Jen Kha on a16z's $15B raise: oversubscribed in 3 months, LPs refused to exit Stripe and Databricks positions even amid liquidity crunch

Lightning round with Andre Horow. It's celebrating their $15 billion fund raise. We have Jen Ka in the reream waiting room. Let's bring her in to the TVPN Ultra Dome. How are you doing, Jen? Good to see you.

Jen, what's happening?

Hey. Hey. What's happening, brothers?

Uh, not too much. You're off to a banger start of the year. Congratulations. Uh, break it down for us. What happened? We knew we'd need a bigger gong for you guys in particular this year.

Maybe we have to distribute the gong hits across the four injuries and Horowits uh partners that we're talking with. We'll see.

You know what I have to say?

There we go.

There you go. Wait, what does it say? What does it say on it?

It says it's time to build, baby.

I love it. I love it. That's fantastic.

There we go. You probably been hitting that a lot. Do you do you do you just do like one hit every time you get off an LP? You got a new commit. Just a a light tap. You probably had to do a few of them to get up to 15.

Exactly. It's not quite your 80inch one, but you know, next time I'll get a horse and we'll call it even.

There we go. Uh, how was how was uh how was how are the LP pitches uh going into this fund raise different than in previous years? The markets evolved, technology has evolved, and Horowitz has evolved. uh what were you saying that you felt like it was the first time you were saying to LPs this time around?

Yeah. So, so let me first break down. So, $15 billion huge headline. Uh the number is huge. But, you know, I I first I should foremost say I normally don't respond to online rumors, but I feel the need to do so at this moment that $15 billion is not for the Nepal or Himalayan or Greenland, right? Let's spell that right now.

You you know people tease things all the time. little little little breadcrumbs in the releases. I'd like to see an American Everest. I feel like I've heard the pitch for Greenland, the moon, the moon might be American at some point. It already is in many ways. Maybe Everest, but you know, you're putting it in startups. You're putting in technology.

Exactly. So, so hope springs eternal. So, so the prelim number, you guys covered this yesterday, but the prelim numbers for for NVCA came out to, you know, 66 billion. So that actually ended up being what would have been equivalent to 22% of of what was raised in in 2025 with the $15 billion. So

wait, so so does the 15 billion get included? Do they are they going to update the 2025 numbers or do they count it towards 2026 because it's actually being announced now?

Yeah, it's going to it's going to get counted for 2026. So that that is that is forward. So we're closing our fund today. So that would be 2026 numbers. Yep.

Cool. Um and so huge calling now VC winter maybe you know potentially over for some folks. uh uh but

fantastic

but the uh the sentiment to answer your question so the sentiment from LPs is different in so far as that we are now this is the next the second set of funds that we've raised in this AI super cycle

and so we were oversubscribed in 3 months you know it

was I think very clear for most people that AI is obviously taking over the world and particularly when LPs have conviction and also the right information, they will close quickly. So most funds, you know, the average VC fund takes probably close to over a year to fund raise. And the reality is it's it's a tale of two cities. If you have great companies, great performance, great DPI.

Yeah.

It's very very easy to raise capital.

Yeah.

Uh we are luckily in that camp. If you don't, it's just a lot tougher. And and by the way, let let me tell you also a story because it's related to on this liquidity topic that you guys um often times talk about and hear about from LPS. So, you know, there's a lot of belly aching from LPs about liquidity, but the reality is it's in select companies. So, we actually went through this whole exercise uh last year. So, this was in the middle of liquidity concerns and this was early days of of you know, the the administration stance on on endowment tax cuts. And, you know, we internally had this conversation said, gosh, you know, should we offer some liquidity particularly for some of our older funds um to our LPs? So we so we went around we called um all of our our LPs in those older vintages and specifically we had a stripe position seed position in fund one and then we had data bricks at the series A in fund three and we said hey you know we know you're in liquidity crisis would you be interested if we got you some liquidity in those names

and I'll tell you 30 out of 30 of those early L said absolutely not

like we want liquidity

you're telling me would I like to not ride my winners

exactly exactly so there's subtlety in that conversation which is like you know they want liquidity but they want liquidity not out of those names they want to ride those winners right they want to let them

unfortunate want liquidity the most from the from the from the assets or the companies that you're least

yeah excited about which is this paradox interesting interesting um yeah that that makes sense uh talk about the split of strategies going on at Andrew and Horowitz today I think a lot of people were curious about crypto not being included in this suite of funds Is that just a different cycle? Is that a mechanics thing? What what's going on there? Or is it truly like a completely separate thing and we'll be hearing about that later?

Yeah. So the so the latter so the funds that we raised and and announced today, it's five out of seven of our funds. So crypto is offcycle and then so is our games fund. Okay. So some more to come from that.

Got it. Okay, that makes sense.

Uh yeah. How how uh are are LPs up to speed on this kind of like structure now? You obviously don't have to go into a conversation explain Andre and Horowitz but uh most funds are not at the scale where there's like you know this multi- multiff fund approach is that like how much of the conversation is about like okay like I'm giving you uh capital where is it going to be actually allocated and how is it going to be split across the funds is it just straight proa uh across the different strategies and funds or how does that work?

Interesting. Yeah.

Yeah. So it's a that's a great question and in fact I think we're one of maybe the first who actually split our funds. Most most firms just have a generalist fund that everything's out of one vehicle

and we very early on preently realized we needed to decentralize as a firm and then also our funds as well to match that to the teams. And so if you look at any of the individual teams the deal teams are no bigger than you know four to six people.

Sure. And so we're kind of similar to smaller funds and smaller firms but with the breath of course of of you know the Andre and Horitz umbrella. And so for for LPs when they think about allocating to us most of them just say hey I want to follow you into all the different funds. Um and they allocate Pratta and in fact we actually set up a vehicle to to allow them to do that. Some folks pick and choose and our view is hey every single fund needs to stand on its own and it needs to earn zone keep from its LPs and sometimes those LPS might be different right? Some MPs for example internationally can't invest into certain strategies like crypto for example maybe American dynamism. So there's some there's some nuance there of which we we do uh account for.

Interesting. Yeah. uh how much uh how many questions are you getting from LPs about uh trying to predict the next next Andre strategy that might take place in this fund like Andre started as I mean you look back at the early like the fund one and it's basically a seed fund by today's standards growth was obviously added on then bio then crypto and then liquids tokens like there's so many different strategies that if you went back to the dawn of Andre you would say well that doesn't fit in fund mandate uh and and we've seen uh firms buy hospital networks and do more private equity style deals, more do more secondary deals. Are LPs looking for you to lock a strategy or are they leaving you with a lot of flexibility? Are they looking for guidance on what might happen in the next 10 years in terms of creative financial plays that you might be able to make?

Yeah. So, it's funny. Uh our first fund is funny you should say it's the size of a seed fund. The first deal we actually did was the buyout of Skype, which is there's a there's a good story uh around that we made, you know, 4x return in 18 months and the rest is history. But but you know, that that first

Yeah,

I always remember seeing that on Andre's uh website and it was like it wasn't a seed bet. It was this weird deal and but it still panned out really well and it was like a great logo to have on the on the portfolio page, but for peculiar reasons.

Yeah. And there was a bunch of risk in it because everyone was like, "Oh, you won't get the IP because of of eBay and blah blah blah." And then, you know, Microsoft ended up buying it. But, you know, the the and then there's a whole story there because a lot of our LPs, suffice to say, after raising a venture fund, we're like, "What are you doing?"

Y ended up working out. Nonetheless, you know, we we always talk about internally how, you know, the way the individual funds are set up now is almost in the incarnation of the original Andre Horitz from the size of the team, from the capabilities and resources on the operating front. And so you've got these, you know, kind of seven different funds and teams that are effectively the incarnation of that first Andreason horror. It's now replicated

and that's actually how you scale. We have 600 plus people at the firm now. That's the only way you could actually nimbley move without getting mired in the morass of of bureaucracy and and oftentimes what big organizations end up being. And so in some respects we don't necessarily we're not motivated by innovating into you know there's a lot of VC firms out trying their hand at private equity as you said buying hospitals um raising private credit strategies like that's not really of interest to us. I think you mentioned at one point like going public like as long as Ben is CEO we are not a public be a public company. Uh so we don't try to innovate on fund structure right we like boring vanilla VC

kind of returns and you give us money and we'll send you back and and uh where we'll take risk and and innovation is on the companies we invest into.

How much do you involve individual GPS in the fundraising process? Sounds like I mean a three-month process really not that long. Are you are you tapping them in at at key moments because certain LPs want to understand like really get to know uh the individual uh investors or are you like aggressively trying to protect their time because their time is really best spent with uh you know founders and actually evaluating and doing deals?

Yeah. And the so yes we try to protect our time but also at the same time like this is just like a company like a fund raise is a very important exercise and in fact you know a few years ago when people were asking whether we we would go away from the traditional fund structure you know Mark and Ben kind of like the concept of pressure testing our thesis every couple years right you got to go out to your LPs you got to prove to them that your thesis you know is worthy of their capital and then it pressures you also sorry for for my voice here it's a little horse uh because I've been shouting you know, you're watching too often.

Um,

like why are the why are deadlines now?

Exactly. Exactly. Um, no, but that that kind of sentiment of pressure testing your thinking is incredible. And it you guys know from fundraising, you know, with companies like you learn a lot through the course of that process as well. So, so all of our GPS get involved. All of them are in the meetings, you know, they're all talking to the LPS, they're shaking the hands, kissing the babies. They are front and center of it. Mhm. H how do you uh how do you realign the LPs from just endless AI questions and actually keep them interested in bio, healthcare, American dynism? Do you do you try and like have the AI narrative cut across everything or is it drowning out the rest of the stories that you're trying to tell? I think AI is similar to any platform shift where it's just going to infiltrate everything and it's like obviously in the zeitgeist, but eventually it's just going to go in the background just like cloud or

Yeah, there was there was that quote from Mark in in the launch video that was like someday in 10 years we won't talk about the internet because it'll just be everywhere and it feels like we're already uh I I like when companies uh I think this is the year where companies like maybe stop pitching AI as aggressively in taglines because you should just assume uh that a company is leveraging it to the fullest extent.

Yeah.

100%. Yeah. Yeah. What else are you doing like that?

100%. Uh but I I do think you know it's it's great too because I also think you know with this platform shift LPs can actually have a feel for how transformative this is themselves. So our entire for example fundra process we tried to take a AI native first approach. So we had an AI chatbot that was replicated. I was about to ask

in my in in in our data room, there was an AI gen in there. Um, you know, there's AI chatbot that was answering any question in any hour of the day.

Um, and then our LPs also are playing with these tools themselves as well in their underwriting and their diligence, but also even individually. I I'll uh I won't name the LP, but I was talking to an LP earlier this this morning who uh was playing around with Replet, and I was like, you got to try it. Like just just code something that you wish, you know, you had access to. and she's like, "Well, I really want to be able to code an app that can uh look at Pelaton classes and let me know when this instructor see I'm like trying to prompt it." And she was able to do it literally in the course of the morning. So, it's it's one of those things where I think these worlds are converging so quickly. It's also almost great that we're just all we're doing is testing and trying and iterating and for the first time LPS as users can actually see the real world visceral impact to how they run their day-to-day life. How uh what is what is general LP sentiment specifically around 2026? What are what are expectations? Obviously, we're expecting a slate of IPOs and that's uh very exciting if you've been in uh in these uh in these companies, these names for, you know, a decade or more at this point.

Yeah. Yeah, I feel like Elon dropped like an early Christmas present when he was uh it was like rumored to say that SpaceX might be going public in 2026 and everyone's like, "Oh, maybe we'll go public in 2026." So, I I do think sentiment and people are are generally positive. Um obviously, you know, we'll see where the IPO markets kind of turn out to be, but generally speaking, it's it's early. It's off to a good start. Like, we'll we'll see what happens. But I I do think people are expecting more capital this year in a way that once one breaks through, it's going to be a watershed moment that might even top, you know, 2021 in terms of the amount of liquidity coming back to folks.

That's going to be exciting. That's going to be exciting.

Was uh was 15 always the target or did you go out, you know, thinking that you do less and and uh and then you kind of upsized it based on demand?

Uh we had a range for our target. Um, and we try to, you know, kind of keep uh in that range just to to avoid, you know, upset.

We knew it was possible because if if Maso can do a hundred, it's like, come on, can can we can we can we do 15?

I won't I won't make that comparison. It is it is it is funny in retrospect, you know, that that vision fund, you know,

the whole thesis was Yeah. I looked I I completely blocked Vision Fund out of my head and uh and then I was like I I was researching before that. was like, "Okay, 15 billion has to be the biggest fund venture fund ever." And it was like, "Oh, no, of course fund."

Um,

anyway, uh, well, thank you so much for coming on the show. Congratulations on massive news and we will talk to you soon, Jen.

Incredible work.

Awesome. Great to see you again.

Catch you later.

Cheers.

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And thank you to the chat. Uh, there have been some updates to Claude's