​​​​Andreessen Horowitz is leaving venture capital 😱

Soon, Andreessen Horowitz will no longer be a venture capital fund—at least in a legal sense. In a recent profile, Forbes reported that a16z is registering its firm as a financial advisor, and it seems like cryptocurrency is a core motivator.

For context, the SEC places a cap on how much of a VC's fund can be committed to investments that the SEC deems high risk—like cryptocurrency. According to Forbes, that limit is 20% and has been a source of great frustration for a16z, which has always been a strong believer in cryptocurrency.

Switching to be a registered investment advisor (RIA) will allow a16z to shed those limitations and put as much as it likes into crypto investments. Beyond crypto, the firm will be able to invest in a variety of markets where VCs typically face legal limitations, including real estate and publicly traded companies. The trade-off it faces is the cost of compliance. Bob Raynard, CEO of Standish Management, a company that provides specialized fund administrative services, told TechCrunch, “If Andreessen Horowitz is becoming an RIA, its cost structure just went way up.”

The move is in keeping with a16Zz's commitment to cryptocurrency. The firm was an early investor in Coinbase, and just last year, it launched a $350 million dollar crypto-dedicated fund called a16z crypto. The fund's site features the following promise: “We plan to invest consistently over time, regardless of market conditions. If there is another 'crypto winter,' we’ll keep investing aggressively.”