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Welcome back to Chain Reaction, a podcast that interviews newsmakers in crypto to better understand the tech behind the hype and the people working to build a decentralized future.
Prior to joining a16z, Arianna founded Autonomous Partners, an investment fund focused on crypto. She also helped launch Crystal Towers Capital, an early-stage fund investing primarily in YC companies.
A16z has dug deep into the crypto space after launching four funds dedicated to the industry. The most recent one closed at $4.5 billion in May 2022, and Arianna thinks it’s appropriate, given the size of the opportunity.
“I certainly think the ecosystem has grown to a size where it absolutely 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 is continuing to attract tons of early-stage entrepreneurs who are building across the board.”
When 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 big crypto players we’ve interviewed in the past, like Alchemy, Avalanche and Aptos.
Over the years, there’s 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 founders and whether she would launch another VC firm in the future.
We also discussed:
- The current investing climate
- The web3 gaming space
- Where founders are building
- The regulatory landscape
- Advice for founders