Key Takeaways
- • Andreessen Horowitz raised $300 million for its first-ever fund dedicated to crypto companies, announced Monday, June 25, 2018.
- • The fund will deploy capital over two to three years across early-stage coins and tokens and later-stage networks such as bitcoin and ethereum, with holding periods of up to 10 years.
- • Chris Dixon, general partner, describes the vehicle as an "all-weather" fund that will invest consistently regardless of market conditions, viewing price volatility as an opportunity.
- • Katie Haun, former Justice Department federal prosecutor and Coinbase board member, joins as the firm's first female general partner to lead the fund, bringing regulatory expertise.
- • The firm first invested in crypto through Coinbase in 2013 and has not sold any crypto investments to date, according to the firm.
Summary
Top venture capital firm Andreessen Horowitz is increasing its commitment to cryptocurrency despite a difficult year for bitcoin and other digital assets, according to CNBC. The Menlo Park-based firm raised $300 million for its first-ever fund dedicated to crypto companies, which it announced on Monday, June 25, 2018. Over two to three years, the fund will invest in a range of assets, from early-stage coins and tokens to later-stage networks such as bitcoin and ethereum. The firm plans to hold these investments for up to 10 years.
Chris Dixon, general partner at Andreessen Horowitz, told CNBC that the firm is taking a long-term and "patient" approach. He acknowledged the sector's volatility, noting that bitcoin's roughly 50 percent price decline this year had been read by some as a "crypto winter," but said the firm would keep investing consistently through market swings. Dixon drew a comparison to 2009 and 2010, when a wave of entrepreneurs and developers built smartphone apps, and described 2018 as "one of those great times to invest." Investment criteria for the fund are flexible and span stages, asset types and geographies.
The firm made its first crypto investment through Coinbase in 2013 and said it has yet to sell any of its crypto holdings. The fund will be led by Katie Haun, a former U.S. Department of Justice federal prosecutor who helped launch the department's first government cryptocurrency task force and worked on the Silk Road case. Haun is also a Coinbase board member and has taught a digital currency and cybercrime course at Stanford Law School. Her regulatory background is expected to help portfolio companies assess how U.S. regulators may classify their tokens.
The regulatory backdrop remains a key consideration. SEC Chairman Jay Clayton said earlier in June that bitcoin and ether are not securities, though many but not all initial coin offerings are subject to securities laws, according to CNBC's reporting. Clayton had said in March that all ICOs constitute securities, and reiterated on Wednesday that "if it's a security, we're regulating it." Haun said the firm's main focus will be on founding teams, since many projects are built on underlying protocols and some are not yet live. Haun added that the goal is for crypto to "move beyond the speculation phase" and solve real-world problems.
Chris Dixon, general partner at Andreessen Horowitz, told CNBC that the firm is taking a long-term and "patient" approach. He acknowledged the sector's volatility, noting that bitcoin's roughly 50 percent price decline this year had been read by some as a "crypto winter," but said the firm would keep investing consistently through market swings. Dixon drew a comparison to 2009 and 2010, when a wave of entrepreneurs and developers built smartphone apps, and described 2018 as "one of those great times to invest." Investment criteria for the fund are flexible and span stages, asset types and geographies.
The firm made its first crypto investment through Coinbase in 2013 and said it has yet to sell any of its crypto holdings. The fund will be led by Katie Haun, a former U.S. Department of Justice federal prosecutor who helped launch the department's first government cryptocurrency task force and worked on the Silk Road case. Haun is also a Coinbase board member and has taught a digital currency and cybercrime course at Stanford Law School. Her regulatory background is expected to help portfolio companies assess how U.S. regulators may classify their tokens.
The regulatory backdrop remains a key consideration. SEC Chairman Jay Clayton said earlier in June that bitcoin and ether are not securities, though many but not all initial coin offerings are subject to securities laws, according to CNBC's reporting. Clayton had said in March that all ICOs constitute securities, and reiterated on Wednesday that "if it's a security, we're regulating it." Haun said the firm's main focus will be on founding teams, since many projects are built on underlying protocols and some are not yet live. Haun added that the goal is for crypto to "move beyond the speculation phase" and solve real-world problems.
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