a16z Camp: Unveiling the Accelerated Growth Path of Blockchain Innovators
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a16z Camp: Unveiling the Accelerated Growth Path of Blockchain Innovators
How does content spread on the internet? And how do people get paid as a result?
Navigating Web3 tides with focused insightsBy Joel Khalili
Translated by Bitpush News an
On a cloudy March morning, a group of software developers made their way through throngs of tourists and the muddy streets of central London. They trickled into an office building on the edge of Soho, unassuming amid a street lined with prominent Tudor and neoclassical facades. They had come for the first-ever crypto bootcamp.
Five years ago, Silicon Valley venture capital firm Andreessen Horowitz (a16z) launched a series of lectures aimed at aspiring crypto founders. The goal was to encourage higher-quality startups that could push the boundaries of crypto technology. That initiative later evolved into the Crypto Startup Accelerator (CSX), now a full-fledged program akin to Y Combinator: a16z offers participants $500,000 in funding, 10 weeks of instruction, and access to its resources in exchange for equity. The latest cohort selected the founders of 25 startups.
The group was predominantly male, ranging in age from around 20 to over 50, but dressed similarly: most wore hoodies or graphic T-shirts paired with jeans. Some exuded casual confidence, chatting freely while eating fresh fruit or croissants from a breakfast cart. Others remained quiet along the edges of the room.
As an outsider, I sparked curiosity among some. When I introduced myself as a journalist, I noticed a few stiffen slightly. “Should I be worried you might write about this?” one founder said half-jokingly. But most seemed glad to have someone willing to listen to what they were working on.
Founders were also assessing each other, comparing their fluency in the crypto space. Some were new to the industry, but most were already deeply versed in its language, mysteries, and traditions. One founder said he was the first person in London to use a Bitcoin ATM. Another started trading crypto futures at age 17. A few had already begun geeking out over technical breakdowns of their projects. “I heard he’s a total legend,” another said, referring to the a16z partner assigned to mentor him.
Soon, the group was ushered into a room behind the a16z offices, which would serve as their classroom and lecture hall for the next 10 weeks. Rows of long tables and high-top stools faced a stage adorned with a sky-blue and black CSX logo. Jason Rosenthal, a16z’s operating partner and head of CSX, took the stage first.
Nearly every major generalist venture capital firm—from Sequoia Capital and Accel to Greylock and Lightspeed—has invested in at least some crypto startups. But a16z stands apart in both its belief that the industry can produce a new generation of defining software companies and the depth of its investment commitment—companies it hopes these founders will become. “Each of us has the chance to build a once-in-a-lifetime tech franchise,” Rosenthal told the crowd. “We’re extremely confident that soon there will be companies occupying that spot in this new domain. That seed will be planted today.”
a16z was founded in 2009 by co-founders Marc Andreessen and Ben Horowitz. Andreessen helped develop early web browsers Mosaic and Netscape, while Horowitz co-sold a software company to HP. The firm is known for investments in Facebook, Instagram, Airbnb, and Slack.
In 2018, while searching for its next big opportunity, a16z turned its attention to cryptocurrency. While still investing across multiple sectors, the firm has raised more than $7.5 billion through four dedicated crypto funds and now needs to generate returns from that capital. “We follow great founders,” said a16z partner Sriram Krishnan. “You don’t want VCs telling you what to build.” He added: “We believe the best founders are working in these spaces.”
Yet the cryptocurrency industry has recently struggled. In 2022, the collapse of several major firms—including the crypto exchange FTX—sparked a crisis of confidence in crypto prices and market downturns, leading to further bankruptcies, the failure of crypto-friendly banks, and strong regulatory backlash. Since then, U.S.-based crypto founders have been sentenced, celebrities have been charged with illegally promoting cryptocurrencies without disclosing compensation, and billions of dollars worth of crypto have been stolen through scams and security breaches.
a16z has also seen some missteps in crypto investments over recent years, including backing Meta’s now-defunct Diem cryptocurrency and the similarly shuttered Basis project. Reports indicate that in the first half of 2022, a16z’s original crypto fund lost 40% of its value—though investors still stand to gain tenfold returns.
From 2021 to 2022, generalist venture capital firms poured billions into crypto startups, but their attention has since shifted elsewhere—suggesting limited faith in the technology’s long-term potential. “When the market crashed, many investors fled crypto,” said Robert Le, a crypto analyst at market data firm PitchBook. Although the crypto market has since recovered somewhat, he said, “generalist investors haven’t truly returned.”
“For generalist VCs, all eyes are now on generative AI,” said Edith Yeung, partner at venture capital firm Race Capital. “Crypto is last wave hype.” As an investor in the Solana crypto network, Yeung remains “cautiously optimistic” about the prospects for crypto startups in 2024 and appreciates a16z’s continued focus on crypto—but her own firm will lean more toward AI investments. “Many VCs don’t have the bandwidth to chase both waves at once,” she said.
CSX aims to inject “rocket fuel,” as Rosenthal put it, into early-stage crypto startups that can demonstrate the technology is about more than money laundering and financial speculation. “The crypto downturn effectively pushed those just looking to make a quick buck—the speculators—over to AI, where they think the next fast win is,” Rosenthal said. “Those who stayed are the true hardcore builders. That shows up in our selection process.”
While Rosenthal leads the CSX program, the team reflects more closely the views of a16z partner Chris Dixon, who spearheads the firm’s work in crypto. In his January book *Read Write Own*, Dixon laid out his vision for crypto as the foundation for building a fairer internet. According to his argument, the web is being strangled by greedy profit gatekeepers (some of whom are backed by a16z), harming users. But blockchains—the digital ledgers underpinning crypto networks, governed by pre-coded rules changeable only through mass voting—could reclaim control from the world’s largest tech companies and return the internet to its egalitarian roots.
“I strongly believe the world currently underestimates crypto,” Dixon said. “How does content propagate online? How do people get paid for it? What will internet communities look like, economically and structurally? How will they govern themselves? To me, these are all questions that crypto will answer.”
a16z’s London office, located in a sixth-floor loft with tall windows and exposed piping, was nearly empty just weeks before CSX began. Now, shelves were stacked with energy bars and beef jerky, fridges filled with low-calorie sodas. Bookshelves displayed recommended reading: Peter Thiel’s *Zero to One*, Horowitz’s *The Hard Thing About Hard Things*, and of course, Dixon’s new book.
When I returned a few weeks later, the first-day excitement had given way to a studious atmosphere. Founders hunched over laptops, AirPods in, waiting for classes to begin. They were fully immersed.
Throughout the program, lectures rotated between Rosenthal and other a16z staff, along with guest speakers from within the a16z portfolio, such as Ben Rubin, creator of the chat app Houseparty. Speakers shared hard-won wisdom on topics ranging from hiring (“Don’t dilute too early”) to layoffs (“Killers want to hang out with other killers”) and enduring hardship (“When you chew enough glass, you learn to enjoy the taste of your own blood”). But the curriculum centered on crypto-specific challenges: designing tokens, navigating hostile regulatory environments, and experimenting with novel cryptographic techniques.
At times, the crypto curriculum felt like peering into another world. People weren’t scrolling phones—they were surreptitiously checking code logs. The lexicon of Silicon Valley startup culture—“zero to one,” “product-market fit,” “embrace the suck”—was layered with esoteric crypto jargon: danksharding, delayed functions, zk-snarks. “If you really want to impress a cryptographer,” one speaker joked, “ask them whether lattice assumptions will survive.” Everyone laughed. I didn’t.
Although some founders came from Europe and beyond, a large portion were American. During an icebreaker, a founder from Texas told the group he was worried about the quality of tacos in London. Another, who’d spent time in the city before, confirmed his fears were justified.
Whether by deliberate affectation or genuine exhaustion, the group embodied the stereotype of overworked, sleep-deprived founders. At lunch one day, I asked one if he’d set aside time to sightsee. He gave me a puzzled look; he explained he’d been burning the midnight oil at his desk throughout CSX.
The software developed by startups in this accelerator fell into three categories: consumer-facing apps, enterprise services, and technical infrastructure relied upon by other crypto software. Relatively few highlighted crypto prominently in their intros—if you visited their websites, you wouldn’t necessarily know they were crypto-related—but each used crypto technology under the hood.
One startup, AminoChain, offers patients a way to earn royalties by contributing biopsy samples for medical research, while providing hospitals with a platform to distribute stored samples—currently often underutilized. Another, Roux, turns recipes into collectible NFTs, helping chefs and food bloggers monetize without cluttering recipe pages with ads and SEO content. Valyu Network tokenizes data used to train AI models, creating a system to license and trace provenance to address so-called copyright abuse.
Founders said they came to a16z partly for its internal crypto engineering expertise, and partly for its resources and connections. Like any accelerator, they needed help designing product elements and legal or regulatory advice. But they also sought a16z’s relationships in the crypto ecosystem—to introduce potential hires, policymakers, and other investors. At the start of the program, startups were grouped and assigned an a16z partner as mentor, leading sessions some founders called “group therapy.” “A self-selecting aspect of being in an accelerator is admitting you need help—and wanting experienced people to give it,” said a16z partner Elizabeth Harkavy, who mentored one group. “It’s very hard to work with founders who can’t ask for help.”
a16z’s continued commitment to crypto, even as other generalist firms pulled back, is itself a draw for crypto founders. Over the past year, beyond the CSX cohort, a16z has added nine new crypto startups to its portfolio, joining existing ones like Coinbase and OpenSea. “Roux is both consumer-focused and crypto-native,” said Lisa Grimm, Roux’s co-founder and serial restaurateur. “For us, finding partners who understand that balance is critical. a16z clearly does.”
Despite millions owning crypto in some form, crypto-based applications have failed to gain real traction beyond transactions. But Dixon claims the technology is nearing an inflection point. Infrastructure advances, he says, are making crypto networks faster and transaction fees lower, enabling cheap experimentation that could yield applications with clear utility and broad appeal. “Imagine if in 2006, every time you clicked someone’s Facebook profile, you had to pay a dollar. It just wouldn’t work,” Dixon said. “At that magical moment, [crypto transaction fees] become so low you can subsidize users, making it effectively free.”
Though this latest batch of CSX founders may be among the first to benefit from that “magical moment,” they’re entering the market when the technology faces skepticism and its potential remains unproven. One startup said they’ve already encountered doubt when mentioning the technology behind their product during conversations with potential customers. “There’s a chicken-and-egg problem here—the cohort has to navigate that,” Dixon said. But he hopes these founders can help shed crypto’s stigma.
Dixon doesn’t know how long the process will take. “But at least now it feels like we’re in the right maze of thinking,” he said, “because you can do things now that were impossible before.”
On the final day of CSX in June—the demo day—founders would pitch briefly to a room full of investors. a16z chose a sleek underground venue on the edge of Soho, typically used for live music and club events. A mezzanine balcony overlooked a floor space ringed by neon lights from floor to ceiling. Up front, a cinema-sized screen and sound system framed a stage where founders would present.
When I arrived, electronic music thundered. In the back, a founder was pitching his project to a coat-check attendant, who responded with a polite smile. Those leaving presentations to partners gathered at the bar; others scouted investors to chat with.
An announcement over the speakers prompted everyone to take their seats. One investor joked, “Seating’s arranged like a talk show comedy club.” After opening remarks from Dixon and Rosenthal, the pitches began.
Each founder had a few minutes. As one presented, the next would step to the side of the stage, clip on a mic, and take a deep breath. One founder said the waiting was the worst part. A few of the youngest founders recited their lines too mechanically, but most delivered with confidence. They were clearly instructed to simplify technical terms into memorable soundbites likely to stick with potential investors. Caspar Barnes, co-founder of AminoChain, pleaded at the end of his talk: “Join us in building trust for science and medicine.”
As founders pitched, investors took notes beside them. Some nodded approvingly or whispered behind their hands. During breaks, they joked about scrambling to grab shares in the most promising startups. Roughly forty investors attended in person, representing firms like Accel, Foundation Capital, and Amex Ventures.
Many founders hoped to raise funds after demo day. Rosenthal said, as with past CSX cohorts, a16z expects to invest further in some companies, but others will need to find alternative paths.
The real “chase” happened afterward, in a rooftop cocktail lounge styled like a traditional Chinese courtyard. By the time I arrived, it was packed. The most confident founders were already shaking hands and introducing themselves beneath blooming cherry trees; others seemed less sure, either sticking together in pairs or wandering the room with drinks in hand. I didn’t envy them.
The scene reminded me of something Rosenthal said at the start of the program: “Most people probably shouldn’t start companies, because it’s hard—it sucks. Man, if there were a way around that, I’d love to know. But I haven’t found one yet.”
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