million for the parallel opportunity fund in January 2012, the critical voices turned to a familiar topic: scale. a16z’s funds accounted for 7.5% of all VC fundraising in the US in 2012, while the VC industry was performing poorly at the time. Legendary venture capitalist Bill Draper said, “The growing consensus in Silicon Valley about venture capital is that too much money is chasing too few top-tier companies.” This certainly resonates with today’s situation.

In 2016, The Wall Street Journal published an article that David Rosenthal (host of the Acquired podcast) called “an obviously planted hit piece by competitors,” titled “a16z’s Returns Lag Behind VC Elite,” at a time when its funds had been established for seven, six, and four years, respectively. The article showed that while Fund I was in the top 5% of VC funds, Fund II was only in the top 25%, and Fund III was actually slightly outside the top 25%.

In hindsight, this is interesting because that fund, Fund III, was a monster fund: as of September 30, 2025, its net TVPI (Total Value to Paid-In) was 11.3x, and when including parallel funds, it was 9.1x net TVPI.

Fund III’s portfolio includes Coinbase (which brought a16z LP a total of $7 billion in distributions across various funds), Databricks, Pinterest, GitHub, and Lyft (though not Uber, which strongly proves that missing out is worse than making a mistake). I believe it is one of the best-performing large venture funds of all time. Since the third quarter of 2025, Databricks (currently a16z's largest holding) has raised funds at a valuation of $134 billion, meaning Fund III’s performance is even stronger now. a16z has already distributed $7 billion in net returns to LPs from Fund III and its parallel funds, and there is still nearly as much unrealized value on the books.

Most of the unrealized value is in one company, Databricks: a massive big data company that was very small when The Wall Street Journal was pessimistic about a16z in 2016, just months away from hitting the $500 million valuation mark. Today, Databricks accounts for 23% of a16z's total net asset value (NAV) across all funds.

If you spend some time at a16z, you will often hear the name Databricks. Besides being its largest holding (which is certainly one of the top three largest holdings in the entire venture capital world by dollar amount), its story is also the clearest example of how a16z operates at its best.

The Success Formula of Databricks and a16z

Before we start talking about Databricks, it’s useful to understand some characteristics of the company that we haven’t discussed yet.

First, a16z is founded and operated by engineers. Not just founders, but engineer founders. This influences how they design companies (winning through scale and network effects) and how they pick markets and the companies within them.

Second, at a16z, perhaps nothing is a greater investment sin than investing in “the second place.” If you miss a winner early on, you can always invest in later rounds. But if you invest in second place, you’ve locked yourself out of the winner’s door. This is true even if the eventual winner has not yet emerged.

Third, once a16z is convinced it has found the winner in a category, the classic a16z approach is to give it more money than it thinks it needs. Everyone laughs at them for this.

These three things have been true since the company was founded.

Back in the early 2010s, just a few years after a16z was established, big data was the hot thing (you should remember this), and the dominant big data framework of that era was Hadoop. Hadoop uses a programming model called MapReduce (originally developed by Google) to distribute computation across cheap commercial server clusters rather than expensive dedicated hardware. It “democratized big data,” leading to a surge of companies emerging to facilitate and capitalize on this democratization. Cloudera was founded in 2008 and raised $900 million in 2014, with investments in Hadoop companies quintupled that year to $1.28 billion. Hortonworks, spun off from Yahoo, went public that same year.

Big data, big bucks. But a16z didn’t make any money from it.

Ben Horowitz, the “z” in a16z, didn’t like Hadoop. Before becoming CEO of LoudCloud/OpsWare, Ben was a computer science student, and he didn’t believe Hadoop would become the winning architecture. Its programming and management were very difficult, and Ben thought it was not suited for the future: every step of MapReduce computation writes intermediate results to disk, making it extremely slow for iterative workloads like machine learning.

So Ben avoided the Hadoop craze. Jen Kha told me that Marc was at the time:

“Just about to kill him because at that moment, Hadoop was dominating all the headlines, and he said, ‘We’re going to miss this. We completely messed up. We dropped the ball.’”

And Ben said, “I don’t think this is the next architectural shift.”

Then eventually, when Databricks came along, Ben said, “This might be it.” And then he, of course, bet the whole farm on it.

Databricks appeared at just the right time, right down the road from the University of California, Berkeley.

Ali Ghodsi and his family fled Iran during the 1984 Iranian Revolution and moved to Sweden. His parents bought him a Commodore 64 computer, and he taught himself programming, actually learning so well that he was invited as a visiting scholar to UC Berkeley.

At Berkeley, Ali joined AMPLab, where he was one of eight researchers (including thesis advisor Scott Shenker and Ion Stoica) working to realize the ideas in PhD student Matei Zaharia’s thesis and build Spark, an open-source software engine for big data processing.

The idea was to “replicate what large tech companies do with neural networks, but without the complex interfaces.” Spark set a world record for data sorting speed, and the paper won the award for Best Computer Science Paper of the Year. In keeping with academic tradition, they released the code for free, but almost no one used it.

So starting in 2012, the eight of them gathered for a series of dinners, during which they decided to team up to start a company on top of Spark. They called it Databricks. Seven of the eight joined as co-founders, and Shenker signed on as an advisor.

Databricks co-founder - Ali Ghodsi sitting in the front row center

The team believed Databricks needed a little money. Not a lot, just a little. As Ben told Lenny Rachitsky:

“When I met them, they said, ‘We need to raise $200,000.’ I knew at that time they had this thing called Spark, and the competitor was this thing called Hadoop, and there were well-funded companies racing toward it, while Spark was open-source, so time was of the essence.”

He also realized that as academics, the team tended to do things on a small scale. “Generally speaking, professors… if you start a company and make $50 million, that’s a pretty big win. Like, you’re a hero on campus,” he told Lenny.

Ben brought the team some bad news: “I’m not going to write you a $200,000 check.”

But he also brought them some very good news: “I’m going to write you a $10 million check.”

His reasoning was, “You need to build a company. If you’re going to do this, you need to go all in. Otherwise, you should stay in school.”

They decided to drop out. Ben increased the check amount, and a16z led Databricks’ Series A funding round at a post-money valuation of $44 million. It owned 24.9% of the company.

This initial encounter—Databricks asking for $200,000, a16z giving more and bigger—set a pattern. When a16z invests in you, they believe in you.

When I asked Ali about a16z’s impact, he was unequivocal: “I think if it weren’t for a16z, Databricks wouldn’t exist today. Especially Ben. I don’t think we would exist. They genuinely believed in us.”

Faith is a cool thing. When you have the power to make it self-fulfilling, it becomes even more valuable.

Just like in 2016, when Ali was trying to strike a deal with Microsoft. From his perspective, it was obvious due to the huge demand for Databricks on Azure. He asked some of his VCs to introduce him to Microsoft CEO Satya Nadella, and they did, but those introductions “got buried in the administrative assistant loop.”

Then Ben formally introduced Ali to Satya. “I got an email from Satya saying, ‘We are absolutely interested in building a very deep partnership,’” Ali recalled, “and he cc’d his deputy and the deputy’s deputy. Within hours, I had 20 emails from Microsoft employees in my inbox, people I had previously tried to talk to, all saying, ‘Hey, when can we meet?’ It was like, ‘Okay, this is different. This is going to happen.’”

Or in 2017, when Ali was trying to hire a senior sales executive to maintain growth momentum. This executive wanted to include change of control provisions in his contract—basically, if the company was acquired, the options would vest faster.

It was a stalemate, so Ali asked Ben to help convince the person that Databricks was worth “at least $10 billion.” After Ben spoke with him, he sent Ali this email:

Email from Ben Horowitz to Ali Ghodsi, September 19, 2018

“You are seriously underestimating this opportunity.”

We are the cloud's Oracle. Salesforce's value is ten times that of Siebel. Workday's value will be ten times that of PeopleSoft. Our value will be ten times that of Oracle. That's $2 trillion, not $10 billion.

Why does he need change of control provisions? We either don’t change control.

This is one of the most hardcore company emails ever, especially considering that at the time, Databricks was valued at only $1 billion, with annual revenue of just $100 million, while its current valuation is $134 billion, with annual revenue exceeding $4.8 billion.

“They envisioned the full potential of things,” Ali told me. “When you’re mired in operations like we are every day, seeing all the challenges—deals not closing, competitors beating you, money running out, no one knowing who you are, people leaving you—it’s hard to think about the world that way. But then they come to the board meeting and tell you, ‘You’re going to take over the world.’”

They were right, and their faith was rewarded. In total, a16z invested in all twelve rounds of Databricks’ funding. It led four of those rounds. This is one of the reasons why the AH III fund (the fund that made the initial investment) performed so well and is a driving force behind the returns of its larger later-stage funds I, II, and IV.

“First and foremost, they really care about the company’s mission. I don’t think Ben and Marc see this primarily as an investment return. That’s secondary,” Ali observed. “They are tech believers who want to change the world with technology.”

If you don’t understand Ali’s comments about Marc and Ben, you won’t understand a16z.

What is a16z?

a16z is not a traditional venture capital fund. On the surface, this is obvious! It just completed the largest VC fundraising across all strategies since SoftBank’s $98 billion Vision Fund in 2017 and Vision Fund II in 2019. This is not traditional at all. But even SoftBank’s Vision Fund is a fund. a16z is not that.

Of course, a16z raises funds and needs to generate returns. It must excel in this regard, and so far, it has been outstanding. Not Boring has a16z’s fund return data to date, which we will share below.

But first—what is a16z?

a16z is a tech fanatic. Everything it does is aimed at bringing better technology to make the future better. It believes that “technology is the glory of human ambition and achievement, the vanguard of progress, and the realization of our potential.” Everything stems from this. It believes in the future and bets the entire company on it.

a16z is a company. It is a business, an enterprise. Its founding goal is to scale and improve as it scales. I believe many characteristics of a company do not apply to traditional funds, and we will cover these characteristics. I think this distinction addresses one of the strangest things in the self-image of venture capital: that venture capital is an industry that sells the world’s most scalable product (money) to the most scalable companies (tech startups), yet it cannot scale itself.

This distinction—company > fund—comes from a16z GP David Haber, who is the most East Coast finance-spirited person in this group and describes himself as a student of investment firms as businesses. “The objective function of a fund is to generate the most ancillary equity with the fewest people in the shortest time possible,” he explained. “A company is about providing excellent returns and building sources of competitive advantage that compound. How do we get stronger as we scale, rather than weaker?”

a16z is operated by engineers and entrepreneurs. Stereotypical fund managers try to grab a larger share of a fixed pie. Engineers and entrepreneurs try to grow the pie by building and scaling better systems.

a16z is a temporal sovereign. It is an institution designed for the future. The company sees itself as a peer to the world’s leading financial institutions and governments at its most ambitious moments. It has stated its goal is to become the (initial) JPMorgan of the information age, but I think this underestimates its true ambition. If governments represent spatial blocks, then a16z represents that massive temporal block known as the future. Venture capital is merely the way it has found to have the greatest impact on the future and the business model that aligns best with its profit goals.

a16z manufactures and sells power. It builds its power through scale, culture, networks, organizational infrastructure, and success, and then primarily empowers the tech startups in its portfolio through sales, marketing, recruiting, and government relations. Although its founders say that a16z will do whatever it can, this seems to encompass a lot.

If you were to design such an institution, one that believes technology is “devouring markets far larger than those the tech industry has historically pursued,” and that everything is technology, you would build a company that sells winning power to hundreds of companies that may one day become economic entities. I think you would create an institution that looks a lot like a16z.

Because those companies that may one day become economic entities start out small and fragile. They begin scattered, each with their own goals and competitors; often, they compete against each other. And they face entities that dominate the present, which do not want to give way to newcomers. A small company, no matter how promising, may not be able to hire the best recruiters who can attract the best engineers and executives. It may not be able to advocate for policies that give it a fair chance. It may not have an audience to convey its message to the world in a way that people are willing to listen. It may lack the legitimacy to sell its products to governments and large enterprises overwhelmed by pitches promising the next big event.

For any small company, it makes no sense to invest billions of dollars to build these capabilities and amortize them solely over itself. But if you can amortize these capabilities across all these companies, across trillions of dollars in future market value, then suddenly, small companies can have the resources of large companies. They can determine the outcome based on the quality of their products. They can bring about the future they deserve.

What if you could combine the agility and innovation of startups with the power and weight of a temporal sovereign?

That’s what a16z is trying to do, and it’s what it has been trying to do since it was a startup itself.

Why Marc and Ben Founded a16z

In June 2007, Marc wrote a blog post titled “The Only Thing That Matters” as part of the Pmarca Startup Guide. On the surface, it was advice for startup tech companies, but in hindsight, it reads like a manual for founding a16z. It answers which of the three core elements of a startup—team, product, or market—is the most important.

Entrepreneurs and VCs would say team. Engineers would say product.

“Personally, I take the third position,” Marc wrote, “I assert that the market is the most important factor in a startup’s success or failure.”

Why? He wrote:

In a great market—one with a lot of real potential customers—the market pulls the product out of the startup…

Conversely, in a bad market, you can have the best product in the world and an absolutely killer team, but it doesn’t matter—you will fail…

To pay tribute to Andy Rachleff, a former employee of Benchmark Capital, who crystallized this formula for me, I propose Rachleff’s Law of Startup Success:

The number one killer of companies is lack of market.

Andy put it this way:

When a great team meets a bad market, the market wins.

When a bad team meets a great market, the market wins.

When a great team meets a great market, extraordinary things happen.

I think what Marc and Ben saw in venture capital was a great market (that no one realized how great it was), filled with bad teams (that no one realized how bad they were).

Between 2007 and 2009, Ben and Marc were figuring out what to do next. They were very successful tech entrepreneurs, and despite their success, they were dissatisfied, and because of their success, they had what could be called “fuck you money.”

But what to do?

As entrepreneurs and then as angel investors, Marc and Ben dealt with many bad venture capitalists, and they thought it might be interesting to compete with those people.

“For Marc, it wasn’t about the money, at least from my perspective,” David Haber told me. “He had been wealthy since he was 20. At the beginning, it might have been more about punching Benchmark or Sequoia in the face.”

Venture capital had another advantage, something that very few people realized in the depths of the recession triggered by the global financial crisis: it might be the greatest market on Earth. This was extremely important to Marc.

Of course, not all venture capital is bad. The two firms Marc wanted to punch in the face—Sequoia and Benchmark—are very good (Marc quoted Andy Rachleff!). Except they tend to push founders out. For founders who want to maintain control, Peter Thiel launched Founders Fund in 2005 and was deploying FF II in 2007, which, as Mario wrote, later returned $18.60 in real cash (DPI) for every dollar invested.

But overall, compared to today, it was a lazy, insular, artisanal industry.

Marc likes to tell a story about how in 2009, when he and Ben were considering launching a16z, he met with a GP from a top firm who compared investing in startups to grabbing sushi off a conveyor belt. According to Marc, this GP told him:

The venture capital business is like going to a revolving sushi restaurant. You just sit on the dune road, and startups come in; if you miss one, it’s okay because another sushi boat follows right behind. You just sit there and watch the sushi go by, occasionally reaching out to grab a piece of sushi.

If the goal is to maintain the existing good times, “as long as the industry’s ambition is limited,” that’s fine, Marc explained to Jack Altman on Uncapped.

But Marc and Ben’s ambitions are not limited. In their company, there is no greater sin than “missing one,” not investing in a great company. This is very important. Because they saw that as the market grows, large tech companies will become larger and larger.

"Ten years ago, there were only about 50 million consumers on the internet, and relatively few people had broadband connections," Ben and Marc wrote in the fundraising prospectus for Andreessen Horowitz Fund I in April 2009. "Today, there are about 1.5 billion people online, many of whom have broadband connections. Therefore, the biggest winners on both the consumer and infrastructure sides of the industry have the potential to be much larger than the most successful tech companies of the previous generation."

At the same time, the cost and difficulty of starting a company have significantly decreased, which means there will be more companies.

"In the past decade, the cost of creating a new tech product and getting it to market at least in a testing phase has dramatically decreased," they wrote in a letter to potential LPs, "now typically only $500,000 to $1.5 million, compared to $5 million to $15 million over a decade ago."

Finally, the ambition of the companies themselves has also grown as they shift from being tool companies to directly competing with existing businesses, meaning every industry will become a tech industry, and every industry will thus grow larger.

This is why the market was so great at that time. He continued:

From the 1960s to, say, 2010, there was a venture capital script… Companies were basically tool companies, right? Pick and shovel companies. Mainframes, desktops, smartphones, laptops, internet access software, SaaS, databases, routers, switches, disk drives, word processors—tools.

Around 2010, the industry underwent a permanent change… The big winners in tech were increasingly companies that directly entered existing industries.

Did a16z overpay for companies in the early days? Or did it pay a good price relative to the future value it realized?

In hindsight, it’s easy to claim the latter. What’s impressive about a16z is that they said the same thing beforehand.

As they wrote, if about 15 tech companies each year ultimately reach $100 million in annual revenue, creating about 97% of the public market value of all companies formed that year—that’s the power law everyone is familiar with now—then they better invest as much as possible in those 15 potential companies at all costs, and then be in a position to double and triple down on the winners.

To do this, a16z had to think differently from anyone else about how to build a company, relying on more than just two investment partners.

Therefore, after sharing the basic terms of the AH I investment—$250 million target fund size, with general partners committing $15 million—Ben and Marc summarized their company strategy in one paragraph.

AH Fund I Fundraising Prospectus

This is the strategy they are still executing today, even as the company has grown far beyond the scale of just two partners and the top five ambitions.

The Three Eras of a16z

Since the first fund, throughout the company’s history, a16z’s super-sized belief in the future, its asymmetric belief, has been its core competitive advantage in my view. This is the differentiating point from which all other advantages derive.

As the company’s ambition, resources, fund size, and power have grown, how it applies this advantage and chooses to differentiate has also evolved over time.

First Era (2009-~2017)

In a16z’s first era (2009-~2017), the core insight was: if software is eating the world, then the best software companies will become much more valuable than anyone is pricing them at currently.

This belief enabled a16z to do three things to transition from newcomers to top five companies:

Pay high prices for deals. As mentioned, the deals a16z made in early funds were considered too expensive or unconventional by many at the time. On the Acquired podcast, Ben Gilbert said, "The usual criticism is that they overpaid to buy themselves fame, thus buying into winners," but he believes this was rational at the time and pointed out, "Would anyone argue today that anything they did from 2009 to 2015 was actually overvalued? Absolutely not." As Ben Horowitz explained in a 2014 HBS case study, "Even with valuations in the billions, investors may underestimate a company’s potential." That underestimation was a16z’s advantage.

Build operational infrastructure that others called wasteful. Hiring a full-service team, recruiting partners, executive briefing centers… all of this seemed like a drag on fund managers' expenses at the time. But if you believe portfolio companies can become category-defining companies and need corporate power to get there, then this spending is justified. They were building for a future where a startup needs to look like a real company to win Fortune 500 deals.

View technical founders as scarce resources. This was also a bet, as companies became cheaper and easier to establish, technical geniuses without traditional management skills could and would build more significant companies. Therefore, it did everything possible to attract and support them, introducing the CAA (Creative Artists Agency) model into venture capital. "Founder-friendly" is now a meme, but at the time, it was indeed novel.

Importantly, in this first era, the most crucial thing was simply to invest in the right companies and profit as they became as successful as a16z believed they would. Of course, they focused on helping founders, but primarily, they were capitalizing on available arbitrage opportunities.

Having Coinbase and Databricks, AH III is a standout example, but its consistency is also noteworthy.

"As LPs, we are pleased with the ongoing net 3x TVPI funds, occasionally with a net 5x+ TVPI fund, which is what they delivered," VenCap’s CIO David Clark told me, who has been an LP investing in a16z since AH 3, "a16z is one of the few firms capable of delivering this kind of performance consistently over time." You can see this in the performance numbers above.

If this was an era where a16z was willing to pay high prices and "invest in pig stomachs" to earn a reputation for itself and gain returns in the future, then these deals seemed to cost very little in the short term.

Second Era (2018-2024)

In a16z’s second era (2018-2024), the key belief is that winners indeed become much larger than anyone expects, they stay private longer, and technology is eating more industries than others realize.

I believe this belief enables a16z to do three things to transition from top five companies to leaders:

Raise larger funds.

In the first era, a16z raised $6.2 billion through nine funds. In the second era, within five years, a16z raised $32.9 billion through 19 funds. The standard VC wisdom is that returns decrease as fund sizes increase. a16z proposed the opposite: if the biggest outcomes become larger and larger, you need more capital to maintain meaningful ownership through multiple rounds of financing. The worst thing you can do is miss a winner and not have enough of the winners you already own. Marc likes to say you can lose money at most 1x, but your upside is actually unlimited.

Build a structure that goes beyond a single fund.

In the first era, a16z raised core funds and subsequent late-stage funds. All a16z GPs invested from the same fund, even though each had their own areas of focus. It also raised a bio fund because biotech is a completely different beast. For the purposes of this article, I focus on those a16z venture funds that do not focus on biotech and health. In the second era, a16z began to decentralize. In 2018, it launched CNK I, the first dedicated crypto fund led by Chris Dixon. In 2019, it recruited David George to lead a dedicated late-stage venture (LSV) fund and raised the largest fund to date: LSV I at about $2.26 billion, roughly double any previous a16z fund. During this period, it raised new funds across core, crypto, biotech, and LSV, as well as dedicated seed funds (the $478 million AH Seed I in 2021), dedicated gaming funds ($612 million Games I), and its first cross-strategy fund ($1.4 billion 2022 Fund), which allowed LPs to invest proportionally across all funds for that year. Importantly, while individual funds could leverage the company’s centralized resources, such as investor relations, each fund designed its own dedicated platform team—marketing, operations, finance, events, policy, etc.—to meet the specific needs of founders in its vertical.

Hold positions longer.

In a16z’s second era, leading companies began to stay private longer and raise more capital in private markets, whether in the primary market (funding companies) or the secondary market (providing liquidity for employees and early investors). Matt Cohler compared a16z buying late-stage secondary stock in Facebook to the practice of buying pig stomachs, as companies like Stripe, SpaceX, WeWork, and Uber were able to obtain liquidity in private markets that was previously only available in public markets. This posed challenges for the industry—LPs could not easily obtain liquidity, hindering the capital allocation cycle—but for companies that believed tech companies would become larger and larger, it was a godsend. It provided the opportunity to put more capital into high-quality companies that happened to be private and pulled returns that should belong to public market investors into private markets. I believe this shift is one of the key reasons why VC firms like a16z can grow larger without crushing returns.

In response, a16z did several things. It became a registered investment advisor (RIA), allowing it to freely invest in cryptocurrencies, public stocks, and secondary markets, and launched the aforementioned LSV 1 led by David George. In the second era, LSV raised $14.3 billion of the total $32.9 billion raised by a16z across all funds. The crypto fund also split into seed ($1.5 billion) and late-stage ($3 billion) in Fund IV.

These are the top 10 deals in each listed LSV fund, based on the post-money valuation from the most recent round or current market value:

LSV I: Coinbase, Roblox, Robinhood, Anduril, Databricks, Navan, Plaid, Stripe, Waymo, and Samsara

LSV II: Databricks, Flock Safety, Robinhood (they exited in the public market and reinvested more in Databricks), Stripe, Deel, Figma, WhatNot, Anduril, Devoted Health, and SpaceX

LSV III: SpaceX, Anduril, Flock Safety, Navan, OpenAI, Stripe, xAI, Safe Superintelligence, Wiz, and DoorDash

LSV IV: SpaceX, Databricks, OpenAI, Stripe, Revolut, Cursor, Anduril, Waymo, Thinking Machine Labs, and Wiz

As a16z has been criticized in the past, if you were to buy a logo, you would certainly end up with something worse than these. That said, according to data from Cambridge Associates as of Q2 2025, LSV I is in the top 5% of its vintage, while LSV II and LSV III are both in the top quartile (top 25%).

As of September 30, 2025, LSV I has a net TVPI of 3.3x, LSV II has a net TVPI of 1.2x (though it may be higher after recent financing for Databricks and SpaceX), and LSV III has a net TVPI of 1.4x (this number may also increase after SpaceX completed a major secondary sale at a reported $800 billion valuation, rising >2x).

By believing that the outcomes of these star companies would be much larger than most people (certainly not all; see: Founders Fund and SpaceX, Thrive and Stripe) believed, a16z was able to invest more capital in the best private tech companies.

Crucially, they have begun to indicate that it is possible to achieve venture-like returns in growth-stage funds under the right conditions. Specifically, according to an analysis I saw from an a16z LP, companies with strong early businesses can provide venture-like multiples (and higher internal rates of return, IRR) by continuing to invest in growth stages. Of course, deeper relationships with these companies can also increase the firm's power.

In the second era, a16z believes the most important thing is to own as many winners as possible, and if you understand these companies better from early investments and have dedicated late-stage funds to continue doubling down or correcting early mistakes, it becomes easier to do so. (Although still not majority equity investments as you see in other asset classes.)

This is also a form of arbitrage, although I believe a16z has done more work in this era to help its individual companies succeed.

Returns in the second era are still early, but they are ahead of the performance of first-era funds at a similar stage in their lifecycle, when the Wall Street Journal reported their underperformance.

The net TVPI for the 2018 fund is 7.3x, for the 2019 fund is 3.4x, for the 2020 fund is 2.4x, for the 2021 fund is 1.4x, and for the 2022 fund is 1.5x.

Notably in this era is the outstanding performance of the crypto funds (CNK 1-4 and CNK Seed 1). CNK I has already returned 5.4x net DPI to LPs.

Perhaps more surprising to those who think a16z crypto raised too much money at the wrong time in 2022 is that the $3 billion raised for CNK IV has so far reflected (or "mark-to-market") a net TVPI of 1.8x.

The two biggest stories of this second era, LSV and crypto, illustrate two aspects of a16z's belief in the future. LSV is a response to the fact that companies are staying private longer and have greater capital needs in the private market. Crypto represents the idea that innovation (and returns) can come from entirely new areas that are completely different from the domains you are used to investing in.

They also illustrate a16z's need to expand what it does on behalf of its portfolio companies and the industry. To help its late-stage companies thrive, it must rebuild some of the benefits of being public in the private market.

To ensure the survival of crypto in the U.S. and to ensure that all types of new tech companies can have a fair chance in the face of entrenched interests, it needs to go to Washington.

This brings us to a16z's third era (2024-future), in which the key belief is that new tech companies, if allowed, will not only reshape but will win in every industry, and a16z must lead the industry and the nation in the right direction.

This belief again changes the nature of a16z. At a certain scale, the $15 billion of new capital is a good dividing line; picking winners is not enough.

You must create winners by shaping the environment in which they compete.

As Ben said, "It's time to lead."

The Leadership Era of a16z

You might imagine that at this stage of the game, an analyst from a competing VC firm would text reporter Tad Friend something like, "To achieve a total return of 5-10x on your $15 billion new fund, 'you need to make the entire U.S. tech industry several times larger than it is today.'"

To this, you can imagine Marc and Ben would say: yes.

This is the company's explicit plan. The logic is as follows.

Since 2015, it has funded more unicorns at the early stage than any other investor, with the gap between a16z and the second place (Sequoia) being as large as the gap between second and twelfth place.

Source: Ilya Strebulaev, Stanford Professor

"The number of companies funded at the early stage that become unicorns" is certainly a very specific and convenient way to judge "the best." More commonly, returns are cited, whether by multiples or IRR or simply the total cash distributed to LPs. Others might point to hit rates or consistency. There are many ways to slice the leaderboard.

But this way seems to align with how a16z views the world. As I repeatedly heard during a16z crypto, because many smart entrepreneurs are building there and betting on a category and getting it wrong, that’s perfectly fine. But picking the wrong company within a category, missing the ultimate winner for any reason, is not acceptable. As Ben said:

We know that starting a company is a high-risk endeavor, so if we run the right process and assess the risks correctly at the time of investment, we are not worried about those investments that did not succeed. On the other hand, we are very concerned about whether we misassessed whether the entrepreneur is the best in her category.

If we pick the wrong emerging category, that’s fine. If we pick the wrong entrepreneur, that’s a big problem. If we miss the right entrepreneur, that’s also a big problem. Missing a transformative company due to conflict or giving up is far worse than investing in the best entrepreneur in a category we misjudged.

Based on its own estimation of what matters most, a16z has become a leader in the venture capital industry.

"What about now?" Ben asks. "What does it mean to lead an industry?"

In the X article announcing this $15 billion financing, he answered, "As the leader of U.S. venture capital, part of the fate of new technology in America rests on our shoulders. Our mission is to ensure that America wins the technology of the next 100 years."

This is an unusual thing for a venture capital firm to say.

It is also, if you accept these premises—that technology is the engine of progress, that America’s continued leadership depends on technological superiority, and that a16z is the largest and most influential supporter of new tech companies in America, with the power and resources to empower them to compete fairly with existing businesses—it is not entirely unreasonable.

To win the technology of the next 100 years (which at a16z is the same as winning the next 100 years), he continued, it must win in key new architectures—AI and crypto—and then apply those technologies to the most important areas such as biotech, defense, health, public safety, and education, injecting them into the government itself.

These technologies will make the market larger. As I argued in "Tech is Going to Get Much Bigger" and "Everything is Technology," this means that industries and work that were previously not in the tech addressable market are now included, which means that venture capital addressable value (VCAV) will also increase dramatically.

U.S. VC exits are getting larger, chart from VenCap's David Clark

This is a continuation of the bets a16z has been making, but with an important pivot in belief: if a16z does its job well as a leader, this value will be unlocked, and the future of America (and the world) will be secured.

Specifically, this means five things:

1. Make American tech policy great again
2. Step into the gap between private and public company building
3. Bring marketing into the future
4. Embrace new ways of building companies
5. Maintain a culture of building while expanding our capabilities

Almost everything that makes you scratch your head about a16z serves these five purposes.

Most notably, a16z has become more actively involved in politics over the past two years, with Marc and Ben publicly supporting President Trump in the last election. This has angered many, with some arguing that venture capital funds should not influence national politics.

a16z would strongly oppose this argument. It wants to make American tech policy great again.

Marc and Ben outline their argument in The Little Tech Agenda, which can be summarized as follows:

New tech companies are crucial to the success of our nation.

To win the future, we need to support innovative laws, policies, and regulations, and we must prevent regulatory capture by large, resource-rich existing companies.

The opposite has been happening: "We believe that bad government policy is now the number one threat to little tech companies."

In the halls of government or in opposition to existing businesses, no one is fighting for new tech companies: large existing companies won’t do it, and startups shouldn’t spend their limited resources doing so.

Venture capital firms benefit economically from the success of new tech companies, so VCs should be the ones fighting this battle, and as a leader among VCs, a16z has a responsibility to do so.

a16z is a single-issue voter. Little tech companies are the only thing it cares about. It is bipartisan.

These are the talking points—“We do not engage in political struggles outside of issues directly related to little tech companies.” and “Regardless of party affiliation, regardless of their positions on other issues, we support or oppose politicians.” —from everything I have seen at a16z, these are absolute truths.

The company engages in politics not for fun (though at least Marc seems to genuinely enjoy the scene; he seems to find humor in absurdity, which is an underrated competitive advantage, but we don’t have time to discuss that today). a16z is willing to look foolish in the short term and endure attacks to help new technologies thrive in the long term.

For a long time, as former Benchmark partner Bill Gurley argued in 2,581 Miles, tech could essentially ignore Washington, and Washington could essentially ignore tech. A few years ago, that changed, partly because tech shifted from making tools to fighting against the existing companies I discussed earlier. Crypto was the first sector where this became a matter of life and death.

When a16z first went to Washington, little tech companies were not yet a voting bloc in Washington, D.C. Large tech companies had their own lobbyists and connections. Existing businesses—banks, defense companies, whoever—had their own lobbyists and connections. But little tech companies, including crypto, did not. No company, except perhaps Coinbase at the time, could afford the costs or groundwork needed to represent themselves in the nation’s capital, let alone in state capitals across the country.

So in October 2022, a16z crypto hired Collin McCune as its head of government affairs, and Collin began educating American politicians about crypto. Collin, Chris Dixon, a16z crypto’s general counsel Miles Jennings, other members of the team, and crypto founders from the portfolio and the broader industry made multiple trips to Washington, D.C. to explain how crypto works, what it could become, and more generally, the dangers of stifling new technologies through regulation.

This worked. Largely thanks to their efforts and the bipartisan Fairshake SuperPAC’s efforts, crypto is no longer facing existential legislative risks. Last year, President Trump signed the GENIUS Act into law, which is the first regulation of crypto stablecoins, and comprehensive market structure legislation passed the House with overwhelming bipartisan support. It is now under consideration in the Senate, hoping to pass and be signed into law later this year.

When AI became a hot topic in Washington, this experience proved valuable. McCune now leads the entire company’s government affairs practice, with a permanent presence in Washington, D.C., covering AI, crypto, American vitality, and more. It is currently advocating for comprehensive federal AI standards to avoid the chaos of competing state regulations, as well as other policies that support innovation.

While lobbying may be a dirty word, the current reality is that little tech companies’ competitors have sophisticated government affairs and policy teams dedicated to capturing regulators, making it difficult for newcomers to compete in a fair environment.

To ensure tech wins the future and a16z achieves returns for its funds, staying out of politics is no longer an option. The good news is that as a company that needs new companies to form, grow, and win to sustain its existence, a16z is incentivized as much as possible to keep the competitive environment open to innovation.

Because from the current moment, even a16z admits it does not know what companies will be built in the future or how they will be built.

Embracing new ways of building companies means being open to the idea that with AI, entrepreneurs may be able to build companies with a fraction of the employees previously required, and the conditions for building a great company may be radically different from the past. This means a16z also needs to adapt.

For example, it launched Speedrun, its own accelerator, through which it invests up to $1 million and runs a 12-week program for nascent companies. This allows a16z to gain early insights into how these new companies are being built and the specifics of each company, so it can invest more wisely in the winners.

But this also carries risks: increasing the number of companies that can claim to be supported by a16z and lowering the bar carries the risk of diluting legitimacy. For instance, a16z faced backlash on Twitter for supporting Doublespeed through Speedrun, a company that claims to be "synthetic creator infrastructure," but others have labeled it a "phone farm" and "spam-as-a-service."

Futurism

This framework—“getting funded by Marc Andreessen”—is interesting because Marc does not make decisions on Speedrun applications below $1 million—each Speedrun check represents only about 0.001% of a16z’s assets under management. But this illustrates the challenge perfectly. Before speculating that they are a Speedrun company and verifying it, I have seen mentions of this a16z-backed company on Twitter multiple times. Most people wouldn’t do that.

A more notorious example in a similar context is Cluely, a startup that promises to help its clients cheat on everything, in which a16z led a $15 million round from its AI application fund.

There are reasons to question why a16z, a company actively committed to shaping America’s future, is also investing in a startup that values virality over ethics. Does the presence of a company like Cluely in the portfolio slightly tarnish the legitimacy of all the other companies, at least in the eyes of the very online?

It’s quite possible. Personally, I don’t like it. It feels wrong. It’s unseemly.

But! It is internally consistent.

Because aside from the actual product, Cluely is pitching a brand new way of building companies in the AI era: assuming that underlying model capabilities are converging and commodifying, distribution will be the only thing that matters, and if a little controversy is needed to gain distribution, so be it.

If you are embracing new ways of building companies, $15 million and a little Twitter controversy is a cheap price to pay for a front-row seat to one of the cutting-edge approaches.

More generally, in the industry a16z operates in, occasionally looking foolish is the price you pay to avoid going the way of Kodak. You need to be willing to take risks, and taking risks means more than just capital. At a16z’s scale, a little capital is the least risky thing.

However, there is a viewpoint that from a macro perspective, the little incident on X (which is also an a16z portfolio company) is completely irrelevant. Katherine Boyle, a16z general partner who co-founded the company’s American vitality practice, actually made this argument when I asked about it:

You could say, yes, maybe we took a little hit on Twitter because of a company that people don’t like, whether it’s in some corner of San Francisco or in New York or wherever. Like, “We don’t like what they’re doing with American vitality! We don’t like what they’re doing with crypto!”

But the actual scale of that machine means that momentary little incidents are completely irrelevant.

The top institutional comparison is a scaled system. Just like the United States. When the United States does something awkward on the global stage, do we care? No, it doesn’t affect the United States, just as it doesn’t affect the Roman Catholic Church.

We are thinking in centuries, not tweets.

You may disagree with everything a16z does, but you have to respect the audacity of that company.

In any case, when I ask some a16z LPs what they think about certain controversial companies on Twitter, the response I always get is a bewildered “Who?”

The only thing that seems to truly matter to a16z’s returns is winners: identifying them early, winning their deals, and owning as much of them as possible over time. Ask any a16z LP about Databricks; they know Databricks.

Now, in the third era, the era of “it’s time to lead,” what is equally important is helping them grow, even as they get larger.

This is what I think Ben means by stepping into the gap between private and public company building, which I believe is the most critical reconstruction for rethinking a16z today and how it might achieve 5-10x returns on $15 billion.

“In the early days,” Ben said, “venture capitalists helped companies reach $100 million in revenue and then handed them off to investment banks for the next leg of their journey as public companies.” That world no longer exists. Companies are staying private longer and scaling larger, which means the venture capital industry led by a16z needs to expand its capabilities to meet the needs of larger companies.

To that end, the company recently brought in former VMware CEO Raghu Raghuram to take on a triple-threat role—serving as GP of the AI infrastructure team alongside Martin Casado, GP of the growth team alongside David George, and as an executive partner and Ben’s “strategist, helping him run the company.” Alongside Jen Kha, Raghu is leading a series of new initiatives to “address the needs of large companies as they grow.”

This means collaborating with national governments around the world to help portfolio companies scale and sell to their regions, establishing strategic relationships with companies like Eli Lilly (with which it co-launched a $500 million biotechnology ecosystem fund), and increasing the number and depth of global LP relationships. It means expanding the scope of a16z's Executive Briefing Center, where large companies can meet directly with a curated group of relevant a16z portfolio companies.

Even for larger companies, building each one from scratch is not cost-effective, but for a16z, building and allocating across the entire portfolio may make sense. Coincidentally, these matters exist at the level of government, trillion-dollar companies, and trillions of dollars in capital.

All of this could mean that companies can remain private longer without sacrificing the legitimacy, relationships, or capital acquisition channels that come with being a public company.

This means companies can grow larger in the private market, where they are fully within a16z's addressable market.

This means a16z has the opportunity to invest more capital with a reasonable chance of generating strong returns, which means the potential to allocate more resources to build more capabilities and greater power, which it can lend to portfolio companies and increasingly to the entire new tech industry to help bring more and better new technologies into more parts of the economy, so that we all can have a better future.

Of course, many things could go wrong. The more money there is, the more problems there are. Leaders face attacks. And so on.

In my view, I think a16z is playing this game at a scale and scope that no one has played before, accompanied by all the opportunities and risks.

For example, a larger surface area means more potential vulnerabilities. And theoretically, the longer a company remains private, the more difficult it becomes to generate liquidity for LPs, and the harder it is for LPs to invest in new funds that allow a16z to invest in new companies that may one day become very large.

However, at the end of the day, there are really only two voter groups that matter: founders and LPs, the company's customers and its investors.

The Only Important Groups: LPs and Founders

How founders and LPs view the company, manifested in who they take money from and who they give money to, is a compressed version of everything else I have discussed.

Here’s my logic:

If the best founders believe that all the machinery a16z has built will help them build larger companies than any other way, they will take its money instead of other funds (or at least ensure it is one of the companies they take money from).

If LPs believe a16z continues to invest in the best founders, they will give it money instead of other funds and keep that money with them, even in the face of liquidity constraints.

When I spoke with Jen Kha, she shared an anecdote that clearly illustrates that in this game, aside from being in the right market initially, being in the best companies is really the only important thing.

A few years ago, during that brief venture capital bear market, amid liquidity concerns and uncertainty about the Trump administration's early stance on the tax status of endowment funds, a16z offered them liquidity. Reading the headlines at the time, including rumors that very blue-chip endowment funds were selling off their venture capital portfolios, it was like offering water in a desert.

Specifically, Fund 1 had a seed position in Stripe, and Fund III had a very large position from Databricks' Series A. a16z went to its LPs and said, “We know you are in a liquidity crisis. If you are willing, we would like to buy back your stakes in these names and find a way to give you some liquidity.”

“Unbelievable, Packy,” Jen recalled, “all 30 of the LPs said, ‘Absolutely not.’ They were like, ‘Thanks, but we don’t want liquidity in those names. We want liquidity in other names.’”

a16z's LP, David Clark of VenCap, explained, “VC is not about early liquidity. It’s about compounded growth over the years. We don’t want our managers to sell their best companies too early.”

Anne Martin from Wesleyan was one of those thirty early LPs and is a testament to the power of compounding. She has supported a16z since Fund 1 in 2009 when she was at the Yale endowment and has participated in twenty-nine funds as CIO of Wesleyan. The new fund a16z just closed will bring her total to over thirty funds.

“a16z is a very meaningful position in the portfolio I underwrite and is also our longest-held position,” Anne told me last month during our conversation. “This was one of the two new managers I brought to my investment committee in my first meeting after I was hired.”

Starting this relationship with a $300 million fund—“she negotiated the limited partnership agreement directly with Ben,” Jen said—Anne agreed with a16z's view that the opportunity has expanded enough to support larger fund sizes:

“Interestingly, Andreessen… you take a $1.6 billion AI infrastructure fund, you build a simple matrix, and you think, ‘Okay, assuming they have 8% of the company at exit…’ What do you need from the exit to return the fund? If you have 8%, you need a $20 billion exit. You know, that’s rare, but Andreessen seems to have quite a few of those cases. Another impressive thing is, for example, is 8% the right number for them? Because many times they have larger ownership.”

Illustrative purposes only

“I think for them, it’s about ownership and their ability to help these companies achieve tremendous outcomes,” Anne told me. “That’s why LPs feel comfortable with the scale of these funds.”

This ability to help achieve tremendous outcomes is why even the most sought-after founders are willing to “take” lower fees from a16z than from competitors. In just a few deals in 2025, a16z's investment prices were lower than those of other top firms investing in the same round. While it’s inappropriate to share specific names, I have heard that just last year, four investments in well-known tech companies followed this pattern.

In fact, founders value the resources a16z brings to the extent that they can today occasionally pay below market prices. This is a huge change from earlier when competing VC firms were so angry about the prices they paid a16z that they nicknamed the firm “A-Ho.” This proves that working with a16z has real, tangible value, and companies “pay” for it with higher dilution than they would give to other firms.

That said, while I mentioned that two voter groups are important, at the end of the day, there really is only one. I believe that if the best founders want to work with a16z, the best LPs will too.

Has a16z improved the outcomes of its portfolio companies?

That’s a question, huh? Some hypothetical formula might look like this:

Percentage of market cap attributed to a16z * Affected market cap

The tricky part is that to really maximize the left side of the equation, you have to provide help when the right side is at its minimum.

When you do that, when you help small companies become large companies, you create a loyalty that means founders are willing to speak well of you to other founders considering taking your money and to those writing articles about you.

When I had Erik Torenberg introduce me to some of their founders, he connected me within hours to founders representing over $200 billion in market cap, including Ali Ghodsi of Databricks and Garrett Langley of Flock Safety.

I specifically mention these two because within 48 hours of our connection, Databricks announced it raised $4 billion at a $134 billion valuation, while Flock Safety helped catch the suspect in the Brown/MIT murder case. It’s a heartfelt power surge.

Boston.com and The Wall Street Journal

What I want to understand is how a16z wields its power on their behalf. Does it really help shape outcomes? Does working with a16z really change their trajectory?

Does a16z's investment of hundreds of millions or billions in power infrastructure have a significant impact on the consumers of that power?

To believe in a16z's third era bet, that it can expand the market for new tech companies, making its portfolio companies more valuable than they would be otherwise, in order to generate strong returns on $15 billion of new capital, you might need to believe the answer to this question is yes.

The answer to that question is yes.

Recall that Databricks' Ali said there would be no Databricks without a16z. That adds $134 billion (and counting) to the addressable market for venture capital, and about $20 billion to a16z's net returns. Even if he is exaggerating, there is reason to believe that a16z's support for Databricks—from early sales to the Microsoft partnership to support in building specific departments—has repaid every dollar a16z has invested on its platform since its inception.

In fact, assuming a16z still owns about 15% of Databricks, a rough calculation would estimate that the impact of the company would need to account for about 25% of Databricks' value to repay the standard VC management fees that can be assumed a16z has brought since its inception.

All the founders I have spoken with describe a specific working style that is consistent at a16z, regardless of which GP you work with, and is clearly inspired by CAA: they don’t get in your way, let you run the company until you ask for something, at which point they swarm in.

This is how a16z wins deals. The general partners of each fund decide what to invest in, and when they need to, they call on the company’s other resources, including Marc and Ben, to win the deal.

“The company is at its best when it’s about empowerment, delegation of belief, and collective problem-solving,” David Haber told me. “Marc basically says, ‘Listen, if you tell me this is the next Coinbase, I’ll fly anywhere in the world. I’ll have that entrepreneur over for dinner at my house tonight. Get on the plane, go all in.’”

Once the deal is done, this is also how GPs work with founders.

“Regardless, they are extremely supportive. a16z always supports me and the founding team, even to an excessive degree, even when they disagree with me. They don’t bother you with things you don’t need,” Ali told me. “But once you need them, they go all in and get it done.”

Of course, a16z would be like this for Databricks, but I heard the same thing from some a16z-supported portfolio companies that are in the early stages of their journey.

Shane Mac, CEO and co-founder of the messaging protocol XMTP supported by a16z crypto, appropriately messaged me saying, “a16z has done a lot. Like most VCs do. I think what’s more important is what they don’t do:

They don’t tell me what to do. They don’t play short-term games. They never waste my time. Every connection they’ve built has changed the trajectory of our business. They help me believe in myself more and realize that I can build something as ambitious as this, and we can change the world together.

I think that’s the best thing they actually do. They believe in me and push me to realize I can do more than I think.”

Dancho Lilienthal and Jose Chayet, founders of [untitled], who I wrote about when a16z invested at the end of 2024, shared a very similar experience, even though they worked with different GPs (Anish Acharya) from different teams (AI Apps).

A few weeks ago, they had a Zoom call with Anish. They were nervous because their growth was compounding rather than exploding like AI companies.

“We were either afraid that maybe investors would say, ‘Oh, I don’t want to give them more time because they’re just slowly burning,’” Dancho recalled. “And Anish basically looked us in the eye (remotely) and said, ‘Guys, the only way I’m not here supporting you is if I’m dead or I’m fired. I’ll be here regardless.’”

This is how they describe the “let you breathe and then swarm in” approach:

They are like the ideal version of great parents. They are really there when you need them, holding you accountable, confident that everything is good for you. When you don’t need them, they don’t get in your way or become annoying.

It’s beautiful. And it’s by design.

Joe Connor, founder of Odyssey, a school choice platform supported by a16z and not boring capital, said he doesn’t seek daily operational advice from a16z, but “anytime I need to talk to anyone on the planet, if I message Katherine, I can talk to them.”

While it allows you to connect with any expert on any topic in the world, a16z explicitly does not want to get involved in the operations of its companies. In a 2014 HBS case study, Marc said, “We are not the training wheels for startups. We won’t do for the company what they have to be able to do for themselves.”

What a16z aims to provide is legitimacy and power.

The company has offered many services over time, and Alex Danco, someone who thinks about these things, told me, “What’s the most important service we provide now? It’s recruiting and sales and marketing. Why those two things? Because that’s where you need the legitimacy bank. The meaning of a16z is to be the legitimacy bank.”

Or, as Marc said, “What you want to get from your VC is power.”

Joe gave me two examples.

Not long ago, when it was still small, Odyssey encountered a Stripe issue that couldn’t be resolved through normal channels. “a16z put me in touch with Patrick Collison via email, and the issue was resolved immediately,” he said. “Whenever I seek help with something I need, I have never been turned down. Stripe is worth about $95 billion, and we are worth nothing, but we are all part of this a16z ecosystem, and people pass the love down.”

Outside the a16z ecosystem, the name still carries weight. Odyssey sells to state governments, and its employees might not be able to name three venture capital firms or care about them. But Joe said, “They know a16z. They know Marc and Ben. In the beginning, before we had a track record, it gave states confidence, believing we could do what we said we would do. Believing we had better technology than we claimed because the people who supported Stripe and Instacart said we did.”

In October 2024, Odyssey won the contract to manage Texas’s $1 billion Education Savings Account (ESA) program, the largest program in the nation. Now, it has its own legitimacy.

This is what legitimacy looks like; it shows that legitimacy can scale. For the vast majority of markets that don’t closely follow Silicon Valley, legitimacy requires scale. The better a16z markets itself, the more legitimate its portfolio companies appear in the eyes of potential customers, partners, and employees.

“If our company did all sorts of great things and no one knew,” Ben asked in It’s Time to Lead, “did we really do it?” Clearly, a16z is marketing to founders. They need to know what it can do for them. But it is also marketing to everyone those founders might want to do business with in the future.

Marketing

That’s why it makes sense to spend money building the best new media team.

Some attention is cheap and derivative. The new media team wants to make attention meaningful. The team operates a full internal media business, building and running high-quality owned channels (on X, YouTube, Instagram, and Substack), executing publications and timeline takeovers, and embedding directly into portfolio companies during key moments.

“We’re going through a bit of a PR challenge,” Garrett Langley of Flock Safety told me two weeks ago, before his company helped solve the murder case involving MIT and Brown University, at least for a time winning back the PR cycle, “while most of our shareholders have ideas, a16z took action. Erik and his team jumped in. Literally. They’re now in our Slack. They’re in our positioning/branding documents. We just did a podcast with Ben this week. Having a trusted and respected brand like a16z stand up for what we’re doing is crucial for the market and our employees.”

When times are good, they were there in those exciting early days too. Fei-Fei Li, the legendary computer scientist and founder of World Labs: “Four weeks before our Marble launch, their new media team came up with an idea I had never seen before. They wanted to shoot our announcement video on a 3D LED volume stage, generating the environment in real-time with our own product. They collaborated with us on everything: film videos, behind-the-scenes documentaries, launch event activities, introducing influencers in the visual effects community. This launch went viral. We hadn’t built up our marketing power yet, and they helped lay the groundwork for our operations. That kind of support, from creative vision to company building, is something you can’t find elsewhere.”

I am biased because these are friends and long-term collaborators, but they are among the best in the industry.

Erik has long been obsessed with building a new media organization, which is why I turned to him to produce Age of Miracles. He has also been obsessed with the idea that venture capital firms can have structural advantages.

For example, Erik and I have talked about how he is considering building a team, but I never dreamed he would recruit Alex Freaking Danco.

If writing is a power transfer technology, which I clearly believe it is, then having Alex Danco and newly hired Elena Burger write with you and for you is an incredible superpower that money can’t buy. While every company is trying to hire a Chief Storyteller, a16z is simply collecting them and spreading them across the portfolio.

Or, I first met Erik and David Booth when I was doing On Deck in 2019. No one in tech thinks about building community like David does. Now, he can leverage more resources and access to the world’s best talent to apply what he has learned, trying to make a16z a better “preference attachment” machine and turn VC into a network effects business.

I know I’m rambling a bit here; a16z has previously tried to own narrative power through initiatives like Future, but those initiatives failed. However, 1) based on the economic logic above, a16z should try 100 attempts like Future, and 2) this is the platform team I know best because that’s what I do, and I don’t even think these people are gettable. If this is the level at which other teams operate, it gives me more confidence that they are really building a machine with compounding advantages that the company cannot build on its own.

Every dollar spent telling the story of the company and its portfolio companies pays off in so many directions that they become rounding errors, and if all those dollars, almost regardless of how much a16z spends, mean winning and helping to create another Databricks, Coinbase, Applied Intuition, Deel, Cursor, or insert your favorite a16z company here, it’s all worth it.

This is the economics a16z plays in everything. It’s the same logic the company applies to investing in startups—“You can only lose the dollar you invest, but your upside is actually unlimited”—applied to everything the company does.

For a16z, building the best versions of things that will be needed to build most of its portfolio companies (but not core to those companies) makes more sense than any single company doing so, at least before it gets bigger.

Recruiting

Very tactically, two things I’ve heard from every founder I’ve spoken to is that a16z is particularly influential in two areas: recruiting and sales.

Since Marc and Ben brought Shannon Schiltz (Callahan) from Opsware, recruiting has been a core part of a16z’s product, with Shannon convincing Ben to hire Jeff Stump as head of talent, and the two of them built a talent team that early funds couldn’t buy.

“Scale and quality are different,” Ali said when discussing a16z’s talent team compared to other VCs. “It’s like a small side hustle where I hire a few people to help you recruit, versus a massive recruiting department whose job is recruiting and measuring success by actually closing candidates and providing you with a top-of-funnel.”

Founders at all stages have told me that the talent team has been helpful from the very beginning to the very end.

Oskar Shulz, co-founder and president of Cursor, said in an email, “The scale of a16z allows them to provide help across several different functions,” with the most significant impact being “engineering/research recruiting and executive recruiting. Smaller companies don’t have the resources to give us a good overview of the talent pool.”

Resources can also mean GPs. In a recent conversation between a16z AI infrastructure GP Martin Casado and Cursor CEO Michael Truell, they discussed Martin spending evenings and weekends recruiting for Cursor. “Get your board members to make a lot of calls until they beg for mercy,” Truell joked. “Leverage their time.”

Qasar Younis, founder and CEO of Applied Intuition, valued at $15 billion, said, “Many of our early employees, including our company president, came through a16z. Our financial second-in-command came from a16z. We even have several a16z employees working at Applied, including Matthew Colford, who was an early member of a16z’s government relations team.”

Alex Bouaziz, co-founder and CEO of Deel, said that as his company has grown and become a larger part of the a16z portfolio, it has been able to leverage more resources:

“From the moment we started working with a16z, Shanbar [executive talent partner Shannon Barbour] felt like part of our talent acquisition team. We were able to work closely with her and Jeff Stump on executive recruiting, and when we were hiring a CFO, Ben [Horowitz] interviewed every candidate we were considering for the position, which was so cool. The CFO we wanted [Joe Kauffman] is a very talented and demanding person, so Ben and Anish helped me land him. Anish was texting him. Ben was texting him.”

Now that Deel has surpassed $1 billion in ARR and is preparing its board for an IPO, “a16z helped us hire two of the three independent board members—Francis deSouza (Google Cloud COO, Disney board member) and Todd Ford (former Coupa CFO, HashiCorp board member). They helped find, conduct deep due diligence, background checks, and make introductions. They took the time to become true strategic partners.

Sales

a16z is equally helpful in sales, both directly and indirectly, from early to later stages.

Ian Brooke, founder and CEO of Astro Mechanica, a portfolio company of a16z and not boring capital (which I wrote about in April 2024), said that both direct and indirect support are crucial for his business trying to sell to the Department of Defense.

“I don’t think we could present any other fund to our government partners with the credibility and brand recognition that a16z has. Especially within the DoD,” he said regarding the indirect aspect. On the direct side, “They ensure that we are known within government agencies so that they can make the right introductions, like the connections they established for us with the Air Force Rapid Capabilities Office.”

“Working with the government is all about building relationships with the right people and offices,” he continued, “and a16z actually values cultivating and sharing those relationships. A senior person within the DIU (Defense Innovation Unit) literally told me, ‘We take a16z’s recommendations very seriously. We ask them, ‘Who should we meet?’”

Qasar’s company sells to automotive manufacturers and is increasingly selling to defense and other U.S. vitality sectors. He credits a16z for helping Applied break into the defense sector: “Our first defense customer came through the kind of EBC (Executive Business Center) work they did.” Applied also received targeted introductions, regardless of the industry. “Anyone I want to reach out to, Marc can connect me with,” Qasar said. “Whether it’s our defense business, automotive business, construction, mining, he can find them.”

Of course, a16z can also help sell software. This is the company’s core business, where network effects and economies of scale truly manifest.

Jordan Topoleski, COO of Cursor (a16z’s first support in Series A), explained how a16z helped them sell: “The platform team introduced us to nearly 200 key target customer CTOs in the first year we worked together. They held daily stand-ups with us, came to our office late at night, and had a dedicated team focused on organizing strategic meetings for us. As we expanded our footprint in financial services, they once arranged 34 executive meetings for us in their office in a week. They felt like an extension of our GTM team.”

Then there’s Databricks, which attributed 50% of its early sales to EBC, specifically crediting Ben for facilitating the transformative Microsoft deal.

Alex from Deel said that while his company struggled to sell to enterprises in the early years, it is now leveraging a16z’s enterprise market and its GTM (go-to-market) team to help reach and win over large organizations. Today, 10-15% of the business is enterprise business.

Both Alex and Garrett from Flock Safety said that while the “let you breathe and then swarm in” approach is real in the early stages, as their companies grow, a16z’s platform team embeds into the right teams within their companies. This is a way to help their businesses while giving founders space.

“I often find it hard to tell investors what I need help with,” Alex said, “but when you have embedded platform personnel—where the recruiting and GTM teams align with my similar teams—it’s better than needing to make specific requests.”

Garrett from Flock Safety described a VC barbell:

With some companies, you’re choosing the GP, and the company is secondary. I think with a16z, you’re choosing the company, not the GP. While DU is nominally on our board, I spend time with Ben, DG (head of growth), Alex (growth team), Erik (responsible for PR/branding), Stump (executive recruiting), and I could go on, but I think you get the point.

That’s just me; my executive team has specific company contacts in every function. That’s incredibly helpful.

Being so deeply entangled with its largest companies means a16z can help drive business growth in ways that are tangible and measurable.

But perhaps more importantly, it means a16z understands the business so well that when the time is right, it can open the faith truck and cash truck.

Faith

Qasar Younis has had a great experience with a16z. Marc is on his board, which is rare, and Marc and the broader firm are there when he needs them, opening up their contact book.

“But,” he admits, knocking on wood, “we haven’t encountered any real problems yet. I think that’s really a severe test for investors—how they react when you run into issues.”

For this, the evaluations from Garrett of Flock Safety and Alex of Deel say it all. We talked earlier about the new media team embedding into Flock during a recent PR challenge.

Alex from Deel is no stranger to last year’s PR challenges.

“As a company,” Alex told me, “whenever there’s negative media coverage, they stand with us directly.”

I remember this. I remember seeing Ben and Anish tweet support for Deel almost immediately after Rippling accused Deel of espionage, and I thought that was… bold.

However, Alex said, “They said, ‘We know who you are, how you operate, your background, your ethics. We stand with you.’ They stood up very publicly and very immediately. After closed-door meetings, they reminded people, ‘Guys, you know Alex.’ When someone like Ben knows all the details and has been with you through this exact situation for two or three years, it’s a powerful representation.”

“Investors are supportive,” he said, “but they’re just another layer. They’re figuring things out, helping me figure out how to manage it, finding the best people to help, getting their hands dirty. When all this nonsense comes out, I can’t find a better partner.”

If you can’t say “screw you” on behalf of your portfolio companies, what’s the point of having “screw you legitimacy”?

Then, Deel broke through $1 billion in ARR, and it raised $300 million from new investor Ribbit Capital, which presumably did due diligence and came to the same conclusion as a16z, with a post-money valuation of $17.3 billion, $5 billion higher than the D round valuation before the February 2025 debacle. Of course, a16z participated in every round, including the secondary market.

“They are very loyal investors,” Alex said. “Whenever there’s a secondary market transaction or investor sell-off, a16z buys up all the stock they can get their hands on. They bought every share of Deel on the market because they were too deep in. The rest of the market doesn’t know us as well because Deel hasn’t raised funding.”

Once, Deel needed money to acquire a company. “Our C round wasn’t a formal round,” Alex recalled. “I wanted to buy a company, I needed money, and I talked to a few investors. There’s nothing better than raising money from a fund like a16z, where you can turn to them and say, ‘This will be a game changer,’ and they can act quickly to drop $100 million for the acquisition you want.”

Today, due to this ongoing support, a16z holds “over twenty percent” of Deel in its fund, according to Alex, a position won through faith and concrete tactical support.

This is a validation of the model: knowing your company so well, working so closely with them that you understand them better than anyone else, and being able to go all in when others can’t, while helping them grow larger than they would otherwise.

Talking to its founders makes it clear that working with a16z has had a direct, tangible impact on their businesses. However, like a16z’s policy work, the company’s influence is both direct and indirect. Even founders outside the a16z portfolio benefit from the changes it brings to the industry.

This means that another way a16z helps its portfolio companies and the broader new technology companies is by forcing other funds to spend their management fees to help startups win.

“Many of the things a16z promoted in its early years have become truly mainstream venture capital views,” Qasar from Applied Intuition told me.

“Founder-centric, with technical GPs, with a platform. You look back at Benchmark, Founders Fund, KP, Sequoia, Khosla—they would take pride in writing a check and then disappearing. There was really a bit of ‘Hey, you’re never going to talk to us again.’ That was a feature, not a bug. And now it’s actually flipped, and founders say, ‘Well, what else can you do for me? I can get money anywhere.’”

“That’s the fingerprint of a16z.”

As I wrote in "Venture Capital and Free Lunch" at the beginning of 2024, I believe management fees are “one of the most interesting capital buckets in the world,” and a16z has a lot of that funding. This has been one of the main criticisms of the firm—of course, it wants to raise a lot of money because it earns management fees from every dollar anyway.

A more interesting observation might be: it certainly wants to raise that money because that way it can deploy significant capital to build something that almost no other capital pool is incentivized to build, to help its companies and new technologies win.

Working with a16z crypto initially made me realize this, and as I write this article, it’s clear that no other company has used its management fees for beneficial purposes as long-term, consistently, actively, or successfully as a16z.

“From my perspective,” David Haber said, “one of the structural advantages of the company early on was that Marc and Ben were already very wealthy, so they didn’t need to take salaries. Instead, they played the long game, investing management fees into the platform and building a source of compounding competitive advantage. We continue to do this deal: we don’t pay people more money and bonuses like many funds do; we choose to invest in the companies and increase our advantages over time.”

You can spend $1 billion of LP capital to build a machine to try to help all the new technology companies in your portfolio succeed; it will pay back multiple times on a Databricks, and with every Coinbase, Applied Intuition, Deel, Cursor, whatever you call it, it will continue to pay back over and over again.

So of course, every large venture capital firm is now trying to build such a machine, which means founders have billions of dollars and hundreds of smart, well-connected people working on their behalf to replace the rigid existing enterprises, eliminate waste, fend off death, shrink the globe, keep it safe, and do all the things technology should serve for the future.

That’s the point.

The Future of Future Companies

When anyone joins a16z (which happens frequently now with over 600 employees), they must sign the company’s cultural document.

While everyone in the company reads the document, Katherine Boyle believes “we don’t give it the practical reverence it deserves.”

“There’s a line,” she said, “the third one: We believe in the future and bet the company on it.” Katherine loves that line. As she sees it:

Everyone in Silicon Valley misunderstands this. It means we will never hold a negative attitude. That’s why sometimes we look foolish compared to those companies that have a negative attitude. Our cultural document states that we will never bet on the future losing.

I actually think that should be the first line. No other company can say that. Other companies will issue memos saying, “A macro crisis is coming.” “We believe in the future and bet the company on it” is actually the reason Marc and Ben started this company.

Marc and Ben don’t mind looking foolish. But if you’re going to bet on the future losing in any category, you’ll be fired.

Everyone in Silicon Valley misunderstands this.

We will never hold a negative attitude.

That’s why sometimes we look foolish compared to those companies that have a negative attitude. Our cultural document states that we will never bet on the future losing.

I actually think that should be the first line. No other company can say that. Other companies will issue fundraising memos saying, “A macro crisis is coming.”

“‘We believe in the future and bet the company on it’ is actually the reason Marc and Ben started this company.”

Marc and Ben don’t mind looking foolish. But if you’re going to bet on the future losing in any category, you’ll be fired.

To wholeheartedly and vocally believe in the future, to hear it positively is quirky naivety, to hear it negatively sounds like nonsense.

A few years ago, before I delved into a16z internally, I thought this was at least partly nonsense. It’s a group of elephant hunters! They just want to win. You can drape the future like a flag of the United States.

From the outside, a16z seems to be trying to build one of the largest financial institutions in the world. It looks like that partly because that’s exactly what it’s building. Where I come from, about $90 billion in regulated assets under management is real money.

When we discuss a16z’s funds against large financial institutions (like Apollo and Blackstone, which manage trillions in assets), David Haber (a16z fintech partner) points out that a16z is still relatively small by comparison. Blackstone manages $1 trillion; Apollo is close behind.

Regarding compounding advantages, scale, incentives, internal operations, and what it takes to run a global financial institution, a16z has a lot to learn from these companies. On the surface, the way these companies look today is similar to how a16z hopes to become.

I think there’s a significant difference.

Apollo and Blackstone don’t actually believe in anything. They are financial institutions designed to provide financial returns. There’s absolutely nothing wrong with that. The economy needs the services they provide, and they are very good at delivering those services. The best at it.

a16z believes. a16z is building a company aimed at bringing a better future through technology and using finance as a means to achieve that. A company that grows and compounds like any normal tech company, getting better as it grows. A company that can mobilize more resources and power to represent the future it believes in, even if it’s still not quite clear what that future will look like.

That’s the job of entrepreneurs. They provide the details. a16z provides the faith.

When we ended the call, I asked Ali Ghodsi (co-founder and CEO of Databricks) what he thought was the biggest misconception about the company he has worked at for over a decade. He didn’t think long.

“Ben and Marc are believers,” he said. “If reading their blogs doesn’t make that clear, I think they are tech believers to the extreme. They genuinely believe technology can change the world. In every startup they’re involved in, that’s their vision. They envision the full potential of things.”

The history of a16z so far is a history of everyone thinking Marc and Ben are doing venture capital in a foolish way, waiting about a decade to see the results, realizing they were right, and then trying to do the same thing themselves—only to find they didn’t enjoy the compounding advantages a16z accumulated during that decade when competitors didn’t believe.

Then starting over.

When the fund was only $300 million, or even $1 billion, that certainly worked. It doesn’t work at this scale.

In the early days of social networks, that certainly worked. But in, say, the cryptocurrency space, it doesn’t work. Or in the American Dynamism space. Or in AI.

Then, of course, at least so far, it has largely worked.

When a16z believes, it believes more firmly and longer than anyone else. It has the resources to be patient and the resources to know that its steadfast commitment is likely to pay off.

Whether you think they are right or wrong this time, whether you agree with their views, whether you like the way they play the game, Marc and Ben and the team they’ve built at a16z truly believe they are working for the future, and in doing so, they are working for all of us.

While that sounds strange, it’s one of the most humble ways of doing venture capital I’ve seen: if a lot of very smart people are excited about something, then there’s probably something worth getting excited about. Follow them there. Raise an entire fund to follow them before anyone else even thinks there’s something there.

You can disagree with this approach. You should disagree! There’s no absolute right way to do venture capital, but you have to believe in something.

What you probably shouldn’t do is judge a16z without understanding the game it’s playing or the bets it’s making.

a16z is betting that technology will consume more and more of the economy, and when that happens, the new companies will be 10 times, 100 times the size of the old companies they replace. It’s a foundational bet, but it’s also a bet any self-respecting venture fund can participate in.

a16z is betting that it can help make that future bigger and better than it would have been otherwise through policy, platform, and power, thereby allowing its portfolio companies to win in the process. Based on my conversations with a16z’s founders, this bet seems to be paying off today, and it’s an incredibly asymmetric bet. Every victory can pay for a lot of capabilities. This machine is compounding in value.

In my view, given the first two points, the most interesting bet it’s making is that seemingly most obvious bet, if I were to phrase it like this:

A VC firm can become better as it scales, just like almost every other type of company in the universe.

If it’s right, and I think it is, then a16z’s best days are ahead.

That’s great. I like these guys.

But the magic of a16z’s product, the thing that actually improves as it scales, is that as it can build more resources, skills, networks, and power, every new technology company it works with, and even many that don’t work with it, will benefit as it scales.

A world where a16z succeeds is a world where new technology companies can compete with giants on a more level playing field, where the best products win.

A world where a16z succeeds is a world where new technology—across every layer of the stack from energy to AI, from cryptocurrency to autonomous vehicles—penetrates the economy more quickly and impactfully.

A world where a16z succeeds, if you believe, like I do, that new technology empowers humanity to make the world a better place, is a world that arrives more abundantly, sooner.

a16z is working for the future. If it’s truly right, then the best days for all of us are ahead.

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