a16z's Chris Dixon Might be the Best Web 3.0 Investor of His Generation
Chris Dixon may also be my crypto idol.
Chris Dixon has topped the Forbes “Midas List” as the most successful venture capital investor in 2022. a16z has invested in crypto and the creator-economy well before others did, and is starting to see the rewards of doing so.
So in an era of crypto boom and bust cycles how special is this?
Andreessen Horowitz general partner Chris Dixon has topped the Forbes “Midas List” of the world’s best venture capital investors in 2022.
Seldom does a crypto or Web3 funding round finalize without a16z being involved somehow.
According to a Tuesday report, Dixon turned the $350 million Crypto Fund I into realized and unrealized gains of $6 billion in 2021. That equates to an eye-watering 17.7x gain, according to “sources with knowledge of the fund’s financials.”
There is a lot of money, attention, and energy — both literal and metaphorical — in crypto and literally don’t know if Web 3.0 and the Metaverse will be a bust or is literally the future of the internet.
I remember of course when Chris Dixon was hyped as a crypto visionary on Medium, all those years ago. a16z knows how to pump up its sector with PR and hype. Now it seems Chris Dixson is the Crown Prince of the Web 3.0 investing circles even on a “Midas” list?
The Brave New World of a Dystopian Elite
What a brave new world indeed. A world where the majority of crypto is owned by Billionaires, Venture Capitalists, and the financially elite who won’t even let the sector get “regulated” that won’t be in their favor. Even Silicon Valley Tycoons like Jack Dorsey and Elon Musk now call crypto among their playgrounds.
Square calling itself Block, was nearly as bad as Facebook pretending it’s Meta.
So here we are in 2022, Bitcoin is worth $40,000 and the people who could afford to gamble on it and its ecosystem are surprisingly richer. Ah, not so surprising.
Jack Dorsey may not want to give him props. But @cdixon and a16z's $350M first crypto fund closed 2021 up 17.7x, a source tells @Forbes.
Should we be congratulating crypto for creating yet another wealth Pyramid tied to white men in Venture Capital suits? Is this what we are actually celebrating?
Chris Dixon transformed $350 Million Crypto Fund I into the land of milk and honey equalling $6 Billion previous year. It equates to a mouth watering 17.7x gains as per the sources with information of financials of the fund.
The worshiping of idols is what Bitcoin wanted us to evolve past, but it seems the distributed ledger tech is also just creating the same old winners. When Bitcoin is itself an idol, its prophets are the wealthiest.
Watching the hype around NFTs has been most disturbing, if you actually care about the democratization of finance. Going from ICO fraud to NFT scams has been for crypto’s reputation going from bad to worse.
Venture Capitalism Pawned The Web 3.0 Movement
Venture Capitalists don’t actually care about the tenets of decentralization of the spirit of the youth enamored by Crypto and the HODL movement.
Chris Dixon is a general partner and has been at Andreessen Horowitz since 2012. He founded and leads a16z Crypto, which invests in web3 technologies through three dedicated funds with more than $3 billion under management. A lot of money was pumped into his brand in the early days. Chris Dixon has 144,000 followers on Medium. Nearly 1 million followers on Twitter. These days a16z feels like a media company and does much of their PR and content in-house.
With wealth, comes incredibly responsibility, after all. Like controlling the narrative for profit. The Bitcoin Overlords are laughing a bit like the Fed, QE was the ultimate bump to Bitcoin and all the backroom favors.
Should we be praising the best investors in Crypto like the Forbes article is doing, or is this just what news has come to, a vague disguise for blatant PR? Should we be congratulating Chris for good work? There is clearly a guilty conscience behind this face.
By comparison, the overall cryptocurrency market itself only managed a 200% gain from $780 billion on January 1, 2021, to $2.3 trillion by the end of December 2021. Chris Dixon beat the market, he actually destroyed it. But who cares, Venture Capitals are the Tycoons in Silicon Valley’s model of capitalism. America will get what it paid for.
The Crypto Ponzi Scheme that Fooled a Generation
For years I remember reading the crypto ideology and jargon on Medium. Now that it’s come to pass in such an unequal distribution of wealth, I have to wonder if the entire movement was an elaborate fraud. Jack and Elon’s behavior around the space lead me to that conclusion. Even Chris is just a pawn in this game.
In markets like crypto and the Creator-Economy let’s just admit it there’s a pyramid like structure and a ponzi scheme factor that if you get in early enough and the thing blows up, you have a lot to gain. Think about it, A16z got into crypto early, leading a $25 million funding round into Coinbase in 2013. By the time Coinbase went public in April 2021, the firm had held a 15% stake following 14 more funding rounds. The shares were worth $10 billion on the first day of trading, resulting in a 60x return for the company.
If you knew Bitcoin could be manipulated and you knew the FOMO could be instilled in young people, you know the ponzi scheme would explode. The Silicon Valley elites had their way with us, no matter what “cryptocurrency” we preferred, it didn’t really matter in the end. If the network effect is considerable, when Billionaires conspire together what do suppose occurs? Things like Tesla stock valuation, Bitcoin and the fear of missing out at scale.
Generational warfare exists, and people like Chris Dixon are just their appointed missionaries. All things in history really do repeat. Now the Bitcoin religion lives, and it drives the profit of a few. There’s no other reasonable way to look at it.
Should I dare to even be talking about this though? A16z is the main owner of Substack. Do I dare talk about China? Well if Substack remains censorship-resistant I might. This is the problem with the internet Silicon Valley has created, I’m not rich or free, thus I become disgruntled. And, it’s not just me.
It’s not as if a16z didn’t pick the winners. There have been other notable investments by a16z including decentralized exchange Uniswap, the Avalanche blockchain, nonfungible token (NFT) creator Dapper Labs and Ethereum staking platform Lido, all of which have surged in valuation or collateral since.
The mythology around Chris Dixon makes it seem like he’s a genius. Unless of course Crypto and the Creator-Economy really is the future of the Metaverse. I can make that argument too. With the destruction of Meta, something has to take its place after all. Just get TikTok banned and ByteDance and China sanctioned, how difficult could it be?
It’s possible Elon wants Twitter for its possession of the mindshare around the future of the Web 3.0. Chris Dixon leads crypto investing at the storied Silicon Valley venture capital firm Andreessen Horowitz, or a16z.
The a16z Crypto Mafia is Born
He’s responsible for leading funding rounds for Coinbase, which went public about a year ago, the NFT marketplace OpenSea, and Yuga Labs, which is behind the Bored Ape Yacht Club, among others. He is also a prolific user of Twitter, where he posts lengthy threads about crypto and web3.
So how are part of this a16z crypto mafia?
Coinbase
OpenSea
Avalanche
Yuga Labs
You can see a16z’s crypto investments here: https://a16z.com/crypto/
Chris Dixon assures us that :historically, new models of computing have tended to emerge every 10–15 years: mainframes in the 60s, PCs in the late 70s, the internet in the early 90s, and smartphones in the late 2000s.” I suppose a16z just happend to tap into this with good research and timing. Remember the “Software is Eating the World” post, that’s Chris Dixon.
Today wealth inequality is spiraling out of control in America thanks to Silicon Valley venture capitalists. The younger generations knows they are heading for a Dystopia. Does greed matter too Chris Dixon? Does your heart feel clean and your conscience clear?
Journalist Alex Konrad said that a16z “plans to roll back its crypto fund into the firm — making crypto core to its main funds, akin to cloud or the internet.” What a big surprise? With its own a16z Mafia in place, let’s just make our friends richer. Isn’t that how the story goes in pyramid schemes in America’s wealth games?
As an amateur journalist I can tell you that if a story has too much positivity it’s not journalism, it’s PR. This of course what has occurred since the advent of Crypto. You juice public opinion and benefit from their new behaviors. The sad part is a lot of young people do not know better, they have bought into the FOMO and YOLO narrative. They just want a piece of the bills people like Chris Dixon are throwing down from their dystopian high-rises.
Unfortunately for us, very little real innovation is occurring here in this particular pyramid scheme around Bitcoin.
Concerns have been raised by some crypto industry observers that too much venture capital involvement and investment in a project may erode its decentralization. A16z’s holdings of the UNI tokens and sway in governance votes for has been a particular issue. But, either way, the crypto industry’s most prominent VC firm is still hunting for new investment opportunities in the sector. The truth is, nobody believes real decentralization exists any longer in the 2020s.
Interview with Chris Dixon Mid 2022
We can portray Chris Dixon and a16z like heroes and godfathers, but a lot of what is occurring here is a sham. Coinbase is not the next Apple. Ethereum is not the next Microsoft, get a grip.
Decoder on Verge recently interviewed Chris Dixon. You can also read the transcript here.
Here are some takeaways:
a16z’s crypto Web3 team is now at about 60 people.
Out of those 60 people, about 15 are on the investment team.
They have a team that helps if we are working on cutting edge problems, and we have a marketing communications team.
Venture capital in its modern form began probably 40 to 50 years ago, and it is often called the Yale Model.
If you invest in a venture-backed startup you may not see your money for 10 or 15 years, so you have to have a really long time horizon.
I believe it is very important to have individual decision-makers who are closest to the topic and know it the best, not have decisions by committee.
I like how venture works; to me, it is like a startup. It’s very simple. You give us money and I won’t take anything until I have fully paid back every dollar I took, then on the profits, you take something.
Basically, we have that pool of money I just described and split it up across the team. All 62 people on our team get some percentage of that, which varies by seniority and things like that.
The first, what we call Web1, I think of as roughly 1990 to 2005.
Web2 I think of as roughly 2005 to 2020.
When I first saw Bitcoin, I was less interested in the financial aspects of it, but thought architecturally it was a really interesting way to build something.
In my mind, if Web3 works right — if we can do it the right way — it is the best of both worlds of Web1 and Web2.
Something that we are investing in now — and a lot of entrepreneurs are working on — are protocols similar to SMTP. Instead of just supporting email use cases, they would also support Twitter use cases or Discord use cases. They are protocols that let you build services in the same way as SMTP. It is an open protocol and no one controls it.
Creator Economy
Think of it like Substack right now; a lot of people will build their audience on Twitter, but then they will monetize on Substack. I think it has been great for creative people.
Kevin Kelly has a famous blog post from around 2002 where he mentions this great thing about the internet. For people like me, who were around for the first year of the internet, this was always the dream.
You could now have someone who is into some kind of niche activity that most of the world does not love, but there are 1,000 people that really love it and are willing to patronize, buy books, and visit when there’s a talk.
Interview continues:
They are very extractive — Facebook is well-known for this — and they will deliberately let you build a big organic reach, then change the algorithm to lower your reach and make you pay to get back there. They are incredibly sophisticated money extraction machines. This is why they are so profitable and so successful.
The interview is vaguely interesting about the differences between Web 2.0 and Web 3.0. It sounds more like a script that organic opinions however well trained Chris is in sharing these preplanned ideas.
If I was to believe this interview, I’d think that NFTs are the key to Creators getting more of their cut in the process. I will refrain on having an opinion on that today.
If you want to support me so I can keep writing, please don’t hesitate to give me tips, a paid subscription or some donation. With a conversion rate of less than two percent, this Newsletter exists mostly by the grace of my goodwill (passion for technology and Web 3 decentralization) & a relative state of poverty as I pivot into the Creator Economy myself.
Sorry I’m not only pumping crypto, I must be neuro-divergent with a bias to critical thinking somehow.
Anyways I hope you enjoyed the topic, that’s all for today.