The new king of venture capital, a16z partner Chris Dixon, how does he dive into the cryptocurrency rabbit hole?

Written by: Alex Konrad, Forbes

Translated by: TechFlow

Note: Recently, Forbes magazine in the United States released the latest "2022 Midas List." This list originated in 2001, and the selection model for the first eight years was based on collecting data from global venture capitalists' investment portfolios from the previous year to select the top 100 with the highest returns. Named after the myth of King Midas, who could turn anything into gold, it is also known as the "Golden Finger" list and is often referred to as the Oscars of the investment world.

In 2018, Sequoia Capital's global managing partner Shen Nanpeng topped the list, marking the first time a Chinese investor reached the top, which, in hindsight, can be seen as the pinnacle moment for China's internet.

This year, a new top figure has emerged, belonging to Chris Dixon, a partner at Andreessen Horowitz (a16z). He joined a16z in 2013 and invested in companies like Ripple and Coinbase, continuously betting on Coinbase in every subsequent round, becoming its largest external shareholder, with shares valued at over ten billion dollars at their peak.

Not only Chris Dixon, but several other investors on this year's list have also made Coinbase a major investment, ranking third among all companies.

Today, Chris Dixon has become the biggest proponent of the Web3 narrative, or rather, "he is leading Web3," as described in a deep article from Forbes about how he gradually jumped into the cryptocurrency rabbit hole.

Main Text:

In 2013, serial entrepreneur Chris Dixon transitioned to become a venture capitalist, seeking the next big opportunity. The big opportunities of the 1980s were personal computers, the 1990s were the internet, and the 2000s were mobile phones. After becoming a new partner at the venture capital firm Andreessen Horowitz, Chris Dixon began pursuing his "moonshot" plan—virtual reality, 3D printing, and drones.

However, it was his early bet on the cryptocurrency exchange Coinbase that would define Chris Dixon's career. The firm he was with led a $25 million round of financing for Coinbase in 2013. By the time Coinbase went public in April 2021, Andreessen Horowitz had accumulated nearly 30 million shares (15% stake) across 14 other funding rounds.

At the end of Coinbase's first trading day, those shares were worth about $10 billion, yielding approximately 60 times the return. (The company later sold some shares, and the current trading price is about half of that.)

Coinbase is a gem in the portfolio, making 50-year-old Chris Dixon the new number one on the Midas List.

Chris Dixon has also made several other significant deals, including the decentralized cryptocurrency exchange Uniswap (with a fully diluted valuation of $10 billion, including uncirculated tokens), the open-source blockchain Avalanche ($62 billion), and Dapper Labs, the creator of NBA Top Shot ($7.6 billion).

Chris Dixon currently splits his time between New York and California. He is a veteran in the cryptocurrency field and one of the wealthiest individuals. After achieving success with the first cryptocurrency fund at a16z (a common abbreviation for Andreessen Horowitz, as there are 16 letters between "a" from Andreessen and "z" from Horowitz), Chris Dixon and his team turned $350 million into $6 billion (both realized and unrealized gains) by the end of 2021, achieving an astonishing 17.7 times return, according to a source familiar with the fund's financial situation.

The source told reporters, Chris Dixon and his team have been raising new funds in the market, reportedly to create the largest cryptocurrency venture fund ever, with a size of $4.5 billion. Andreessen Horowitz declined to comment on its performance or fundraising status.

"From any perspective, he is the top cryptocurrency investor," said Hemant Taneja, managing director of General Catalyst (ranked 23 on the Midas List), who supported Chris Dixon's first startup nineteen years ago. Chris Dixon's colleague and co-founder of the company, Ben Horowitz (ranked 87 on the Midas List), further stated: "I believe that in ten years, everyone will consider him the greatest investor of his generation."

Chris Dixon rarely gives interviews, but in one interview with Forbes, he downplayed his own "Midas touch." "My job is not to predict the future," he said, "My job is to have the insight to recognize who the smart people are that can make predictions."

Chris Dixon is the son of two English professors from the University of Wittenberg in Germany. He grew up in Ohio, taught himself programming, and later went to computer summer camps to teach others. His interest in cognitive science and logic drove Chris Dixon to pursue a bachelor's and master's degree in philosophy at Columbia University in the early 1990s.

From a young age, Chris Dixon questioned capitalist enterprises. Ignoring his parents' objections, he quickly found a developer job at a hedge fund, where the pay was the highest. About three years later, he went to Harvard to earn an MBA and briefly worked at the venture capital firm Bessemer Venture Partners.

Afterward, he resigned and partnered to create his own company, SiteAdvisor, which warned users about viruses and malware. Within a year, the security giant McAfee acquired this unprofitable company.

Subsequently, Chris Dixon co-founded an early recommendation engine called Hunch. Like SiteAdvisor, it was acquired by eBay in 2011 for about $75 million. During the process of building and selling two companies, Chris Dixon was exhausted. He needed to choose whether to continue as an independent investor, treating blogging and podcasting as his career, or to become a suitable venture capitalist.

While building Hunch, Chris Dixon had already begun personally investing in other startups in New York's tech scene (which was small at the time), some of which borrowed extra desks in Hunch's office. Chris Dixon's more than 50 personal investments include the crowdfunding platform Kickstarter (2009), the social sharing site Pinterest (2011), and the online payment service Stripe (2012).

He also helped launch a seed-stage fund called "Founder Collective," where he invested alongside several successful entrepreneurs, serving as an angel investor, including investors David Frankel (ranked 11 on the Midas List) and Bill Trenchard (ranked 86 on the Midas List), as well as Eric Paley (who has appeared on the Midas List).

However, in Silicon Valley, Chris Dixon is best known for his personal blog launched in 2009. He shares entrepreneurial strategy advice, personal thoughts, and reflections on big tech in his blog. His blog remains active, with highlights including a 2011 warning about Apple's television in the entertainment industry and opinions on NFTs from a decade ago.

Although Chris Dixon publicly stated that New York's tech scene would eventually take off, investing so far from California felt like being a spectator. Fortunately for him, the loudest and most disruptive founders in venture capital, Marc Andreessen and Horowitz, are both avid readers of Chris Dixon's blog and invited him to join them in the West. Chris Dixon recalls his thoughts at the time, "This is how I can make an impact; I can seek out the next venture and immerse myself in it."

As for Chris Dixon's so-called frontier or "moonshot" investments, these include investments in the virtual reality startup Oculus, which was acquired by Facebook, the drone company Skydio, and the cryptocurrency company Ripple.

Through an investment in the Bitcoin mining startup 21.co founded by former a16z partner Balaji Srinivasan, Chris Dixon gained the opportunity to support Coinbase through his reader Brian Armstrong (Coinbase co-founder).

Brian Armstrong mentioned that the three of them talked for four hours in 2013 and found common ground on cryptocurrency regulatory compliance. In December of the same year, Chris Dixon led Coinbase's Series B funding round, joining a group of investors that included Garry Tan (ranked 28 on the Midas List) and USV partner Fred Wilson (ranked 73 on the Midas List).

Brian Armstrong told Forbes in an email, "In the following years, Andreessen Horowitz was the only firm that participated in every funding round, including the 'next round' funding at a lower valuation."

It turned out that Chris Dixon provided assistance in various aspects, from securing board members and banking partners to advocating for Coinbase to increase support for trading Ethereum and other non-Bitcoin assets. Brian Armstrong stated: "I can confidently say that a16z is Coinbase's most influential investor. Chris has a unique ability to see around corners, especially when it comes to technology and what needs to be built next."

In 2018, while Chris Dixon was working full-time on cryptocurrency investments through a16z's first fund, they planted the first high-profile flags in this emerging field. Today, Dixon and his team face increasingly fierce competition—from general venture capital firms allocating more resources to cryptocurrency investments to specialized competitors like Paradigm, co-founded by another Coinbase founder, Fred Ehrsam.

But Chris Dixon's dedication to cryptocurrency and his willingness to persevere during downturns still carry unique weight. Uniswap is a mainstream decentralized exchange that Chris Dixon supported during its Series A round (one round later than Paradigm), and its CEO, Hayden Adams, stated, "Chris Dixon has the ability to connect traditional technology and finance with cryptocurrency, as evidenced by events like hiring a COO from BlackRock and poaching a VP of engineering from Snap."

Dapper Labs CEO Roham Gharegozlou believes Chris Dixon predicted the rise of NFTs. His company created some of the first digital collectibles on the Ethereum blockchain, CryptoKitties, and Chris managed to snag Kitty No. 15, "Chris saw this industry before it began," Gharegozlou said.

Such credentials are invaluable in an industry that values early adoption and steadfast belief. This also means that if Chris Dixon wanted to, he could easily raise billions for a company under his own name. For example, Katie Haun, a partner at Haun Ventures, recently left her firm and raised a $1.5 billion personal general partner fund. Currently, Chris Dixon and his colleagues insist that he has no interest in going solo.

"Going solo is not the driving force behind my work. For me, the next three years could be the golden age for (cryptocurrency). So I really don't want to spend the next two years setting everything up, recruiting a team, and doing similar things."

Instead, multiple sources have told Forbes that Chris Dixon and a16z have been telling investors they plan to eventually fold the a16z cryptocurrency fund back into the company's central fund. Sources indicate that this move is significant, reflecting the entire company's broad buy-in on Web3 and the strategic (and ubiquitous) nature of cryptocurrency, which cannot continue to be isolated from a single fund. A spokesperson for Andreessen Horowitz declined to comment on the rumor.

Making cryptocurrency more widely accepted in the mainstream market is a problem Chris Dixon is actively working to solve. Last September, Chris Dixon posted a detailed thread on Twitter explaining "why Web3 matters," which caused a stir.

In December of the same year, his advocacy for a decentralized internet and more direct user ownership promised by Web3 (which he believes is currently lacking in "Web2" internet companies like Facebook or Twitter) brought him to the attention of Twitter co-founder Jack Dorsey.

At the time, Jack Dorsey was no longer CEO of Twitter and stated on Twitter: "You (a16z) are a fund determined to become an unignorable media empire… not Gandhi." He believed that Web3 would still be owned by individuals, but this time the owners would be VCs.

The dispute ultimately ended with Andreessen blocking his billionaire peer on Twitter; Chris Dixon did not do so but blocked others. Dixon now says he "may have overreacted," quoting a popular saying on Twitter: "The game of Twitter is not to be the main character of the day, and in this case, he lost."

Colleagues say Chris Dixon is troubled by such attacks, as he represents those powerless entrepreneurs fighting against such online figures. "I think he sometimes comes off as a bit abrasive or old-fashioned, but it is genuinely out of the best intentions," said Arianna Simpson, a cryptocurrency partner at a16z.

Chris Dixon now offers a more measured view to Jack Dorsey and any other tech leaders questioning the decentralized potential of Web3. "My response is, 'Hey, great, come join us and help us solve these issues.' In contrast, I feel like there would be that kind of grenade-throwing from the sidelines (at me)," he said.

For the world's top investor, it is difficult to complain about being at a disadvantage, but Chris Dixon insists that when people claim cryptocurrency is "just a gamble for tech bros to get rich," the industry and its potential are misunderstood.

Chris Dixon plans to spend more time in Los Angeles this year meeting with tastemakers and creators in the entertainment industry, promoting the potential for more direct ownership of content through Web3, and then bringing musicians and others to Washington, D.C., to help win support from policymakers.

Of course, this broader acceptance of cryptocurrency would only enhance the value of the substantial portfolio Chris Dixon holds. But he insists that simply pushing for Midas-like returns is not the only goal.

"We are a VC, and I don't want to pretend we are not venture capitalists. But I will say I am motivated because I believe (Web3) is a truly important movement, and I want to make an impact; I have deep faith in it," he said.