A16z to Start Favoring High Risk Crypto Assets as Migration Away From Role as Traditional VC Firm Begins
As the bear market becomes less prevalent for the cryptocurrency industry, more startups are expected to come in. Venture capital firms have begun preparing themselves for this influx including A16z. A16z, which was founded by Marc Andreessen and Ben Horowitz, recently spoke with Forbes, stating that all 150 employees are presently registered as financial advisors.
With the new internal changes, the employees can now be more aggressive in their investments into high-risk asset classes. In particular, this change affords them the ability to get involved with cryptocurrencies. Until now, A16z has predominantly functioned as a traditional venture capital firm. Now, crypto startups can be backed by up to $1 billion. They can also purchase “unlimited shares in public companies are from other investors.” Still, due to the nature of these transactions, they will need to comply with the current rules of the US Securities and Exchange Commission (SEC).
When Andreessen Horowitz was considered a venture capital firm, they were unable to invest as deeply into these other asset classes, predominantly because of the regulations surrounding them. The SEC states that any venture capital fund must have less than 20% that is invested in high-risk assets, which includes secondary share purchases. The transition to the new infrastructure was established last month, coming with an audit of existing employees and the addition of several new compliance officers.
Katie Huan, a general partner of the firm, spoke with Forbes about the changes as well, saying that there are many benefits to the changes, including the fact that partners within A16z have the option of collaborating on deals, playing to the strength of each person involved.
So far, the firm is already invested in Coinbase, TrustToken, Oasis labs, and multiple other startups. They even launched a wing of the company that is geared towards cryptocurrency with over $300 million invested.
At this point, requests for comments on the changes have been declined by a spokesperson for Andreessen Horowitz.