The Andreessen Horowitz partner is the new no. 1 on Forbes’ 21st annual Midas List of top venture investors, thanks to savvy bets on tokens, NFTs and cryptocurrency exchange Coinbase. In fact, a dozen members of this year’s Midas List count Coinbase as one of their banner investments, third most of any company. For the rest of the Midas top 100, bios, analysis and more, please visit forbes.com/midas.
IN 2013, serial entrepreneur turned venture capitalist Chris Dixon was searching for the next big thing. The 1980s had personal computers, the 1990s the Internet and the 2000s mobile phones. A newly minted partner at VC firm Andreessen Horowitz, Dixon started chasing “moonshots” – virtual reality, 3D printing, drones.
But it was an early bet on Coinbase, the cryptocurrency exchange, that has defined Dixon’s career. His firm led a $25 million funding round into Coinbase in 2013. By the time Coinbase went public via direct listing in April 2021, Andreessen Horowitz had amassed a position of nearly 30 million shares (a 15% stake) across 14 more rounds. Those shares were worth about $10 billion – good for an approximately 60x return – at the end of Coinbase’s first day of trading. (The firm has since sold some shares, which now trade at about half that price.)
Coinbase is just the crown jewel in a portfolio that has made 50-year-old Dixon the new No. 1 on our annual Midas List of tech’s top dealmakers. Other big Dixon deals : Uniswap, a decentralized crypto exchange ($10 billion fully diluted valuation, which accounts for coins not yet in circulation), Avalanche, an open-source blockchain ($62 billion) and NBA Top Shot creator Dapper Labs ($7.6 billion).
Now splitting time between New York and California, Dixon is one of crypto’s elder statesmen – and deepest pockets. Thanks to the success of his debut crypto fund within a16z, as the firm is popularly known (for the number of letters between the “a” in Andreessen and the “z” in Horowitz), Dixon and team finished 2021 having turned $350 million into realized and unrealized gains of $6 billion, an eye-popping 17.7x multiple, a source with knowledge of the fund’s financials says.
Dixon and co. are already out in the market raising new funds, sources tell Forbes, in what will reportedly be crypto’s largest venture fund ever at $4.5 billion. Andreessen Horowitz declined to comment on its performance or fundraising.
“By any measure, he’s the top crypto investor,” says General Catalyst managing director Hemant Taneja, Midas List. No. 23, who backed Dixon’s first startup nineteen years ago. Dixon’s colleague and firm cofounder Ben Horowitz (Midas No. 87) goes further: “I think 10 years from now, everybody’s going to consider him the greatest investor of his generation.”
Speaking to Forbes in a rare interview, Dixon downplays his own Midas touch. “My job is not to predict the future,” he says. “My job is to be smart enough to know who the smart people are who will.”
Continental Catch-up
Five newcomers from Europe, Israel and elsewhere in the Middle East debut on this year’s Midas list, bringing the total top VCs from those regions to a record 12, 50% more than last year. They include London’s Reshma Sohoni, one of 11 women in the ranks. The Seedcamp cofounder and managing partner was an early backer of Romanian-founded robotic process automation company UiPath, which went public at a $28 billion valuation in April 2021.
The son of two Wittenberg University English professors, Dixon grew up in Ohio, where he taught himself to code, then instructed others at computer summer camps. Interest in cognitive science and logic drove Dixon to pursue bachelor and master’s degrees in philosophy at Columbia University in the early 1990s. Raised to question capitalist enterprises, Dixon defied his parents by soon taking a job as a developer at a hedge fund because it paid the best. About three years later, he went to Harvard to get his MBA, and worked briefly at venture capital firm Bessemer Venture Partners before quitting to cofound his own company SiteAdvisor, which warned of viruses and malware. Within a year, security giant McAfee gobbled up the business, pre-revenue.
Next, Dixon cofounded an early recommendation engine called Hunch. Like SiteAdvisor, it was acquired – this time by eBay – for about $75 million in 2011. Burned out from building and selling two companies, Dixon had a choice to make: remain a solo investor, lean into a career blogging and podcasting, or become a proper VC.
While building Hunch, Dixon had begun investing personally in other startups in New York’s then-tiny tech scene, some of which borrowed extra desks at Hunch’s offices. Dixon’s more than 50 personal investments included crowdfunding platform Kickstarter (2009), social sharing site Pinterest (2011), and online payments business Stripe (2012). He’d also helped launch a seed-stage fund, Founder Collective, where he invested with several other successful entrepreneurs turned angel investors, including Midas List investors David Frankel (No. 11) and Bill Trenchard (No. 86), and former Midas List investor Eric Paley.
But in tech’s mecca of Silicon Valley, Dixon was still predominantly known for the personal blog he launched in 2009, where he shared tactical startup advice, personal musings and thoughts on Big Tech. Highlights of the still-active site include a 2011 warning to the entertainment industry about Apple TV and a decade-early defense of non-fungible tokens (NFTs).
While Dixon publicly tipped New York’s tech scene to eventually take off, investing so far from California felt like being on the sidelines. Luckily for Dixon, the founders of venture capital’s noisiest would-be disruptor, Marc Andreessen and Horowitz, were avid readers of Dixon’s blog and invited him to join them out west. “This is how I can make my mark,” Dixon remembers thinking. “I can go find the next thing, and be in the middle of it.”
Frontier or “moonshot” investing, as Dixon called it, led him to invest in Oculus, the virtual reality startup acquired by Facebook, drone company Skydio and crypto company Ripple. Through an investment in Bitcoin mining startup 21.co, founded by former a16z partner Balaji Srinivasan, Dixon got another crack at backing one of his readers, Coinbase cofounder and CEO Brian Armstrong, after he’d previously passed. The three talked for four hours in 2013, Armstrong says, and found common ground on regulatory compliance for cryptocurrencies. Dixon led Coinbase’s Series B that December, joining a cap table that included Midas List investors Garry Tan (No. 28) and Fred Wilson (No. 73).
Over the next few years, Andreessen Horowitz was the only firm to re-up in every single funding round, including one “down round” raised at a lower valuation, Armstrong told Forbes in an email. Dixon proved helpful with everything from securing board members and banking partners to advocating for Coinbase to add support for the trading of Ethereum and other non-Bitcoin assets. “I can confidently say that a16z was Coinbase’s most impactful investor,” Armstrong says. “Chris has a unique ability to see around corners, especially when it comes to technology and what to build next.”
EXCHANGE VALUE
A dozen investors on this year’s Midas List count cryptocurrency exchange Coinbase as one of their banner investments, third most of any company. The group ranges from early-stage specialists Fred Wilson and Garry Tan to growth experts David George and Matthew Witheiler. Andreessen Horowitz’s Chris Dixon leads the field not just for being early but for his conviction in investing in each of 15 total funding rounds.
When Dixon committed to crypto investing full-time with a16z’s debut fund in 2018, it planted one of the first high-profile flags in the emerging space. Now, Dixon and co. face increasingly hefty competition, both from generalist VC firms allocating more resources to crypto investing, as well as from specialist rivals such as Paradigm, cofounded by Coinbase’s other founder Fred Ehrsam.
But Dixon’s devotion to the gospel of crypto, and willingness to stick to it during down times, still carries unique weight. At Uniswap, the popular decentralized exchange Dixon backed during the Series A (one round later than Paradigm), CEO Hayden Adams says Dixon’s ability to bridge the worlds of traditional tech and finance with crypto proved crucial in hiring a COO away from Black Rock and snagging a vice president of engineering away from Snap.
Roham Gharegozlou, the CEO at Dapper Labs, credits Dixon with predicting the rise of NFTs. His company created one of the first digital collectibles on the Ethereum blockchain, CryptoKitties, at which time Dixon snagged Kitty No. 15. “Chris saw this whole industry before it began,” Gharegozlou says.
Such credentials are priceless in an industry that values early adoption and strong conviction above much else. They also mean that Dixon, if he so desired, could strike out on his own and easily raise billions for a firm in his own name. (Former partner Katie Haun recently departed the firm to do just that with Haun Ventures, raising a $1.5 billion solo general partner fund.) For now, Dixon, his colleagues and friends all insist he has no interest in hanging his own shingle.
“I’m just not motivated by the name on the door thing,” Dixon says. “This is to me potentially the golden period [of crypto] for the next three years. So I don’t really want to spend the next two years doing all the setup, and recruiting a team, and other kinds of things like that.”
Instead, multiple sources tell Forbes, Dixon and a16z have been telling investors they plan to eventually fold a16z crypto back into the firm’s central funds. The move would be significant, reflecting a wider buy-in into Web3 across the firm, the sources say, with crypto too strategic (and ubiquitous) to remain siloed with one fund. An Andreessen Horowitz spokesperson declined to comment.
Crypto’s broader move into the mainstream is something Dixon is grappling with himself. Last September, a thread Dixon published on Twitter detailing “why Web3 matters” went viral. By December, his advocacy for Web3’s promise of a decentralized internet with more direct user ownership, which he argued is currently lacking among “Web2” internet companies such as Facebook or Twitter, put him in the sights of Twitter cofounder Jack Dorsey, no longer its CEO but a master of its trolling format. “You’re a fund determined to be a media empire that can’t be ignored…not Gandhi,” Dorsey tweeted, arguing that Web3 would still be owned, but this time by VCs.
The spat ended with Andreessen blocking his fellow billionaire on Twitter; Dixon didn’t, but blocked others. Dixon says now he “probably overreacted,” invoking the popular Twitter meme that the game of Twitter is not to be its main character for the day, and in that instance, he lost. Dixon takes such attacks personally, colleagues say, on behalf of entrepreneurs without the clout to stand up to such online personalities. “I think he can come off a bit gruff or curmudgeonly sometimes, but it’s really coming from the best place,” says a16z crypto partner Arianna Simpson.
Dixon now provides a more measured take to Dorsey and any other tech leaders who question the decentralizing potential of Web3. “My response would be, ‘hey, great, come join us and help us figure out those problems,’” Dixon says. “As opposed to sort of throwing grenades from the sidelines, which is what I feel happens.”
It’s difficult for the world’s top-ranked investor to cry underdog, but Dixon insists that when people claim crypto is “just tech bros getting rich gambling,” the category and its potential are misunderstood. Far from retreat from public chatter, Dixon plans to spend more time this year in Los Angeles, meeting with entertainment industry tastemakers and creators, to evangelize Web3’s potential for more direct ownership over content, he says, then bring musicians and others to Washington, D.C., to help win over policymakers.
Such wider acceptance of crypto would, of course, only boost the value of Dixon’s considerable investment portfolio. But he insists simply driving Midas-caliber returns isn’t the only goal. “We’re a venture firm, I’m not trying to pretend like we’re not,” Dixon says. “But I would say I’m motivated because I think [Web3] is a really important movement, and I want to have impact on it. I deeply believe in it.”
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Source: https://www.forbes.com/sites/alexkonrad/2022/04/11/midas-list-chris-dixon-crypto-capitalist/