Andreessen Horowitz, founded in 2009 by Marc Andreessen and Ben Horowitz, one of the leading venture capital firms active in the cryptocurrency space, plans to launch a separate fund for exchanging crypto assets.
The new fund could signal what some see as the next wave of innovation: direct investor involvement in cryptocurrencies, according to Recode.
In general, venture capital firms have been wary about directly investing in cryptocurrencies. Some have said their limited partners could do so on their own and avoid the fees that they’d need to pay to the venture capital firms to do it for them. Others, such as conservative limited partners, worry about the sector’s regulatory risks.
Andreesen Horowitz, however, has an exceptional track record in the crypto space. General partners Chris Dixon and Alex Rampell, who lead the team, are seen as guiding lights for the asset class in Silicon Valley.
So far, the company has invested in two types of funds. It has invested in early- and late-stage startups, the last of which totaled $1.5 billion, closing in 2016. It has also invested in bio projects, which last year provided the firm with $450 million for investing in a specific class of companies.
The company’s blockchain and cryptocurrency investments include Coinbase, Ripple, CryptoKitties Polychain Capital, a crypto specific fund, and ICOs. It has not, however, publicly traded crypto assets such as bitcoin.
A New Direction
The company declined to comment on the new fund.
However, a pair of job listings on the company’s website mention a “separately managed fund focusing on crypto assets.” The job postings do not indicate the size of the fund or when investing would begin.
The listings for a finance and operations manager and a legal counsel do spell out the following details:
The lawyer would be in charge of ensuring that the company’s crypto investments are SEC-compliant. This person would have to “operate in an area where the regulatory, legal and business climate remains largely unsettled,” the listing noted.
The finance manager would assist in collecting money from the company’s limited partners — known as a “capital call” in the parlance of the industry. One would be to help assign a valuation to the company’s crypto assets, which won’t be easy considering the volatility of some cryptocurrencies.
In Search Of New Opportunities
Some observers believe there is more money to be made in the digital currencies themselves than in the firms organized around them.
Andreessen Horowitz’s crypto fund investors are most likely to be digital asset supporters, or at least comfortable with risk in an uncertain financial and legal environment.
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