In a year in which venture fundraising was dominated by a small number of large firms, a16z raised more than the next two funds - Lightspeed ( \$9B ) and Founders Fund ( \$5.6B ) - raised in 2025, combined.
In 2012, VC investments returned an average of 8.9% to the S&P 500’s 20.6% per Cambridge Associates. Legendary venture capitalist Bill Draper said, “The growing consensus about venture capital in Silicon Valley is that too many funds are chasing too few truly great companies.” Which certainly rhymes with today.
That’s why you should be starting companies, not funds.
Databricks represents 23% of a16z’s Net Asset Value (NAV) across all funds.
Talk about concentration …
Ali Ghodsi and his family fled Iran in 1984 during the Iranian Revolution and moved to Sweden. His parents bought him a Commodore 64, which he used to teach himself how to code, well enough, in fact, to get invited to UC Berkeley as a visiting scholar.
What are the tools that parents are buying their children now that are Comodore 64 equivalents?
This initial encounter -Databricks -Databricks asking for $200k, a16z going much, much bigger - set a pattern. When a16z invests in you, they believe in you. When I asked him about a16z’s impact, Ali was unequivocal: “I don’t think Databricks would be around today if it wasn’t for a16z. And Ben specifically. I don’t think we would be around. They truly believed in us.”
They invested $10M.
a16z makes and sells power. It builds its own power through scale, culture, network, organizational infrastructure, and success, and then gives its power to the technology startups in its portfolio through sales, marketing, hiring, and government relations, primarily, although to hear its founders tell it, a16z will do whatever is in its power to do, which seems to be a lot.
“Ten years ago, there were only approximately 50 million consumers on the Internet, and relatively few had broadband connections,” Ben and Marc wrote in the Offering Memorandum for Andreessen Horowitz Fund I in April 2009. “Today, approximately 1.5 billion people are online, and many of them have broadband connections. As a result, the biggest winners on both the consumer and infrastructure sides of the industry have the potential to be far larger than the most successful technology companies of the previous generation.” At the same time, it had gotten much cheaper and easier to start a company, which meant that there would be more of them. “The cost of creating a new technology product and entering the market in at least a beta phase has dropped dramatically over the past ten years,” they wrote to potential LPs, “and now is often only $500,000-$1.5 million, as compared to $5-15 million 10+ years ago.”
One major tl;dr from the article is to choose market well. From The only thing that matters: “I’ll assert that market is the most important factor in a startup’s success or failure.”
To win the next 100 years of technology (which, at a16z, is the same thing as winning the next 100 years, period), he continues, it must win the key new architectures - AI and crypto - and then apply these technologies to the most important areas, like Biology, Defense, Health, Public Safety, and Education, and infuse them into the government itself.
You could say that yes, maybe we take a few hits on Twitter because a company that people don’t like in a certain pocket of San Francisco or in New York or whatever don’t like it. Like, “We don’t like that they’re doing American Dynamism! We don’t like that they’re doing crypto!” But the actual scale of the machine means that that little tiny blip in a moment just does not matter. The best in class institutional comps are scaled systems. Something like the United States of America. Do we care when the United States of America does something embarrassing on a global stage? No, it doesn’t affect the United States of America, like it doesn’t affect the Holy Roman Catholic Church. We’re thinking in centuries, not in tweets.
This is Katherine Boyle who sounds like someone to track.
“In earlier days,” Ben said, “venture capitalists helped companies achieve $100,000,000 in revenue and then hand them over to investment banks for the next portion of their journey as a public company.” That world no longer exists. Companies are staying private much longer and at much larger scale, which means that the venture capital industry, led by a16z, needs to expand its capabilities to meet the needs of much larger companies.
Another tl;dr is that a16z is not just a VC anymore, they have an ambition to reach the scale of a major bank.
“They’re very loyal investors,” Alex said. “Every time there was a secondary happening or investor selling, a16z bought all the stock it could.
Overall this post has me have more appreciation for the company’s leadership. They have controversial opinions and approaches, but these are not erratic or dogmatic, rather seem fairly thoughtfully pointed in the direction of technological progress.