"First off, it's worth noting that all of these firms are legally not venture capital firms-they are registered investment advisers (RIAs). This means they can, and do, invest beyond early-stage private companies, in things like public companies, crypto tokens, nontraditional assets, and more. Andreessen, Sequoia, Insight, General Catalyst, Thrive Capital, SoftBank Vision Fund, Lightspeed . . . all RIAs. All massive. No longer "just" VC funds."
"Since its earliest iterations in the 1940s, venture capital has always meant investing in early-stage companies with the potential to generate alpha-high risk, high reward, uncorrelated with efficient (public) markets. It's never been about investing in the obvious. Quite the opposite, in fact. That's not how big funds invest anymore. Andreessen partner Martin Casado's viral tweet last week acknowledged this: Large funds are not picking contrarian bets. They're picking consensus ones."
Andreessen Horowitz and other large firms operate as registered investment advisers rather than traditional venture capital funds and deploy capital across a wide range of assets. These firms invest in public companies, crypto tokens, nontraditional assets, and more, extending beyond early-stage private companies. Historical venture capital focused on contrarian, high-risk early-stage investments aimed at generating uncorrelated alpha. Large funds now pursue consensus bets, chasing the same founders and outbidding one another in giant rounds. That competitive behavior erodes alpha and reflects big finance operating from a Sand Hill Road address, with limited partners accepting the tradeoffs.
Read at Fast Company
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