DURING THE FIRST WEEK of November, Marc Andreessen and Ben Horowitz, two of the most recognizable names in venture capital, put on a show for their firm’s backers—an audience of gold-plated endowments, sovereign wealth funds, and pension plans.
The three-day affair was held virtually on Hopin, an online platform funded by the VC firm, and paired with in-person dinners for more than 100 guests in New York City and at the posh San Francisco sushi restaurant Pabu Izakaya.
Amid a battery of distractions competing for the audience’s attention—from jarring economic data, to the war in Ukraine and midterm elections—Andreessen Horowitz’s coterie of fund managers stayed on message, framing the market turbulence and tumbling tech valuations as an opportunity.
More than ever before in the firm’s history, Andreessen Horowitz’s partners needed to impress.
By the end of last year—a decade after Andreessen Horowitz, or a16z, was founded—the firm was riding high with $55 billion in assets under management, more than three times the amount in 2020. That sum, massive by the standards of Silicon Valley venture capital firms, represented an accumulation of shares in startups and crypto tokens during the best time for tech investing since the dotcom boom.
Nearly a year later, Andreessen Horowitz is navigating the worst market for tech since the firm was founded. Coinbase, the company that generated the highest return ever for the firm, is down about 80% so far in the stock market this year. Share prices of other now-public a16z investments, such as Airbnb and Affirm, are also down sharply. And a few of its still-private companies, including Instacart, have cut their valuations significantly. Meanwhile, one of the largest exchanges in the crypto industry has collapsed, throwing the fate of the entire digital asset industry, where a16z has pledged billions, into question.
“Andreessen Horowitz has an awfully good track record to point to…But that was then, and this is now,” says Len Sherman, a professor at Columbia Business School.
If investors are getting antsy and reassessing their bets in a shifting market, they’re not alone. Andreessen Horowitz is itself looking beyond the venture business, taking steps to become a more versatile financial creature that can tap new pools of capital and weather changes in the startup funding climate.
This evolution, begun a
