Original Author: Old Yuppie

This article is from the WeChat public account Laoyupi (ID: laoyapi), reprinted and published by Odaily with authorization.

Original Author: Old Yuppie

This article is from the WeChat public account Laoyupi (ID: laoyapi), reprinted and published by Odaily with authorization.

The a16z veteran has made a name for himself making big bets on Coinbase and OpenSea. Her new venture is expected to be Web3's largest fund raised by a single female venture capitalist.

Haun said her seven-person company was already stretched beyond capacity.

Katie Horne walks me through her art collection. Conveniently, the visit doesn’t require a trip to a gallery, or even her home — Haun’s medium of choice is NFTs, so we’re browsing her full catalog of digital images on her phone. These digital collectibles are stored on a blockchain, like cryptocurrencies, and are currently a hot commodity in Haun's tech industry.

She scrolls through lush floral imagery and edgy cyberpunk-inspired avatars (“My collector tastes are very diverse,” admits Haun), looking for one of her favourites. While some of the hottest creations on the booming NFT market have sold for tens of millions, this pixelated graphic of a girl with pink pigtails didn't cost her a penny. A birthday present. She received it from her friend Elena Silenock late last year. Notably, Sirenock is the wife of Andreessen Horowitz's Chris Dixon. Horn has been a partner in the firm’s cryptocurrency fund since he left his job at the Justice Department to pursue venture capital.

But while the pink-haired girl may be etched into the blockchain forever, the connection between real humans is much more malleable. Case in point: The reason Horn and I are here is to talk about the blockbuster announcement that she is leaving Dixon and the mighty Anderson firm to launch her own fund."While the average American may not know her, she has unexpectedly become a rock star in the cryptocurrency and wider Web3 space. Web3 includes not only NFT and currencies such as Bitcoin and Ethereum, but also the underlying blockchain infrastructure that supports these currencies. When she dabbled in the field in 2013, she wasn't interested in cryptocurrencies at all—in fact, she was a federal prosecutor in San Francisco investigating how cryptocurrencies were being used for criminal activity."

"I didn't choose this assignment," said Haun, whose previous legal work also included prosecuting white-collar criminals, prison gangs and corrupt federal agents.

However, I did choose to stay in this field.

Andreessen Horowitz, also known as a16z, is one of the largest and best-known venture capital firms in Silicon Valley. Founders Marc Andreessen and Ben Horowitz were early believers in Web3 at a time when many VCs were hesitant to invest in cryptocurrencies. They saw in Horn the expertise they needed but few had: the ability to navigate the complex regulatory environment that had grown alongside the then fledgling cryptocurrency industry.

The former prosecutor signed on as the firm's first female investment partner. Along with a16z partner Dixon, she co-founded and leads a cryptocurrency team of about 50 people whose last fund totaled a staggering $2.2 billion. It didn’t take long for the former industry layman to become one of a16z’s most high-profile partners, with investments in popular companies such as cryptocurrency exchange Coinbase and NFT marketplace OpenSea.

The announcement in mid-December that she was leaving a16z to start a brand new company sent a barrage of signals — celebrations, exclamations, and questions. It was a big deal, and sources said Haun was planning a $1 billion fund. If she succeeds, it would be the largest cryptocurrency fund ever raised by a female venture capitalist alone. “There aren’t many women in crypto,” said Amy Wu, head of FTX Ventures, who herself was just tapped to invest in the cryptocurrency exchange’s $2 billion fund, which launched in January. In fact, not many women write VC checks; women VCs hold just 15.4% of general partner positions in the U.S.

Now, the former prosecutor faces a new challenge. After four years at a16z, she has a rising profile, well-connected and strong investment performance. But she also left behind the deep pockets, enviable resources and prestige of a company of more than 300 people. Haun and her team of six had a very different proposition for the founders. Her new company will enter a world that oscillates between frivolous gold rushes and nauseating corrections—like the one we're in right now. Is Horn 2.0 capable of surviving this turmoil and getting the founders under contract?

Haun and I first sat down on a January morning at the Rosewood Hotel in Menlo Park, a short walk from her old office at a16z. We sat on an outdoor patio with a stunning view of the Santa Cruz Mountains. We were the only customers at the usually bustling hotel, a hangout for the many venture capitalists working in the area. That makes sense: Omicron infections are proliferating in the Bay Area and elsewhere. Even when the place is packed with VCs, as it usually is, Haun stands out. She has blond hair and deep blue eyes, and I've never seen her wear anything with the Arc'teryx or Patagonia logos—the signature pseudo-leisure brand of choice for Sand Hill passers-by. Today, Haun arrived in a black and white polka-dot dress. The last time I saw her, she was wearing a pale pink Valentino suit with a belt.

She has that elusive quality of being able to talk to anyone, whether it's in a boardroom or a courtroom. She can be very persuasive and has a lot of perseverance. But she's also charming, even talking about her new company with excitement and vertigo.

"Haun is raising at least $1 billion for her initial fund, people close to her new venture say. Haun would not confirm the figure, saying she was barred from commenting for "legal and regulatory reasons," a standard response from VCs raising money for fear of angering the SEC. But given the massive amount of money pouring into cryptocurrencies, $1 billion seems like a feasible, even conservative figure. Venture funding in the U.S. reached a record $128.3 billion last year, according to the latest data from PitchBook. And the share of that money going to cryptocurrency funds is growing rapidly, from less than half a percent in 2017 to nearly 7 percent last year. As soon as the VCs put their money in, their own investors, the limited partners, swoop in to replenish their coffers. Combined with Haun's proven ability to get involved in the hottest cryptocurrency trades, it bodes well for her. The fact that she started small and only focused on cryptocurrencies? It may also work in her favor."One of the things I've learned at the company over the past four years is that I'm actually an entrepreneur. Now is the time for me to get out there. It's that simple. — Katie Horne"Ilya Fushman, partner at venture capital firm Kleiner Perkins, said:"

True crypto-native funds are very attractive to LPs."This is because these investors are able to attract exciting new founders.

Haun is seizing his moment. Her new venture has made seven investments, including an undisclosed amount in Autograph, a Los Angeles-based startup that helps athletes and entertainers launch and market NFTs. Fushman's firm co-led the round, and both he and Haun will serve on Autograph's board of directors. (Fun fact: The startup also has the backing of Tampa Bay Buccaneers quarterback Tom Brady). But guess which other VC firm co-led the $170 million round? Dixon of A16z also joined the board. While that might be hard to believe -- there's always a certain level of tension in any breakup -- both parties insist Haune's breakup with her former employer was amicable. She says her work at a16z has been productive. She credits the company's founders with giving her a chance.

Not many people think, 'Oh, she's going to make a good VC,'" Haun said."But Haun said her experience working with founders has changed her view of what she wants. "One of the things I've learned over the last four years at the company is that I'm actually an entrepreneur," she said. When a16z's third dedicated crypto fund was fully deployed last year, it was a natural moment to move on. "Given that we're at this inflection point, it's caused me a lot of soul-searching," she said. "It's time to step out on your own. It's as simple as that.""Haun pointed to a patio near where we sat. She said that just last month, she and Dixon were there to discuss the details of her departure, such as how many people she could take with her. (One insider referred to these negotiations as

horse changing meeting

. ) Ultimately, it was agreed that Horn would leave with six a16z members, including her chief marketing officer, Rachel Horwitz, and her new company's head of global policy, Tomika Thielemann. The company also decided that a16z would be an early investor in her new fund. No doubt Horn's company will compete with a16z for some deals, but as an investor in her new venture, her former employer will certainly benefit no matter who wins. Beyond that, both Haun and a16z said they plan to continue working together, as they just did with Autograph.

“We talk frequently about promising projects and teams in the space and continue to work together on several boards,” Dixon said in a written statement provided to Fortune, “so we will continue to work closely together. "

Dixon's reluctance to speak directly to me, despite repeated pleas, suggests a divergence between a16z's strategy and that employed by Haun. As you might expect from a former prosecutor — a job that often involves trying to use the media to advance your case — Haun has been in the spotlight, giving interviews, and becoming a regular at tech conferences (she was Speak at three Fortune events). At the same time, A16z's attitude towards the media has become more indifferent - co-founder Marc Anderson is notorious for blocking journalists on social media platforms, and he even started his own internal content operation, avoiding journalists entirely."You know who else hates the media the most? Celebrities. (The old yuppie, who has been in the media industry for many years, typed this line calmly)"But that didn't stop Mindy Kaling from summarizing her first impressions of Sean to reporters:

Kaling told me by email that she is an actress, writer and producer, probably best known for her role on The Office.

Kaling met Haun last fall at a dinner in Los Angeles attended by a group of women in the entertainment industry. One of the purposes of the meetup was for Haun to share her knowledge of the cryptocurrency world with the group, some of whom were interested in dabbling in Web3. (Gwyneth Paltrow, who also attended the meeting that night, later announced her investment in bitcoin miner TeraWulf, according to people familiar with the matter.)

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With Supreme Court Justice Anthony Kennedy in 2004. She clerked for the justice from late that year until 2005.

One of the ways Haun plans to differentiate itself from competitors is to focus on "verticals," bringing in expert advisors for each. She named Jared Cohen, a former Google executive, and William Frentzen, a fellow prosecutor, to represent technology and government policy, respectively. When she needed an entertainment consultant, she called Kaling.

“I think I said yes before she even finished asking her questions,” Kaling said. “She’s a legend in the crypto community, and who wouldn’t want to be with her?”"Haun's plan also includes some notable changes to the fund she co-manages at a16z. Compared to the firm's sheer size, "we want to be nimble, so our team is small," she said. While a16z is known for providing a range of services from marketing to legal to companies in its portfolio, But Haun said she plans to take a more focused approach to establishing what her company can and cannot do for founders."For Haun, a small but targeted approach is not incompatible with globalization. She said she plans to look for startups far from typical centers like Silicon Valley. “I think some of the best crypto founders are going to be spread across the globe,” Haun said. “So I think that’s one of the things my company is going to do, is be more and more global.” (A16z said its Most cryptocurrency portfolio companies are

settle down"KRH"in the United States, but many of these companies have employees spread across the world. )"And of course, there's the name. So far, Horn has named her new venture", meaning Kathryn Rose Haun. But the investor said it was just a placeholder for legal documents. "I don't want to rule anything out, but I don't believe I'll be named after myself,"

Horn told me.

I'm building a franchise and I believe that, one day, someone else will take over.

As a venture capitalist, it's hard to quantify Haun's success. This is partly due to the nature of work in the industry - many investments don't pan out, and those that do often take 10+ years to "exit", that is, go public or be acquired. Over the past four years, Haun and a16z's crypto team have made more than 60 investments. So far, only one cryptocurrency exchange, Coinbase, has exited the market through a direct listing last year at a valuation of nearly $100 billion. While Coinbase was Haun's first job as a cryptocurrency insider -- the startup invited her to join their board of directors after she left the U.S. Department of Justice in 2017 -- it was actually long before Haun joined the company. , a16z made an initial investment in the company back in 2013."

That said, the companies she backs have seen spectacular growth in valuations, perhaps the most commonly cited metric of success until a startup exits. For example, OpenSea has become a major market for NFTs; last year alone it was worth $1.5 billion, and now it is worth more than $13 billion.

“She’s a heat-seeking missile,” said Jesse Varden, a former a16z investor who also left the firm in 2020 to start his own cryptocurrency fund. “She knows where the space is going and who you need to know if you’re going to be there. As an investor, that’s a superpower.

She is a heat-seeking missile. She knows where the space is going and who you need to know if you're going there.

Jesse Varden, former a16z investor and founder of VARIANT FUND"

"That's what I've been doing for over a decade," she said, referring to her previous career as a federal prosecutor. "I make deals, I negotiate, I'm sitting across from the other side of the table, and I have to figure it out quickly.

"Katie is the OG," said Royal co-founder and CEO Justin Blau. Royal is a service that lets musicians sell royalties to fans, and Haun invested in the company when he was at a16z. “Because she’s been so active in the space for so long, her relationships not only extend beyond the crypto companies but extend far beyond the crypto community.”

image description"Haun and Dixon at the a16z team dinner after Dixon announced that she was leaving."Emily Choi, Coinbase's chief operating officer, recalled how Haun stepped in when another potential board member was considering a job at another company. According to Cui, Haun took the person out to lunch, sat them down, and told them they would be crazy not to join Coinbase. This works great."She knows what to say to really make a difference,"

Choi said.

And she leaves no stone unturned.

At a16z, Haun was involved in building the cryptocurrency team, which grew from two members to about 50 in four years. Over the years, she said, she recruited "the majority" of her team. (Dixon said in an email: "Hiring is a team effort, and Katie is a big part of the team.")

Haun needs to continuously introduce top talents to cope with the increasingly competitive crypto investment market. But she also needs to tap into the regulatory and legal knowledge that brought her to Silicon Valley's attention in the first place. Crypto may no longer be the unknown when a16z first knocked on the door, but it's still just as worrisome.

“Regulatory compliance is the most important topic in the cryptocurrency space this year,” said FTX Ventures’ Wu.

Outside threats aside, the meteoric rise of cryptocurrencies has also drawn criticism from the larger tech ecosystem. Startup founders such as Box's Aaron Levy and Airbnb's Brian Chesky are skeptical about the adoption and impact of Web3. There is growing concern within the crypto community that power is being concentrated by an elite few, especially the biggest startups, which rake in large amounts of cash from VCs. It's anathema to those who support Web3's promise to "decentralize" information control. In theory, Web3 spreads power in a way that the traditional web never did.

image description

Scenarios for Coinbase's 2021 IPO.

Haun's former company, a16z, has scathed naysayers, saying Web3 is young but will eventually deliver on its promise. Anderson also, as usual, blocked another technologist — Twitter founder Jack Dorsey. The pair previously sparred publicly over whether crypto companies should be decentralized or centralized.

Haun is taking a more diplomatic approach. "I think it's very exciting to see people like Moxie Marlinspike [a tech insider who is skeptical about Web3] and Jack Dorsey come into this space and provide nuanced critique," Haun said. "I welcome that."

But despite her contacts with critics, Haun said she is not disturbed by the cryptocurrency hype. Yes, the infrastructure isn't quite there yet, but it's on the way. At the same time, she said, the technology's potential has exploded. When she entered the investment world in 2018, most people believed that the only real meaningful area for cryptocurrencies was financial applications, Haun said: "What I learned is that there are many more use cases than we thought at the time."

Meanwhile, there are more pressing issues. In January, amid Horn's fundraiser, the cryptocurrency market crashed, wiping $1.4 trillion off its value. Some call it "massacre," others "correction." Haun isn’t worried, noting that volatility is nothing new to the space: “The very essence of running a cryptocurrency fund is taking risk.”

The structure of many cryptocurrency transactions — including the one Haun said she will be conducting with her new company — can be extremely risky. Unlike traditional venture capital, which exchanges equity for cash, many cryptocurrency investors receive so-called tokens as part of their equity. The tokens, which are essentially digital securities stored on a blockchain, face the same wild volatility as the broader cryptocurrency market.

For Haun, though, it's important to separate risk from uncertainty, which doesn't exist in her vocabulary.

Additional reporting by Jessica Matthews

Editor: A previous version of this story misreported Elena Silenok's last name. Fortune apologizes for the error.

secondary title

Arweave

Blockchain Stakes

Autograph

Haun has invested in some of the fastest growing and most promising startups in the cryptocurrency space. But the industry is so young that it hasn't crowned many winners and thrown out losers. Here are some of Haun's most notable investments and board seats to date.

Coinbase

The Berlin-based company says it is a pioneer in new forms of data storage that use blockchain technology to "store" information. Haun led a $5 million funding round in 2019 that was entirely token-based, meaning investors bought digital securities recorded on a blockchain rather than traditional stocks.

OpenSea

The NFT company co-founded by soccer star Tom Brady raised $170 million in January. Haun's new company (and her former employer, Andreessen Horowitz) participated in the round, and Haun has now joined Autograph's board of directors.

Royal

In 2017, Haun became the startup's first independent director. This move eventually led her to join a16z, an early investor in the cryptocurrency trading platform. In April last year, Coinbase went public at a valuation of nearly $100 billion, a rarity in the crypto industry.