a16z will “continue to tailor” its multibillion-dollar crypto funds to market opportunities, GP says

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Welcome back to Chain Reaction, a podcast that interviews crypto newsmakers to better understand the technology behind the hype and the people working to build a decentralized future.

For this week’s episode, Jacquelyn interviewed Arianna Simpson, general partner at Andreessen Horowitz (commonly known as a16z).

Before joining a16z, Arianna founded Autonomous Partners, an investment fund focused on crypto. She also helped launch Crystal Towers Capital, an early-stage fund that primarily invests in YC companies.

A16z has dug deep into the crypto space after launching four funds dedicated to the industry. The last one closed at $4.5 billion in May 2022, and Arianna thinks that’s appropriate, given the size of the opportunity.

“I think certainly the ecosystem has grown to a size where it certainly supports a fund of this size, and that’s why we raised a fund of this size,” Simpson said. “We didn’t have to raise any number; we chose a number that we thought spoke to the size of the opportunity. The ecosystem has obviously grown tremendously and continues to attract tons of early-stage entrepreneurs building across the board.”

Asked if there would be a fifth crypto fund from a16z, Simpson said: “I certainly hope so.” She added a16z will “continue to tailor our fund sizes to opportunities we see in the market.”

Some of the firm’s portfolio companies include major crypto players we’ve interviewed in the past, such as Alchemy, Avalanche and Aptos.

Over the years, there has been an expansion of investment opportunities “into a whole new world of consumer applications, experiences and products that just weren’t possible because they couldn’t run on blockchains a few years ago, and now they are,” Simpson said. “To me, that’s what’s really exciting: there’s this whole world of applications that can be used by consumers.”

We talked about Simpson’s background, how her strategy has changed over the years, what she looks for in entrepreneurs and whether she would launch another VC firm in the future.

We also discussed:

• The current investment climate
• The Web3 gaming site
• Where the founders build
• The regulatory landscape
• Advice for entrepreneurs

Chain Reaction comes out every other Thursday at 12:00pm PT, so be sure to subscribe to us on Apple Podcasts, Spotify, or your favorite pod platform to stay up to date on the latest in web3 and crypto.