a16z Insider's In-Depth Analysis: The Story Behind Successfully Raising $15 Billion

Author: Packy McCormick (Founder of Not Boring, former a16z Crypto advisor)

Compiled by: Jiahua, ChainCatcher

Today (January 9), a16z announced that it has raised $15 billion in new funding.

To commemorate this moment, I wrote an in-depth analysis of the company. I spoke with the firm's general partners, limited partners, and founders of portfolio companies valued at approximately $200 billion, reviewed some documents and presentations, and analyzed the return data of a16z's various funds since its inception.

There are many articles online discussing where a16z's methodology has gone wrong. You may be familiar with these narratives. They have shadowed the company since its founding.

I think it is much more interesting to understand what all these once-smart people who were right in the past think a16z is doing now.

To be frank, aside from a16z's official employees, I am probably the most "biased" observer you can find.

For over two years, I have been an advisor to a16z crypto (but I am currently not compensated by the firm). Marc Andreessen (co-founder of a16z) and Chris Dixon (head of a16z Crypto) are limited partners in Not Boring Capital. I occasionally appear on the same cap table as a16z. I am friends with many people at the firm and most of the new media team. I work with these people and like and respect them.

However, readers should not expect me to analyze whether a16z's current fundraising pitch is worth investing in. Mature institutional partners have already made their decisions and invested $15 billion. It may take a decade to know whether they made the right decision, and nothing I or any critic says can change that outcome, just as in the past.

What I hope to bring is a way of thinking about "what a16z really is" based on my unique experiences. I believe a16z is the best marketing company in venture capital. It can and indeed does tell a compelling story about itself. From my experience, I can tell you that its story is consistent with its actions. What a16z says to the public is the same as what it tells its internal training teams. Its current messaging is identical to what was in its first fundraising pitch. And you can judge its returns for yourself.

There are many great venture capital funds and investors, some of the best of which have recently become well-known. Their methods and successes are increasingly appreciated and understood.

But a16z is doing something different, bigger, and less… understated. It doesn't feel like what venture capital "should" look like, partly because I think a16z doesn't care whether it is doing "venture capital." It just wants to build the future and devour the world.

Let's get started.

"I live in the future, so the present is my past, and my existence is a gift." ------ Kanye West (American rap king, entrepreneur)

a16z has heard your feedback.

It’s said to be too noisy. It’s said that politically it should "shut up and just play (invest)." It’s said that you disagree with one or two recent investments. It’s said that quoting and retweeting the Pope's tweets is inappropriate. It’s said that such a massive fund size could never generate reasonable returns for LPs.

a16z has indeed listened. At this moment, it has been listening to you for nearly twenty years.

Just like in 2015, when Tad Friend (contributing writer for The New Yorker) had breakfast with Marc Andreessen while writing "The Pioneers of the Future." Friend had just heard from a competitor eager to voice an opinion— that a16z's fund size was too large, and its ownership stakes too small, that to achieve a 5-10x total return on the first four funds, their portfolio's total value would need to reach $240 billion to $480 billion.

"When I started checking this math with Andreessen," Friend wrote, "he made a jerking-off motion and said, 'Blah blah blah. We have all the economic models, we’re hunting elephants, we’re chasing big game!'"

I hope you keep that image in mind.

Today, a16z announced that all its strategies have raised $15 billion, bringing its total assets under management to over $90 billion.

This year, while VC fundraising has been dominated by a few large firms, the funds raised by a16z exceed the combined total of the next two funds, Lightspeed (which raised $9 billion) and Founders Fund (founded by Peter Thiel, which raised $5.6 billion) in 2025.

In the worst VC fundraising market in five years, a16z accounted for over 18% of all U.S. VC fundraising in 2025. This year, the average VC fund took 16 months to complete fundraising, while a16z took just over three months from start to finish.

Breaking it down, a16z has four dedicated funds, each of which, if taken separately and compared to other firms' total fundraising, would rank in the top 10 for 2025: Late-Stage Venture (LSV) V would rank 2nd, the 10th AI Infrastructure Fund (Fund X AI Infra) and the 10th AI Applications Fund (Fund X AI Apps) would tie for 7th, and the American Dynamism II Fund would rank 10th.

Some might say that this amount of money is simply too much for a venture fund to expect any excess returns. To this, I imagine a16z would collectively make a jerking-off motion and say, "Blah blah blah." It’s hunting elephants, chasing big game!

Today, across all its funds, a16z is an investor in 10 of the top 15 privately held companies by valuation: OpenAI, SpaceX, xAI, Databricks (a big data AI platform giant), Stripe (a global payment giant), Revolut (a UK fintech unicorn), Waymo (Google's self-driving unit), Wiz (a cloud security unicorn), SSI (a security intelligence company), and Anduril (a defense tech company).

Over the past decade, it has invested in 56 unicorns through its funds, more than any other firm.

Its AI portfolio encompasses 44% of the total value of all AI unicorns, also more than any other firm.

From 2009 to 2025, a16z led 31 rounds of early financing that ultimately grew into companies with a scale of $5 billion, 50% more than the next two competitors.

It has a comprehensive economic model. Now, it also has a brilliant track record.

The following chart shows the total portfolio value of the first four funds, which is the fund that the competitor VC said must reach $240-$480 billion to cross the threshold. Combined, a16z Funds 1-4 have a total enterprise value of $853 billion at the time of allocation or latest post-investment valuation.

And this is just the value at allocation. Just Facebook alone has since added over $1.5 trillion in market value!

This pattern keeps repeating: a16z has made a crazy bet on the future. Some "experts" say it’s foolish. Wait a few years. It turns out it wasn’t foolish!

a16z raised its first fund (Fund I) of $300 million after the global financial crisis in 2009, boasting its operational platform supporting founders. "We visited many VC friends, and many of them said this was a very foolish idea, we absolutely shouldn’t do it, others have tried before but failed," Ben Horowitz (co-founder of a16z) recalled. Today, almost every important VC has some form of platform team.

In 2009, when it deployed $65 million from that fund to acquire Skype from eBay for $2.7 billion alongside Silver Lake and other investors, "everyone said it was an impossible deal because of intellectual property risks." In a blog post less than two years after Microsoft acquired Skype for $8.5 billion, Ben recounted the skeptical voices at the time.

Marc and Ben raised $650 million for the second fund (Fund II) in September 2010 and began making large late-stage investments in companies like Facebook (investing $50 million at a $34 billion valuation), Groupon (investing $40 million at a $5 billion valuation), and Twitter (investing $48 million at a $4 billion valuation), betting that the IPO window would open. The Wall Street Journal reported in a classic article titled "The New Venture Capital Rookie Shocks Silicon Valley" that competitors were furious, believing that private equity transactions were simply not what venture capitalists should be doing. Matt Cohler (Benchmark partner, former Facebook executive) threw out the famous line: "Pork bellies and oil futures can make money, but that’s not what we do."

In November 2011, Groupon went public with an opening market cap of $17.8 billion. In May 2012, Facebook went public with a market cap of $104 billion. In November 2013, Twitter went public with a first-day closing market cap of $31 billion.

When Marc and Ben raised $1 billion for the third fund (Fund III) and $540 million for the parallel opportunity fund in January 2012, the criticism turned to a familiar topic: scale. a16z's funds accounted for 7.5% of all VC fundraising in the U.S. in 2012, while the VC industry was performing poorly. Legendary venture capitalist Bill Draper said, "The growing consensus in Silicon Valley about venture capital is that too much money is chasing too few top-tier companies." This certainly echoes today’s situation.

In 2016, The Wall Street Journal published an article that David Rosenthal (host of the Acquired podcast) called "obviously a hit piece planted by competitors," titled "a16z's Returns Lag Behind VC Elite," at the time its funds had been established for seven, six, and four years, respectively. The article showed that while Fund I was in the top 5% of VC funds, Fund II was only in the top 25%, and Fund III was actually slightly outside the top 25%.

In hindsight, this is interesting because that fund, Fund III, is a monster fund: as of September 30, 2025, its net TVPI (total value to paid-in) is 11.3x, and if you include the parallel fund, it’s 9.1x net TVPI.

The portfolio of Fund III includes Coinbase (which brought a16z LP $7 billion in total distributions across all funds), Databricks, Pinterest, GitHub, and Lyft (though not Uber, which strongly proves that missing out is worse than making a mistake), and I believe it is one of the best-performing large venture funds of all time. Since Q3 2025, Databricks (currently a16z's largest holding) has raised funds at a valuation of $134 billion, meaning Fund III's performance is now even stronger. a16z has already distributed $7 billion net to LPs from Fund III and its parallel fund, and there is still nearly as much unrealized value on the books.

Most of the unrealized value is in one company, Databricks: a massive big data company that was very small when The Wall Street Journal was bearish on a16z in 2016, just months away from crossing the $500 million valuation threshold. Today, Databricks accounts for 23% of a16z's total net asset value (NAV).

If you spend some time at a16z, you will often hear the name Databricks. Aside from being its largest holding (which is certainly one of the top three largest holdings in the entire venture capital industry by dollar amount), its story is also the clearest example of how a16z operates at its best.

The Success Formula of Databricks and a16z

Before we start talking about Databricks, it will be useful to understand some characteristics of the company that we haven't discussed yet.

First, a16z is founded and operated by engineers. Not just founders, but engineer founders. This influences how they design companies (winning through scale and network effects) and also how they select markets and the companies within them.

Second, at a16z, perhaps nothing is a greater sin than investing in "the second place." If you miss a winner early on, you can always invest in later rounds. But if you invest in the second place, you are blocking yourself from the winner's door. This is true even if the eventual winner has not yet been born.

Third, once a16z is convinced it has found the winner in a category, the classic a16z approach is to give it more money than it thinks it needs. Everyone laughs at them for this.

These three things have been true since the company was founded.

Back in the early 2010s, just a few years after a16z was founded, big data was the hot thing (you should remember this), and the dominant big data framework of that era was Hadoop. Hadoop uses a programming model called MapReduce (originally developed by Google) to distribute computation across cheap commercial server clusters rather than expensive dedicated hardware. It "democratized big data," leading to a surge of companies emerging to facilitate and capitalize on this democratization. Cloudera was founded in 2008 and raised $900 million in 2014, with investments in Hadoop companies quintupled that year to $1.28 billion. Hortonworks, spun off from Yahoo, went public that same year.

Big data, lots of bucks. But a16z didn’t make any money from it.

Ben Horowitz, the "z" in a16z, didn’t like Hadoop. Before becoming CEO of LoudCloud/OpsWare, Ben was a computer science student, and he didn’t believe Hadoop would become the winning architecture. Its programming and management were very difficult, and Ben believed it was not suited for the future: every step of MapReduce computation writes intermediate results to disk, making it extremely slow for iterative workloads like machine learning.

So Ben avoided the Hadoop craze. Jen Kha told me that Marc was:

"Literally ready to kill him because at that moment, Hadoop was all over the headlines, and he said, 'We’re going to miss this. We totally messed up. We dropped the ball.'"

And Ben said, "I don’t think this is the next architectural shift."

Then eventually, when Databricks came along, Ben said, "This could be it." And of course, he went all in.

Databricks appeared at just the right time, right down the road from UC Berkeley.

Ali Ghodsi and his family fled Iran during the 1984 Iranian Revolution and moved to Sweden. His parents bought him a Commodore 64 computer, and he taught himself programming, actually doing so well that he was invited to be a visiting scholar at UC Berkeley.

At Berkeley, Ali joined AMPLab, where he was one of eight researchers (including paper advisor Scott Shenker and Ion Stoica) working to realize the ideas in PhD student Matei Zaharia's thesis and build Spark, an open-source software engine for big data processing.

The idea was to "replicate what large tech companies do with neural networks, but without the complex interfaces." Spark set a world record for data sorting speed, and the paper won the best computer science paper award of the year. In keeping with academic tradition, they released the code for free, but almost no one used it.

So starting in 2012, the eight of them gathered for a series of dinners, during which they decided to team up to start a company on top of Spark. They called it Databricks. Seven of the eight joined as co-founders, and Shenker signed on as an advisor.

Databricks co-founder - Ali Ghodsi sitting in the front row center

The team thought Databricks needed a little money. Not a lot, just a little. As Ben told Lenny Rachitsky:

"When I met them, they said, 'We need to raise $200,000.' I knew at the time they had this thing called Spark, and there were well-funded companies racing toward Hadoop, while Spark was open-source, so time was of the essence."

He also realized that as academics, the team tended to think small. "Generally speaking, professors… if you start a company and make $50 million, that’s a pretty big win. You’re a hero on campus," he told Lenny.

Ben brought the team some bad news: "I’m not going to write you a $200,000 check."

But he also brought them some very good news: "I’ll write you a $10 million check."

His reasoning was, "You need to build a company. If you’re going to do this, you need to go all in. Otherwise, you should stay in school."

They decided to drop out. Ben increased the check amount, and a16z led Databricks' Series A funding round at a post-money valuation of $44 million. It owned 24.9% of the company.

This initial encounter—Databricks asking for $200,000, a16z giving more and bigger—set a pattern. When a16z invests in you, they believe in you.

When I asked Ali about a16z's impact, he was unequivocal: "I think if it weren’t for a16z, Databricks wouldn’t exist today. Especially Ben. I don’t think we would exist. They really believe in us."

Belief is a cool thing. When you have the power to make it self-fulfilling, it becomes even more valuable.

Like in 2016, when Ali was trying to strike a deal with Microsoft. From his perspective, it was obvious due to the massive demand for Databricks on Azure. He asked some of his VCs to introduce him to Microsoft CEO Satya Nadella, and they did, but those introductions "got buried in the administrative assistant loop."

Then Ben formally introduced Ali to Satya. "I got an email from Satya saying 'We are absolutely interested in establishing a very deep partnership,'" Ali recalled, "and he cc'd his deputy and the deputy's deputy. Within hours, my inbox was flooded with 20 emails from Microsoft employees, people I had previously tried to talk to, all saying, 'Hey, when can we meet?' It was like, 'Okay, this is different. This is going to happen.'"

Or in 2017, when Ali was trying to hire a senior sales executive to maintain growth momentum. The executive wanted to include change of control provisions in his contract—basically, if the company was acquired, the options would vest faster.

It was a stalemate, so Ali asked Ben to help persuade the person that Databricks was worth "at least $10 billion." After talking to him, Ben sent Ali this email:

Email from Ben Horowitz to Ali Ghodsi, September 19, 2018

"You are seriously underestimating this opportunity.

We are the cloud's Oracle. Salesforce is worth 10 times Siebel. Workday will be worth 10 times PeopleSoft. Our value will be 10 times Oracle. That’s $2 trillion, not $10 billion.

Why does he need change of control provisions? We’re either not changing control."

This is one of the most hardcore company emails ever, especially considering that at the time Databricks was valued at only $1 billion, with annual revenue of just $100 million, and now it’s valued at $134 billion with annual revenue exceeding $4.8 billion.

"They envision the full potential of things," Ali told me. "When you’re in the trenches of operations every day, seeing all the challenges—deals not closing, competitors beating you, money running out, no one knows who you are, people leaving you—it’s hard to think that way. But then they come to board meetings and tell you, 'You’re going to take over the world.'"

They were right, and their belief has been rewarded. In total, a16z has invested in all twelve rounds of Databricks' funding. It led four of those rounds. This is one of the reasons why Fund III (the fund that made the initial investment in the company) has performed so well, and it’s also a driving force behind the returns of its larger late-stage funds 1, 2, and 4.

"First and foremost, they really care about the mission of the company. I don’t think Ben and Marc see this primarily as an investment return. That’s secondary," Ali observed. "They are tech believers who want to change the world with technology."

If you don’t understand Ali’s assessment of Marc and Ben, you won’t understand a16z.

What is a16z?

a16z is not a traditional venture capital fund. On the surface, this is obvious! It has just completed the largest VC fundraising across all strategies since SoftBank's $98 billion Vision Fund in 2017 and Vision Fund II in 2019. This is not traditional at all. But even SoftBank's Vision Fund is a fund. a16z is not that.

Of course, a16z raises funds and needs to generate returns. It must excel in this regard, and so far, it has been outstanding. Not Boring has a16z's fund return data to date, which we will share below.

But first—what is a16z?

a16z is a tech fanatic. Everything it does is aimed at bringing better technology to make the future better. It believes that "technology is the glory of human ambition and achievement, the vanguard of progress, and the realization of our potential." Everything stems from this. It believes in the future and bets the entire company on it.

a16z is a company. It is a business, an enterprise. Its founding goal is to scale and improve as it scales. I believe many characteristics of a company do not apply to traditional funds, and we will cover these characteristics. I think this distinction addresses one of the strangest things in venture capital's self-image: that venture capital is an industry that sells the most scalable product (money) to the most scalable companies (tech startups), yet it cannot scale itself.

This distinction—company > fund—comes from a16z GP David Haber, who is the most East Coast finance-like person in this group and describes himself as a student of investment firms as businesses. "The objective function of a fund is to generate the most carried interest with the fewest people in the shortest time possible," he explains. "A company is about providing excellent returns and building sources of competitive advantage that compound. How do we get stronger as we scale rather than weaker?"

a16z is operated by engineers and entrepreneurs. The stereotype of fund managers tries to grab a bigger slice of a fixed pie. Engineers and entrepreneurs try to grow the pie by building and scaling better systems.

a16z is a temporal sovereign. It is an institution designed for the future. The company sees itself as a peer to the world’s leading financial institutions and governments at its most ambitious moments. It has stated its goal is to become the (initial) JPMorgan of the information age, but I think this underestimates its true ambition. If governments represent spatial blocks, then a16z represents that huge temporal block known as the future. Venture capital is merely the way it has found to have the greatest impact on the future and the business model that aligns most with its profit goals.

a16z manufactures and sells power. It builds its power through scale, culture, networks, organizational infrastructure, and success, and then primarily empowers the tech startups in its portfolio through sales, marketing, recruiting, and government relations, although it seems to include a lot of what its founders say a16z will do anything it can.

If you were to design such an institution, one that believes technology is "devouring markets much larger than the tech industry has ever pursued," one that believes everything is technology, you would build a company that sells winning power to hundreds of thousands of companies that may one day become economic actors. I think you would build an institution that looks a lot like a16z.

Because those companies that may one day become economic actors start small and fragile. They begin dispersed, each with its own goals and competitors; often, they compete with each other. And they face entities that dominate the present, which do not want to give way to newcomers. A small company, no matter how promising, may not be able to hire the best recruiters who can recruit the best engineers and executives. It may not be able to advocate for policies that give it a fair chance. It may not have an audience to communicate its message to the world in a way that people are willing to listen. It may not have the legitimacy to sell its products to governments and large enterprises overwhelmed by promises of the next big thing.

For any small company, it makes no sense to invest billions to build these capabilities and amortize them solely over itself. But if you can amortize these capabilities across all these companies, across trillions of dollars of future market value, then suddenly small companies can have the resources of large companies. They can determine winners and losers based on the merits of their products. They can bring forth the future they deserve.

What if you could combine the agility and innovation of startups with the power and weight of a temporal sovereign?

That is what a16z is trying to do, and it has been trying to do since it was a startup itself.

Why Marc and Ben Founded a16z

In June 2007, Marc wrote a blog post titled "The Only Thing That Matters" as part of the Pmarca Startup Guide. On the surface, it was advice for startup tech companies, but in hindsight, it reads like a manual for founding a16z. It answers which of the three core elements of a startup—team, product, or market—is the most important.

Entrepreneurs and VCs would say team. Engineers would say product.

"Personally, I take the third position," Marc wrote, "I assert that the market is the most important factor in a startup's success or failure."

Why? He wrote:

In a great market—a market with a lot of real potential customers—the market pulls the product out of the startup…

Conversely, in a bad market, you can have the best product in the world and an absolutely killer team, but it doesn’t matter—you will fail…

To pay tribute to Andy Rachleff, a former employee of Benchmark Capital, who crystallized this formula for me, I propose Rachleff's Law of Startup Success:

The number one killer of companies is lack of market.

Andy said:

When a great team meets a bad market, the market wins.

When a bad team meets a great market, the market wins.

When a great team meets a great market, special things happen.

I think what Marc and Ben saw in venture capital was a great market (no one realized how great), filled with bad teams (no one realized how bad).

Between 2007 and 2009, Ben and Marc were figuring out what to do next. They were very successful tech entrepreneurs, and despite their success, they were dissatisfied, and because of their success, they had what you could call "fuck you money."

But what to do?

As entrepreneurs and then as angel investors, Marc and Ben dealt with many bad venture capitalists, and they thought it might be fun to compete with those people.

"For Marc, it wasn’t about the money, at least from my perspective," David Haber told me. "He had been wealthy since he was 20. At the beginning, it might have been more about punching Benchmark or Sequoia in the face."

Venture capital had another advantage, something that very few people realized during the recession triggered by the global financial crisis: it might be the greatest market on Earth. This was extremely important to Marc.

Of course, not all venture capital is bad. The two firms Marc wanted to punch in the face—Sequoia and Benchmark—are very good (Marc quoted Andy Rachleff!). Except they tend to push founders out. For those founders who want to stay in control, Peter Thiel launched Founders Fund in 2005 and was deploying FF II from 2007, which, as Mario wrote, later returned $18.60 in real cash for every dollar invested (DPI).

But overall, compared to today, it was a lazy, insular, artisanal industry.

Marc likes to tell a story about how in 2009, when he and Ben were considering launching a16z, he met with a GP from a top firm, who compared investing in startups to grabbing sushi off a conveyor belt. According to Marc, this GP told him:

The venture capital business is like going to a conveyor belt sushi restaurant. You just sit there on the dune road, and startups come in, and if you miss one, it’s okay, because another sushi boat follows right behind. You just sit there and watch the sushi go by, occasionally reaching out to grab a piece of sushi.

If the goal is to maintain the good times, "as long as the industry’s ambitions are limited," this is fine, Marc explained to Jack Altman on Uncapped.

But Marc and Ben's ambitions are not limited. In their company, there is no greater sin than "missing one," not investing in a great company. This is very important. Because they see that as the