A16z's foundational belief is that founders, not hired "professional CEOs," should lead their companies long-term. The firm is structured as a network of specialists to provide founders with the knowledge and connections they lack, enabling them to grow into the CEO role and succeed.

A16Z's transformation from a small, generalist partnership to a large, specialized firm was a deliberate answer to a fundamental industry problem: the traditional partner model doesn't scale for deploying capital and making decisions in today's massive, professionalized venture market.

To maintain agility and deep expertise at scale, Andreessen Horowitz restructured into independent, specialized teams for sectors like bio, crypto, and AI. Each sub-team operates like the original firm, preventing large, unproductive group decisions and enabling focused expertise.

While overall venture fundraising has declined, a16z's massive new fund highlights a market bifurcation. Large, established platform funds continue to attract significant capital and consolidate power, while smaller and emerging managers find it increasingly difficult to raise money.

Contrary to the belief that smaller VC funds generate higher multiples, a16z's data shows their larger funds can outperform. This is driven by the massive expansion of private markets, where significant value is now created in later growth stages (Series C and beyond).

In venture capital, mid-sized generalist funds struggle to compete. They lack the scale and network of large generalists and the deep expertise of small specialists. This 'death of the middle' makes it difficult for them to win the best, most competitive deals against firms that can offer either breadth or depth.

A16z's growth fund avoids traditional investment committees, which can lead to politicization and slow decisions. Instead, it uses a venture-style "single trigger" model where one partner can champion a deal, encouraging intellectual honesty and speed.

The venture capital landscape is bifurcating. Large, multi-stage funds leverage scale and network, while small, boutique funds win with deep domain expertise. Mid-sized generalist funds lack a clear competitive edge and risk getting squeezed out by these two dominant models.

David George of Andreessen Horowitz reveals that contrary to the belief that smaller funds yield higher multiples, a16z's best-performing fund is a $1B vehicle. This success is driven by capturing enough ownership in massive winners like Databricks and Coinbase, demonstrating that fund size can be an advantage in today's market where value creation extends into later private stages.