Andreessen Horowitz Shifts Business Model From VC To RIA

Andreessen Horowitz has revealed that it is transitioning from being a venture capital (VC) firm to a registered investment advisor (RIA).

The firm filed last month to become an RIA so that it can have more flexibility in its investments, particularly in the area of cryptocurrencies, said Margit Wennmachers, an operating partner at the firm, according to CNBC.

While VC firms have limitations when it comes to investing outside of traditional startups, transitioning into an RIA will allow Andreessen Horowitz to put more money into areas like crypto.

“As a firm, we have this massive ambition to be the best investor, period — and want the flexibility to invest in what we think is the best investment,” Wennmachers said, adding that the change should become official this month after the 45-day processing period for the U.S. Securities and Exchange Commission.

Last year Andreessen Horowitz became the first venture capital firm to raise a large fund focused on cryptocurrencies, worth $300 million.

“Our fund is designed to include the best features of traditional venture capital, updated to the modern crypto world,” wrote General Partner Chris Dixon at the time, who added that the company has been investing in crypto assets for more than five years. “We’ve never sold any of those investments and don’t plan to any time soon. We structured the a16z crypto fund to be able to hold investments for 10+ years.”

The change to an RIA means employees will have to go through background checks and register their investment holdings. In addition, there will be more restrictions placed on what they can trade individually, as well as how they discuss financial performance.

Wennmachers added that Andreessen will still raise dedicated crypto funds as well as bio funds, while the firm’s main fund will continue to focus on consumer and enterprise technologies.