Katie Haun: The New Queen of the Crypto World?

Original Author: Michal Lev-Ram

Compiled by: Fortune China

On March 23, The Block reported that Haun Ventures, a venture capital firm led by former a16z partner Katie Haun, has raised $1.5 billion for its two cryptocurrency-focused venture funds, with $500 million allocated for early-stage investments and $1 billion for an "accelerator" fund. Katie Haun, the first female fund manager at a16z and a former federal prosecutor with the U.S. Department of Justice, carries an air of mystery. This article offers a more intuitive understanding of this new queen of crypto.
Katie Haun invited me to view her art collection. Conveniently, this visit did not require a trip to a gallery or even her home—Haun's preferred medium for collecting is NFTs, or "non-fungible tokens." So, we are browsing an entire set of digital images on her phone. In the tech industry where Haun operates, these digital collectibles, stored on the blockchain like cryptocurrencies, have become highly sought-after trendy products.

To find her favorite piece, Haun quickly flipped through lush floral images and some more avant-garde, digitally punk-inspired avatars. "My collection is quite diverse," she admitted. In the extremely hot NFT market, some of the most popular works have sold for tens of millions of dollars, but this pixelated image—a girl with a bright pink ponytail—cost her nothing. It was a birthday gift from her friend Elena Silenok at the end of 2021. Notably, Elena is also the wife of Chris Dixon, a partner at Andreessen Horowitz. Since Haun left her job at the U.S. Department of Justice to enter the venture capital field, Dixon has co-led the firm's cryptocurrency fund with her.

However, while the girl with the bright pink hair may remain on the blockchain forever, real-world interpersonal connections are more easily altered. A ready example is right in front of me. The reason I made the trip is that Haun has just announced a major news: she is leaving Dixon and the powerful Andreessen Horowitz to start her own fund.

While the average person may not know Haun, she has become an unexpected star in the cryptocurrency and broader Web3 world. Web3 encompasses not only cryptocurrencies like NFTs, Bitcoin, and Ethereum but also the underlying blockchain infrastructure that supports these cryptocurrencies. When Haun entered this field in 2013, she was not an innocent crypto fan. In fact, she was a federal prosecutor based in San Francisco, investigating how criminals exploited this technology.

"This appointment was not my choice," she said of her previous legal work, which included prosecuting white-collar criminals, prison gangs, and corrupt federal agents. "But I did choose to stay in this field," Haun said.

This choice stemmed from an enthusiastic invitation from Andreessen Horowitz. Known as a16z, it is one of Silicon Valley's largest and most well-known venture capital firms. While many VCs were still cautious about investing in cryptocurrencies, a16z's founders, Marc Andreessen and Ben Horowitz, became early believers in Web3. In Haun, these two legendary venture capitalists saw a type of expertise they desperately needed but found rare: the ability to navigate the complex regulatory environment facing the nascent cryptocurrency industry.

Subsequently, this former prosecutor was hired as a16z's first female investing partner. She co-founded and led a cryptocurrency investment team of about 50 people. The total fundraising for its previous fund reached an astonishing $2.2 billion. Before long, this former outsider became one of a16z's most prominent partners, investing in popular companies like the cryptocurrency exchange Coinbase and the NFT marketplace OpenSea.

In mid-December 2021, Haun suddenly announced she would leave a16z to prepare to start a brand new venture capital firm. As soon as the news broke, Silicon Valley was hit with a wave of text messages: congratulations, admiration, and even skepticism poured in. This was a big event, especially considering that Haun reportedly plans to establish a fund of up to $1 billion. If she succeeds, this would be the largest cryptocurrency fund ever raised solely by a female venture capitalist.

"In the cryptocurrency investment field, women are rare," said Amy Wu, head of FTX Ventures. She herself was recently invited to join FTX Ventures to manage a $2 billion fund launched by the cryptocurrency exchange this January. In fact, there are few women writing venture capital checks; in the U.S., female venture capitalists account for only 15.4% of general partners.

Now, this former prosecutor faces a new challenge. Yes, Haun leaves a16z, where she has served for four years, with a high-profile image, extensive connections, and impressive investment performance. But she also gives up the strong team at the firm (a16z has over 300 employees), substantial financial resources, enviable assets, and prestige. Haun and her ambitious six-person team offer startup founders a distinctly different proposal. The new company is about to enter a world that oscillates between dizzying gold rushes and nauseating price corrections. Will Haun 2.0 be able to survive in such a turbulent environment and get founders to sign their names on the dotted lines of investment agreements?

On a crisp day in January, I chose to meet Haun for the first time at the beautiful hotel in Menlo Park, just a stone's throw from her former a16z office. We sat on an outdoor terrace, overlooking the stunning views of the Santa Cruz Mountains. For many venture capitalists working in the area, this is a very convenient meeting spot, but this usually bustling hotel was quite empty, with few customers. This makes sense: in the Bay Area and elsewhere, cases of the Omicron variant were surging. However, even if the place were packed with venture capitalists as usual, Haun would still stand out. She has blonde hair and sharp blue eyes, and I have never seen her wear anything with an Arc'teryx or Patagonia logo—two pseudo-casual brands that are standard attire in the venture capital-laden Sand Hill Road. Today, Haun wore a polka-dotted dress. The last time we met, she was in a light pink Valentino suit.

Haun is elegant yet unpretentious. She possesses an elusive quality, as if she could converse comfortably with anyone, whether in a boardroom or a courtroom. She is persuasive and tenacious. But she can also put people at ease; when discussing her new company, Haun appeared very excited—even a bit dizzy.

Sources revealed that Haun is raising at least $1 billion for her first fund. Haun was unwilling to confirm this figure. She said that due to "legal and regulatory reasons," she is prohibited from commenting. This is standard rhetoric for venture capitalists during fundraising. They worry that if they say something amiss, they could anger the U.S. Securities and Exchange Commission. However, given the massive influx of funds into the cryptocurrency space today, $1 billion seems like a feasible, even somewhat conservative figure.

According to recent data released by PitchBook, U.S. venture funding reached a record $128.3 billion in 2021. The share flowing to cryptocurrency funds has also rapidly increased, from less than 0.5% in 2017 to nearly 7% in 2021. As venture capitalists are throwing money around, their own investors, the limited partners, are also rushing in to fill their coffers. This, combined with Haun's ability to participate in the hottest crypto deals, is a good sign for her. Her plan to start small and focus solely on the crypto space may also work in her favor.

"True crypto-native funds are extremely attractive to limited partners," said Ilia Fushman, a partner at venture firm Kleiner Perkins, "because these investors can attract exciting new founders."

Haun is seizing this opportunity. Her new company has already made seven investments, one of which went to the Los Angeles startup Autograph, with an undisclosed investment amount. This is a company that helps athletes and artists launch and market NFTs. Fushman's firm is another lead investor in this round, and both he and Haun will join Autograph's board. An interesting fact is that this startup is also backed by superstar Tom Brady, who currently plays for the Tampa Bay Buccaneers. But guess which company led the $170 million round? A16z, with Dixon also joining the board.

This may be hard to believe—after all, any breakup inevitably causes some tension—but both sides insist that Haun and her former employer parted on friendly terms. She stated that she had a fruitful and rewarding time at a16z. She also praised the firm's founders for giving her an opportunity. "Not many people thought, 'Oh, she will become an outstanding venture capitalist,'" Haun said.

But Haun believes that her experience working with founders changed her view of what she wanted. "One of the things I learned in the past four years at the firm is that I am actually quite suited for entrepreneurship," she said. The moment a16z's third crypto fund was fully deployed in 2021, she felt it was time to turn the page on her life. "This turning point prompted me to reflect for a long time," she said, "It was time to go out on my own. It's that simple."

Haun pointed to a terrace near our seats. She said that in December 2021, she and Dixon discussed the details of her new venture there, such as how many of her old colleagues she could take with her. (An insider referred to these negotiations as "horse trading.") Ultimately, both sides agreed that Haun would lead six a16z employees out, including her Chief Marketing Officer Rachel Horwitz and the new company's Global Policy Director Tomika Tillerman. They also decided that a16z would be an early investor in her new fund. Undoubtedly, in some deals, Haun's new company will become a competitor to her former employer a16z, but as an investor in her new company, a16z will benefit regardless of who wins. Aside from this arrangement, both Haun and a16z stated that they would continue to collaborate on some deals, just as they recently co-led the investment in Autograph.

"We often discuss promising projects and teams and continue to work together on multiple boards," Dixon said in a written statement provided to Fortune. "So we will continue to maintain a very close working relationship."

Despite multiple requests, Dixon has consistently declined to speak directly with me. This indicates that a16z has adopted a media communication strategy that is quite different from Haun's. As one might expect from a former prosecutor—whose job typically requires leveraging the media to advance one's case—Haun is more than willing to be in the spotlight, frequently giving media interviews and having long been a regular at tech conferences (she has spoken at three events hosted by Fortune). Meanwhile, a16z has grown increasingly aloof toward the media. Its co-founder Marc Andreessen is notorious in media circles for blocking reporters on social media. This venture giant has even begun to initiate internal content operations to completely avoid the media.

You know who else hates the media? Celebrities.

But that hasn't stopped Mindy Kaling from sharing her first impression of Haun with me. "She is a venture capitalist I would really want to go on vacation with," she told me via email. Kaling is an actress, writer, and producer, best known for her role in the TV series The Office.

Kaling met Haun at a dinner in Los Angeles in the fall of 2021, attended by a group of women from the entertainment industry. One of the purposes of the gathering was for Haun to share her insights on investing in the crypto world with the artists, some of whom were quite interested in getting involved in Web3. According to insiders, the famous actress Gwyneth Paltrow also attended the gathering that night. She later announced her investment in the Bitcoin mining company TeraWulf.

Image Source: COURTESY OF KATIE HAUN

In 2004, Haun posed for a photo with U.S. Supreme Court Justice Anthony Kennedy. From late 2004 to 2005, she served as a clerk for this justice.

One of the ways Haun plans to stand out from the competition is by focusing on "verticals" and bringing in expert advisors for each area. She has hired Jared Cohen, CEO of Google's think tank and incubator Jigsaw, and fellow prosecutor William Frenzen to oversee technology and government policy, respectively. When Haun needed an entertainment advisor, she called Kaling.

"I think I said yes before she even finished her sentence," Kaling said. "She is a legend in the crypto community; who wouldn't want to be around her?"

Additionally, according to Haun's plan, her new company will need to make some significant changes compared to the fund she co-managed at a16z. She has no intention of pursuing that kind of massive scale. "To stay nimble, we are building a lean team," she said. a16z is known for providing a full suite of services, including marketing and legal support, to its portfolio companies, but Haun seeks to adopt a more targeted service approach, clarifying what her company can and cannot do for founders.

For Haun, small scale and targeted services do not conflict with globalization. She plans to look for new startups in places away from entrepreneurial hotspots like Silicon Valley. "I think some of the best crypto founders are often hiding in less obvious corners," Haun said, "So I think that's one of the things the new company will do—we will gradually develop this global perspective." (a16z claims that the vast majority of the crypto companies it invests in are "registered" in the U.S., although many of their employees are spread across the globe.)

Of course, the new company also needs a name. So far, Haun has been referring to this new company using her name, Katherine Rose Haun, abbreviated as "KRH." But the investor stated that this was only for the sake of signing legal documents. "I don't want to rule anything out, but I will not name the company after myself," Haun told me. "I am building a company with a franchise. I am sure it will one day be handed over to someone else to manage."

It is difficult to quantify how successful Haun has been as a venture capitalist. This is partly due to the nature of the job—losing bets is quite normal, and successful investments often take over ten years to "exit," meaning going public or being acquired. In the past four years, Haun and a16z's cryptocurrency team have made over 60 investments. So far, only one of these investments has exited: the cryptocurrency exchange Coinbase went public in 2021 with a valuation of nearly $100 billion. Although Coinbase was Haun's first job in the crypto world (after Haun left the U.S. Department of Justice in 2017, Coinbase invited her to join its board), a16z had already made its first investment in the company back in 2013, before Haun joined.

Nonetheless, many companies in her portfolio have seen staggering growth in valuation. This is perhaps the most frequently cited success metric before a venture capital firm exits a startup. For example, OpenSea has become the dominant player in the NFT market, with its valuation skyrocketing from $1.5 billion in 2021 to over $13 billion today.

"She is a heat-seeking missile," said Jesse Walden, a former investor at a16z. "She is incredibly attuned to what's happening in the space and knows who you need to know to keep up with the industry trends. For investors, that's a superpower." Walden left a16z in 2020 to start his own cryptocurrency fund.

In fact, finding the right founders and gaining their investment permission seems to be a crucial part of Haun's achievements so far. At her new company, she plans to leverage this superpower to build her own team, help the companies she invests in build their teams, find deals, and of course, close deals.

"This is how I've made a living for over a decade," she refers to her previous career as a federal prosecutor. "I do deals, negotiate, and sit across from someone I have to quickly see through."

"Katie is a seasoned player," said Justin Blau, co-founder and CEO of Royal, a company that helps musicians sell royalty ownership to fans. "She has been active in this space for a long time, and her network extends not only throughout the crypto world but far beyond it."

Image Source: COURTESY OF KATIE HAUN

After announcing her departure, Haun attended an a16z team dinner with Dixon.

Coinbase's COO Emily Choi recalled an instance when a potential board member was considering a position at another company, and at that moment, Haun stepped in. According to her description, Haun invited the individual out for dinner, and once seated, she told him that not joining Coinbase would be a crazy move. The tactic worked. "She knows what to say to turn the tide," Choi said. "She won't stop until she gets what she wants."

Haun played a pivotal role in building a16z's cryptocurrency team. Over four years, the team grew from two people to about 50. Haun stated that "most" of the team members were personally recruited by her. (Dixon noted in an email, "Recruiting is a team effort, and Katie is an important part of that team.")

Undoubtedly, Haun needs to continually bring in top talent to carve out a space for her new company in the increasingly competitive crypto investment market. But she also needs to dig deep into the regulatory and legal expertise that initially caught Silicon Valley's attention. The crypto world may no longer be as unknown as when a16z first knocked on the door, but it is still fraught with uncertainties—if not more perilous ones.

As cryptocurrencies begin to expand globally, challenges and controversies arise. China legislated to ban cryptocurrencies in 2021, and other countries have restricted their use due to concerns that cryptocurrencies undermine government control over existing monetary systems. Another concern is brewing: some digital currencies are notorious for their energy consumption, leaving a massive carbon footprint. This issue has become a focal point of attention. During a hearing held by the U.S. House Energy and Commerce Subcommittee on January 20 this year, several U.S. lawmakers engaged in heated debates on how to make cryptocurrencies more environmentally friendly.

"Regulatory compliance is the most important issue in the crypto space this year," said Amy Wu of FTX Ventures.

In addition to external threats, the rapid growth of cryptocurrencies has also drawn criticism from the tech ecosystem. Some heavyweight startup founders, such as Aaron Levie of Box and Brian Chesky of Airbnb, have expressed skepticism about the adoption and impact of Web3. Within the crypto community, there is growing concern that power is increasingly consolidating in the hands of a few elites, particularly those large startups with massive venture capital backing. For those who passionately support the beautiful vision of Web3, this is indeed a shame. People originally hoped that Web3 would promote the "decentralization" of information control, theoretically dispersing power in a way that has never occurred on the traditional web.

Image Source: BLOOMBERG/GETTY IMAGES

Coinbase successfully went public in 2021.

In the face of a surge of skepticism, Haun's former employer a16z launched a vigorous rebuttal, claiming that Web3 is still young but will ultimately deliver on its promises. True to form, Andreessen even blocked another tech mogul—Twitter founder Jack Dorsey. The two had previously engaged in a public spat over whether crypto companies promote "decentralization" or exacerbate "centralization."

Haun, however, has taken a more diplomatic approach in her responses. "I find it very exciting to see people like Moxie Marlinspike (an industry figure skeptical of Web3) and Jack Dorsey so engaged in this space and offering nuanced commentary," Haun said. "I welcome that."

However, despite frequently hearing critical voices, Haun said she is not worried about the future of cryptocurrencies. Yes, the infrastructure is not yet fully deployed, but it is on its way. Meanwhile, the potential of this technology has exploded. When she entered the investment field in 2018, most people believed that the only truly meaningful application of cryptocurrencies was financial innovation. Haun said, "I now find that, wow, the applications today are far more than we initially imagined."

Now there is a more pressing question. In January, just as Haun was raising funds for her new venture, the crypto market experienced a crash, with $1.4 trillion in market value evaporating. Some called it a "bloodbath," while others referred to it as a "price correction." Haun is not worried about this. She pointed out that extreme volatility is not new to this space. "The essence of running a crypto fund is to take risks."

Many of the structures of cryptocurrency transactions themselves, including the investment deals Haun's new company is about to undertake, face extremely high risks. Unlike traditional venture capital deals that exchange cash for equity, many cryptocurrency investors are willing to accept so-called tokens as part of their equity stake. These tokens are essentially digital securities stored on the blockchain, facing the same extreme volatility as the broader cryptocurrency market.

However, for Haun, it is important to separate the inherent risks of this field from uncertainties she has never experienced before.

"Like many experiences in my career, I believe things are either 'all in' or 'not at all.' Whether it was when I joined Andreessen Horowitz or when I later decided to go solo, I was all in. In my previous legal career, I also experienced many similar moments. I always listen to my heart, follow my intuition, and pursue my interests. It's really no different. In the past few weeks, have I had any doubts about what I'm doing? Yes, absolutely. But I am still very committed to it. I know it's the right decision."

Betting on Blockchain

Haun has already invested in some of the fastest-growing and most promising cryptocurrency startups. The industry is still young, and many winners have yet to be officially crowned—or, rather, losers have not yet been completely eliminated. Here are some of Haun's most notable investments to date, along with the companies where she serves on the board.

Arweave

This Berlin-based company claims to be a pioneer in a new type of data storage (using blockchain technology to "store" information). Haun led a $5 million funding round in 2019. This round was entirely based on tokens, meaning investors were purchasing digital securities recorded on the blockchain rather than traditional equity.

Autograph

This startup, co-founded by football superstar Tom Brady and focused on the NFT market, raised $170 million in January this year. Haun's new company (and her former employer Andreessen Horowitz) participated in this funding round, and Haun has now joined Autograph's board.

Coinbase

Haun became the first independent board member of this startup in 2017. This ultimately led to her joining a16z, which was an early investor in this cryptocurrency exchange. Coinbase went public in April 2021 with a valuation of nearly $100 billion, achieving a rare venture capital exit in the crypto industry.

OpenSea

As one of the hottest startups in the rapidly growing NFT market, OpenSea's valuation has now exceeded $13 billion. Haun led two funding rounds for the company while working at a16z and joined its board. She made another investment through her new company, participating in a $300 million Series C funding round for this auction platform in January.

Royal

This is another investment Haun made while working at a16z. Royal is a new NFT application dedicated to helping musicians sell royalty ownership to fans. In 2021, alongside other venture capital firms, artists such as the electronic music duo The Chainsmokers and rapper Nas also participated in Royal's $55 million Series A funding round.