A16z to Boost Size of Its Third Crypto Fund: Report

The fund could lead to $50 million in annual fees, sources told blogger Eric Newcomer.

May 29, 2021 at 12:22 a.m. UTC
Updated Sep 14, 2021 at 1:03 p.m. UTC

Venture giant Andreessen Horowitz (a16z) is doubling the size of its third crypto fund to $2 billion, according to blogger Eric Newcomer.

  • According to a May 27 entry on his website, which covers technology venture funding, the Menlo Park, Calif.-based firm will charge “a 2.5% management fee for most of the first decade of the fund,” which could lead to annual $50 million fees.
  • The general partners will earn 25% of the profits, also called a carry, until the fund doubles and 30% for performance exceeding that threshold.
  • VC carries typically range between 15% and 30%, and a16z will not receive a carry if the fund loses money.
  • In April, the Financial Times reported the firm had created the fund, with sources then saying it was looking to raise between $800 million and $1 billion.
  • Last month a16z cashed out $449.2 million in Coinbase stock on behalf of its investors when the cryptocurrency exchange made its debut on Nasdaq. The VC was an early investor in Coinbase.
  • A16z’s has $865.5 million in crypto funds among its total $16.5 billion assets under management.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.