Wikipedia Deep Dive

Andreessen Horowitz

16 min read

The Firm That Ate Silicon Valley

In the summer of 2011, a venture capital firm that was barely two years old did something unprecedented: it became the first investor to hold stock in Facebook, Twitter, Groupon, and Zynga simultaneously—the four most valuable private social media companies on the planet. The firm was Andreessen Horowitz, and it had just announced to the world that a new kind of power broker had arrived in Silicon Valley.

Today, with forty-six billion dollars under management, Andreessen Horowitz—known universally by its alphanumeric nickname "a16z" (the sixteen letters between the 'a' and the 'z' in Andreessen)—sits atop the venture capital industry. It is not just the largest venture fund in the world. It has become something more: a cultural and political force whose influence extends far beyond Sand Hill Road, the famous Menlo Park street where venture capitalists traditionally cluster.

But to understand what makes a16z different, you have to understand what venture capital actually is—and why this particular firm decided to blow up the traditional model.

What Venture Capital Really Does

Venture capital is, at its core, a bet on the future. A venture capitalist raises money from wealthy individuals and institutions—pension funds, university endowments, sovereign wealth funds—and then invests that money into young companies that are too risky for traditional banks to touch. Most of these bets fail completely. A handful break even. And every once in a while, one explodes into something worth billions of dollars.

The math of venture capital is brutal and simple. A typical fund might invest in thirty companies over several years. Twenty of them will probably go bankrupt. Five might return the original investment. Four might double or triple it. But if just one of those thirty becomes the next Google or Facebook, it can return the entire fund many times over. This is why venture capitalists talk obsessively about "home runs" and "power law returns"—in their world, a single spectacular success matters more than dozens of modest wins.

Traditional venture firms operated almost like exclusive clubs. A handful of partners would meet with entrepreneurs, write checks, and then sit back and wait to see what happened. They offered money, a seat on the board, and perhaps some advice. Beyond that, portfolio companies were largely on their own.

Marc Andreessen and Ben Horowitz looked at this model and saw it as fundamentally broken.

The Founders Who Became Funders

Marc Andreessen's name is one of the most consequential in internet history, though many people today don't know why. In 1993, as a twenty-two-year-old computer science student at the University of Illinois, he co-created Mosaic—the first web browser that ordinary people could actually use. Before Mosaic, the World Wide Web was an obscure academic curiosity. After Mosaic, it became something everyone wanted to explore.

Andreessen followed Mosaic with Netscape Navigator, the browser that launched the commercial internet era. When Netscape went public in 1995, its stock price doubled on the first day of trading. Andreessen, at twenty-four, became a symbol of the internet gold rush—his barefoot portrait on the cover of Time magazine defined an era.

Ben Horowitz's path was different but equally formative. He spent years as an executive at various technology companies, eventually becoming CEO of Opsware, an enterprise software firm that lurched from near-bankruptcy to a $1.6 billion acquisition by Hewlett-Packard. Where Andreessen was the technical visionary, Horowitz was the battle-tested operator who had learned, painfully, what it actually takes to run a company through good times and terrible ones.

Between 2006 and 2010, before they formally launched their fund, the two men invested four million dollars of their own money across forty-five startups, including an early bet on Twitter. They became known as "super angels"—investors who operated at a scale and intensity that blurred the line between angel investing (wealthy individuals writing small personal checks) and institutional venture capital.

On July 6, 2009, they made their ambitions official, launching Andreessen Horowitz with three hundred million dollars in initial capital.

The Hollywood Model

From the beginning, a16z operated differently from traditional venture firms. The model they chose came from an unexpected source: Creative Artists Agency, the powerhouse Hollywood talent agency that represents movie stars, directors, and musicians.

At most venture firms, the partners who write the checks are the only people who really matter. A startup might get access to their Rolodex, but that's about it. Andreessen and Horowitz built something more like a full-service agency. They hired specialists in marketing, recruiting, business development, and government relations—all dedicated to helping portfolio companies succeed.

In 2010, they recruited Margit Wennmachers, a prominent marketing executive, as a partner-level hire focused on helping startups build their brands and tell their stories. This was unheard of. Traditional venture firms didn't employ marketing executives at the partner level—marketing was something portfolio companies figured out on their own.

By 2011, the firm maintained an internal database of designers, coders, and executives that it used to help fill positions at its startups. When a portfolio company needed a chief financial officer or a head of engineering, a16z could reach into its network and produce candidates that a young startup could never have found on its own.

The firm also courted advisory relationships that signaled its ambition to operate at the highest levels of power. Larry Summers, the former United States Treasury Secretary, became a special advisor in 2011. Adrian Fenty, the former mayor of Washington, D.C., joined the following year specifically to help portfolio companies navigate the complexities of government at every level—local, state, and federal.

The Investment Philosophy

What does a16z actually invest in? The short answer is: almost everything.

The firm backs companies across healthcare, consumer products, cryptocurrency, gaming, financial technology, education, and enterprise software including cloud computing, cybersecurity, and software-as-a-service. It invests in both early-stage startups that might be little more than two founders and an idea, and established growth companies that are preparing to go public.

This breadth is intentional. Andreessen and Horowitz believe that transformative technology can emerge from anywhere, and they want to be positioned to invest regardless of which sector produces the next breakthrough.

Some of their most famous early bets paid off spectacularly. In 2010, they led a ten million dollar investment in Okta, a cloud identity company that would eventually go public and reach a market capitalization of tens of billions of dollars. Their hundred million dollar investment in GitHub netted over a billion dollars when Microsoft acquired the company for $7.5 billion. Their early stake in Skype—a bet that other investors considered foolish because of legal troubles and competition from Google and Apple—proved prescient when Microsoft bought the company for $8.5 billion in 2011.

Other bets tell a more complicated story. The firm invested in Clinkle, a mobile payments startup that raised an extraordinary amount of money, generated enormous hype, and then collapsed without ever launching a successful product. They backed uBiome, a gut microbiome testing company that was eventually shut down amid fraud investigations. The $100 million they invested in Clubhouse, the audio-chat app that briefly became a cultural phenomenon during the early months of the pandemic, proved to be far more than the company was ultimately worth as usage collapsed when people returned to normal life.

This is the nature of venture capital. The spectacular failures are part of the model, accepted as the price of taking the kinds of risks that occasionally produce transformative outcomes.

The Cryptocurrency Conviction

No sector has defined a16z's recent identity more than cryptocurrency and blockchain technology.

The firm made its first crypto investment in 2013, backing Coinbase, the cryptocurrency exchange that would eventually go public in a direct listing that valued the company at roughly $85 billion. It also invested that year in Ripple, a cryptocurrency payment protocol. These early bets established the firm's conviction that blockchain technology represented something genuinely transformative, not just a speculative bubble.

In 2018, a16z raised a dedicated $300 million cryptocurrency fund—a substantial commitment at a time when many institutional investors still viewed the space as too risky or too strange to touch. The fund invested in projects across the cryptocurrency ecosystem, from infrastructure to applications.

The commitment deepened from there. In April 2020, even as the global economy reeled from the initial shock of the pandemic, the firm raised $515 million for a second crypto fund. In May 2022, they announced their largest fund ever: $4.5 billion dedicated entirely to cryptocurrency and blockchain investments. The breakdown was notable: $1.5 billion allocated to seed-stage investments in very early projects, and $3 billion for later-stage venture investments in more established companies.

Not all of these bets have worked out. The firm led a $150 million investment in Sky Mavis, the Vietnamese studio behind Axie Infinity, a cryptocurrency-based online game—and then watched as a massive hack drained hundreds of millions of dollars from the game's systems. Their investment in Yuga Labs, the company behind the Bored Ape Yacht Club NFT collection, attracted scrutiny from the Securities and Exchange Commission over concerns that sales of digital assets might have violated securities laws.

Their involvement in Kickstarter's attempted pivot to blockchain technology damaged the crowdfunding platform's reputation and alienated much of its user base. The $350 million investment in Flow, Adam Neumann's post-WeWork real estate venture, drew criticism given Neumann's troubled history at his previous company.

Perhaps most significantly, the firm committed $400 million in equity to Elon Musk's acquisition of Twitter. By September 2024, according to The Washington Post, that investment had lost $288 million in value. The calculus may have shifted when Musk's artificial intelligence company xAI acquired Twitter in April 2025 for $45 billion including debt—though by then a16z had also invested directly in xAI itself.

American Dynamism

In 2023, a16z launched something that marked a new direction for the firm: a $600 million fund called "American Dynamism," focused on backing companies that build "in the national interest."

The sectors this fund targets are notably different from typical Silicon Valley fare: space, defense, manufacturing, robotics. These are industries that require building physical things in the real world, often with long development timelines and complex relationships with government customers. They are also industries that, for various reasons, venture capitalists largely ignored for decades.

The fund has backed companies like Hadrian, which manufactures precision parts for aerospace and defense applications, and Castelion, which is developing hypersonic weapons—rockets that can travel at five times the speed of sound or faster. These are companies that would have seemed deeply unusual in a venture portfolio even a decade ago.

Katherine Boyle, one of the three general partners managing the fund, has become the most prominent voice for this initiative. In an essay titled "Building American Dynamism," she argued that technological development in service of national interests represents the path out of what she sees as a period of American stagnation. Her background includes time at Founders Fund, the venture firm co-founded by Peter Thiel, whose libertarian and nationalist-inflected thinking has influenced a significant strain of Silicon Valley ideology.

The American Dynamism fund hosts an annual summit that brings together startup founders, investors, members of Congress, and Defense Department officials. The event presents itself as nonpartisan—it has partnered with Democratic defense officials like Kathleen Hicks, who served as Deputy Secretary of Defense under President Biden. But the fund's very premise—that private venture capital should play a significant role in developing military technology—represents a political position that not everyone shares.

Evolution and Transformation

In 2019, a16z took a step that signaled just how far it had evolved from a traditional venture firm: it registered as a registered investment adviser, a regulatory status that gave it much more freedom to pursue non-traditional investments.

Traditional venture capital firms face restrictions on what they can invest in—primarily equity stakes in private companies. By becoming a registered investment adviser, a16z could invest in public stocks, cryptocurrency tokens, and other assets that would be off-limits to a conventional venture fund. The trade-off was accepting more regulatory oversight, but the flexibility was worth it.

This transformation reflects a broader shift in what venture capital has become. As one observer noted in Fast Company, firms like Andreessen Horowitz no longer act like traditional venture capitalists. They invest across the full spectrum of assets, compete aggressively for the most obvious opportunities rather than seeking out contrarian bets, and operate more like diversified investment firms than like the small partnerships that once defined the industry.

The numbers tell the story of this evolution. The firm launched in 2009 with $300 million. By the end of 2010, they were managing $1.2 billion across two funds. The growth accelerated from there: $4 billion by 2014, $42 billion by 2024, $46 billion by July 2025. At that scale, a16z is not just participating in the venture capital industry—it is reshaping what venture capital means.

The Roster of Bets

The firm's portfolio, which now lists over a thousand companies, reads like a catalog of the technology industry's aspirations over the past fifteen years.

Social platforms: Facebook, Twitter, Foursquare, Clubhouse. Financial technology: Stripe, Coinbase, Ripple. Enterprise software: GitHub, Okta, Databricks, PagerDuty. Consumer applications: Airbnb, Lyft, Roblox. Healthcare: Forward Networks, Pearl Health. Gaming: Roblox, Axie Infinity. Creative tools: Figma, Medium. Hardware: Jawbone, Oculus VR, Lytro.

Some of these names became household words. Others flamed out spectacularly. A few, like Jawbone, represent billions of dollars in investment that ultimately produced nothing. But the overall record has been extraordinary enough to justify the firm's position at the top of the industry.

The firm's calculation, since 2020, backs up its dominance: according to one analysis, a16z has backed thirty-two unicorns—startups valued at over one billion dollars—more than any other venture firm during that period.

Influence Beyond Money

What makes a16z unusual is not just the scale of its investments but the extent of its cultural and political influence.

Marc Andreessen in particular has become one of the most prominent—and controversial—voices in technology. His essay "Why Software Is Eating the World," published in 2011, provided an intellectual framework that shaped how a generation of entrepreneurs thought about the disruptive potential of technology. More recently, his political visibility has increased dramatically, making him a figure who commands attention not just in Silicon Valley but in Washington as well.

The firm's approach to portfolio support means that a16z's influence extends through hundreds of companies. When the firm helps a startup hire executives, craft its messaging, or navigate government relationships, it is not just providing services—it is embedding its perspective into the fabric of the technology industry.

Critics argue that this concentrated influence is problematic, that one firm should not have so much power over which companies get funded, which ideas get promoted, and which visions of the technological future get built. Supporters counter that a16z's success reflects genuine insight into what the future might look like, and that its aggressive investment approach has helped bring transformative technologies to market faster than they would have emerged otherwise.

The Logic of Scale

There is something almost paradoxical about a venture capital firm growing to the scale that a16z has reached.

The traditional argument for venture capital is that small, nimble investors can spot opportunities that larger institutions miss. A pension fund managing hundreds of billions of dollars cannot meaningfully invest in a startup with five employees—the check would be too small to matter to the fund, and the due diligence cost wouldn't be worth it. Venture capital exists precisely because it operates at a scale where such investments make sense.

But at forty-six billion dollars, a16z is no longer small or nimble in the traditional sense. It can still write seed checks of a few million dollars, but it also writes checks of hundreds of millions of dollars into later-stage companies. It operates across more sectors than most venture firms have ever contemplated. It employs specialists in fields that most venture firms have never hired for.

This evolution may reflect a broader truth about how the technology industry has changed. The opportunities have gotten bigger. The companies have gotten more complex. The capital requirements have increased. And perhaps—though this is more speculative—the insight required to identify transformative opportunities has become a capability that scales better than the traditional venture model assumed.

Or perhaps a16z has simply been lucky enough to catch several waves of technological change at the right moments, and its current scale reflects that historical good fortune rather than any systematic advantage.

What Comes Next

As of late 2025, a16z continues to expand its reach. The firm has added partners like Raghu Raghuram, the former CEO of VMware, one of the most important enterprise software companies of the past two decades. It continues to raise funds across its various focus areas. It continues to make bets on the future—some of which will fail, some of which will succeed modestly, and some of which might define the next era of technology.

The firm's American Dynamism initiative suggests one possible direction: deeper engagement with the physical world, with government, and with industries that have historically been distant from Silicon Valley's interests. The continued expansion of its cryptocurrency investments suggests another: a conviction that blockchain technology will eventually transform finance, property rights, and digital identity in ways that have not yet fully materialized.

Whatever happens, a16z has already changed venture capital permanently. The full-service model it pioneered is now widely imitated. The scale at which it operates has pushed other firms to raise larger funds. The sectors it has entered—cryptocurrency, defense technology, media—have reshaped what venture capitalists think of as legitimate territory for investment.

Whether this transformation is good for the technology industry, or for society more broadly, remains an open question. But the transformation itself is undeniable. The small club of genteel investors who once defined venture capital has given way to something larger, more aggressive, and more consequential. And at the center of that change stands the firm that Marc Andreessen and Ben Horowitz launched in 2009 with three hundred million dollars and a conviction that they could build something different.