Exclusive: Why star VC Katie Haun departed Andreessen Horowitz with an audacious plan to build a $1 billion crypto investing juggernaut

She scrolls through lush, floral images and edgier, cyberpunk-inspired avatars (“My collector taste is pretty varied,” Haun allows) in search of one of her favorites. While some of the buzziest pieces on the explosive NFT market have sold for tens of millions, this one, a pixelated graphic of a girl with hot-pink pigtails, didn’t cost her a penny—it was a birthday gift. She received it late last year from her friend Elena Silenok. Silenok, it’s worth noting, is also the wife of Andreessen Horowitz’s Chris Dixon, who has been Haun’s partner in the firm’s crypto fund since she left a job at the Justice Department to plunge into the world of venture capital.

But while the pink-haired girl may be carved into the blockchain forever, the connections between actual humans are more malleable. Case in point: The reason I’m here with Haun is to talk about the bombshell announcement that she’s leaving Dixon and the rest of the mighty Andreessen pack to launch her own fund.

While the average American might not know Haun, she’s become an unexpected rock star in crypto and the wider world of Web3, which encompasses not just NFTs and currencies like Bitcoin and Ethereum, but also the underlying blockchain infrastructure that supports them. She arrived on the scene in 2013 as anything but a crypto fan girl—in fact, she was a San Francisco–based federal prosecutor tasked with investigating how the technology was being used in criminal activity.

“I didn’t choose the assignment,” says Haun, whose prior legal work also included prosecuting white-collar criminals, prison gangs, and corrupt federal agents. “However, I did choose to stay in the space.”

That choice came in the form of an invitation from Andreessen Horowitz, also known as a16z, one of Silicon Valley’s largest and most well-known venture capital firms. A16z’s founders, Marc Andreessen and Ben Horowitz, were early believers in Web3 back when many VCs were still skittish about investing in crypto. They saw in Haun the kind of expertise they needed, but that very few had: the ability to navigate the complicated regulatory landscape evolving alongside the then-fledgling crypto industry. 

The former prosecutor signed on as the firm’s first female investing partner. Along with a16z partner Dixon, she cofounded and co-led a dedicated crypto team of about 50 people, whose last fund totaled an impressive $2.2 billion. Before long, the former industry outsider had become one of a16z’s most high-profile partners, making investments in buzzy companies like crypto exchange Coinbase and NFT marketplace OpenSea. 

Her mid-December announcement that she was leaving a16z to build an entirely new firm sent volleys of text messages—congratulations, exclamations, questions—around Silicon Valley. It’s a big deal, made even bigger by the fact that sources say Haun is targeting a $1 billion fund, which, if she succeeds, would be the biggest crypto fund ever raised by a solo female VC. “There aren’t that many women in crypto,” says Amy Wu, head of FTX Ventures, who herself was just brought in to invest a $2 billion fund the crypto exchange launched in January. Indeed, there aren’t many women writing venture checks at all; female VCs hold just 15.4% of general partner positions in the U.S.

Now the former prosecutor is on the precipice of a new challenge. She leaves her four years at a16z with a soaring profile, a wealth of connections, and a strong investing track record. But she also leaves behind the 300-plus-person firm’s deep pockets, enviable resources, and prestige. Haun and her scrappy six-person team offer founders a very different proposition. Her new firm is launching into a world that toggles between headlong gold rushes and stomach-churning corrections—like the one we’re in now. Will Haun 2.0 have what it takes to survive that volatility and get founders to sign on the dotted line? 

Haun and I first sit down on a crisp January day at the Rosewood hotel in Menlo Park, just steps away from her old office at a16z. We’re seated on an outdoor patio, a majestic view of the Santa Cruz Mountains before us. We’re among the only patrons at the normally bustling hotel, a convenient meeting spot for the many venture capitalists who work in the area. It makes sense: Omicron cases are surging in the Bay Area and elsewhere. But even if the place were as VC-packed as it usually is, Haun would stand out. She’s got blonde hair and piercing blue eyes, and I’ve never seen her wear anything with an Arc’teryx or Patagonia logo—the signature pseudo-casual brands of choice for the Sand Hill Road set. Today, Haun has arrived in a black-and-white polka-dot dress. The last time I saw her, it was a pale pink, belted Valentino ensemble.

Haun is polished, but not reserved. She’s got that hard-to-pin-down quality of being able to speak to anyone, be it in a boardroom or courtroom. She can be persuasive, and persistent. But she’s also disarming, talking about her new firm with excitement—giddiness, even. 

Sources close to her new venture say Haun is raising at least $1 billion for her inaugural fund. Haun won’t confirm the figure, saying she is prohibited from commenting for “legal and regulatory reasons,” a standard response from VCs raising funds and wary of provoking the ire of the SEC. But given the money gushing into crypto, $1 billion seems like a doable and even conservative figure. According to recent data from PitchBook, venture fundraising in the U.S. hit a record $128.3 billion last year. And the share of those dollars going to crypto funds is growing fast, from less than half a percent in 2017 to nearly 7% last year. As quickly as VCs are handing out money, their own investors, the limited partners, are swooping in to refill their coffers. That, coupled with Haun’s proven ability to get in on the buzziest of crypto deals, bodes well for her. The fact that she’s starting small and only focused on crypto? That could work in her favor too. 

One of the things I learned in the last four years at the firm is I’m actually an entrepreneur. It was time to go out on my own. It’s pretty much that simple.

Katie Haun

“Truly crypto-native funds are highly attractive for LPs,” says Ilya Fushman, a partner at VC firm Kleiner Perkins. “That’s because these investors are able to attract exciting, new founders.” 

Haun is seizing the moment. Already 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. (Fun fact: The startup was also backed by Tampa Bay Buccaneers quarterback Tom Brady.) But guess which other VC firm co-led the $170 million round? A16z, with Dixon also joining the board.

Hard as it may be to believe—there’s usually a certain amount of tension in any divorce—both parties insist Haun’s split from her former employer is amicable. She describes her time at a16z as formative and fruitful. And she credits the firm’s founders for taking a chance on her. “Not many people would have thought, ‘Oh, she’ll make an excellent VC,’ ” says Haun.

But Haun says her experience working with founders has shifted her perspective on what she wants. “One of the things I learned in the last four years at the firm is I’m actually an entrepreneur,” she says. When a16z’s third dedicated crypto fund was fully deployed last year, it was a natural moment to move on. “Given that we were at this inflection point, it caused me to do a lot of soul searching,” she says. “It was time to go out on my own. It’s pretty much that simple.” 

Haun points to a section of the patio near where we’re seated. That’s where she and Dixon hashed out the details of her departure just last month, she says, discussing things like how many people she’d be allowed to take with her. (One insider referred to those negotiations as a “horse-trading session.”) Ultimately, it was agreed that Haun would leave with six a16z-ers, including Rachael Horwitz, her chief marketing officer, and her new firm’s head of global policy, Tomicah Tillemann. It was also decided that a16z would become an early investor in her new fund. Haun’s firm will undoubtedly compete with a16z for some deals, but as an investor in her new venture, her former employer stands to benefit regardless of who wins. Beyond that arrangement, both Haun and a16z contend that they plan to continue partnering on deals, like the one they just did with Autograph. 

“We’re in regular conversation about promising projects and teams in the space, and remain on several boards together,” Dixon said in a written statement provided to Fortune. “So we’ll continue to collaborate very closely.”

Dixon’s reluctance, despite multiple requests, to talk to me directly is an indication of a divide between the a16z strategy and one Haun has employed. As you might expect from a former prosecutor—a job that often entails attempting to use the press to advance your case—Haun has embraced the spotlight, doling out interviews and becoming a regular on the tech conference circuit (she’s spoken at three of Fortune’s events). A16z, meanwhile, has become chillier toward the media—cofounder Marc Andreessen is notorious for blocking journalists on social media platforms—going so far as to start their own internal content operation, sidestepping reporters altogether.

You know who else typically finds the press irritating? Celebrities. 

But that isn’t stopping Mindy Kaling from summing up her first impression of Haun to this reporter: “She’s a venture capitalist I would actually like to vacation with,” Kaling, the actress, writer, and producer probably best known for her role on The Office, tells me via email.

Kaling met Haun at an L.A. dinner in the fall of last year attended by a group of women in the entertainment world. One of the purposes of the gathering was for Haun to share her knowledge of the crypto world with the group, some of whom were interested in dipping a toe into Web3. (Gwyneth Paltrow, who has since announced an investment in Bitcoin miner TeraWulf, was also in attendance, according to a source familiar with the evening.) 

One of the ways Haun plans to distinguish herself from the competition is to focus on “verticals,” bringing on expert advisers for each. She tapped Jared Cohen, CEO of Google think tank and incubator Jigsaw, and fellow former prosecutor William Frentzen, to represent technology and government policy, respectively. And when she needed an entertainment adviser, she called Kaling.

“I think I said yes before she finished the question,” says Kaling. “She’s a legend in the crypto community, and who wouldn’t want to be around that?”

Haun’s plans also include some notable changes from the fund she co-ran at a16z. In contrast to the massive scale of that firm, “we want to be nimble, so we’re keeping our team kind of small,” she says. And while a16z is known for offering its portfolio companies a suite of services ranging from marketing to legal, Haun says she plans to take a more targeted approach to building out what her firm does and doesn’t do for founders. 

For Haun, small and targeted isn’t at odds with global. She says she plans to search for startups far from the typical hubs like Silicon Valley. “I think some of the best crypto founders are going to be found all over the globe,” says Haun. “So I think that’s one of the things my firm will do, is increasingly have this global focus.” (A16z says the majority of its crypto portfolio companies are “domiciled” in the U.S., though many have employees spread around the world.)

Then, of course, there’s the name. So far, Haun has labeled her new venture “KRH,” for Kathryn Rose Haun. But the investor says it’s just a placeholder for legal documents. “I don’t want to rule anything out, but I don’t believe I will name it after myself,” Haun tells me. “I’m building a franchise that I’m sure, someday, others will take over.” 

It’s hard to quantify Haun’s success as a VC. It’s partly the nature of the job—many bets don’t pan out, and those that do typically take upwards of 10 years to “exit,” meaning go public or get acquired. Over the past four years, Haun and a16z’s crypto team made more than 60 investments. Only one of them has had an exit so far: Coinbase, the cryptocurrency exchange platform that went public via a direct listing with a valuation of nearly $100 billion last year. And while Coinbase was Haun’s first gig as a crypto insider—the startup asked her to join their board after she left the DOJ in 2017—a16z actually made its initial investment in the company back in 2013, well before Haun joined the firm.

That said, the companies she’s backed have seen ridiculous growth in valuation, which, until a startup exits, is probably the most commonly cited metric of success. OpenSea, for example, has become the dominant marketplace for NFTs; valued at $1.5 billion just last year, it’s now worth more than $13 billion. 

“She’s a heat-seeking missile,” says Jesse Walden, a former a16z investor who in 2020 also left to form his own crypto fund. “She knows where the space is going and knows the people you need to know if you’re going there too. It’s a superpower as an investor.” 

She’s a heat-seeking missile. She knows where the space is going and knows the people you need to know if you’re going there too.

Jesse Walden, former a16z investor and founder, Variant Fund

Indeed, finding the right people, and getting them to say yes, seems to be a big part of Haun’s achievements so far. And at her new firm, she plans to put that superpower to use, building out her own team, helping her portfolio companies build theirs, sourcing deals, and, of course, closing them.

“That’s what I did for a living for over a decade,” she says, referring to her prior career as a federal prosecutor. “I made deals, I negotiated, I sat opposite someone on the other side of the table that I had to suss out quickly.”

“Katie is the OG,” says Justin Blau, the cofounder and CEO of Royal, a service that lets musicians sell royalty ownership to their fans, which Haun invested in while at a16z. “Because she’s been so active in the space for such a long time, her relationships extend not only across the spectrum of crypto companies, but also far beyond the crypto community as well.”

Emilie Choi, the chief operating officer of Coinbase, recalls how Haun stepped in when another prospective board member was thinking about taking a position at a different company. As Choi tells it, Haun took the person out to lunch, sat them down, and told them they’d be crazy not to join Coinbase. It worked. “She knows what to say that’s actually going to make the difference,” says Choi. “And she’s relentless.”

At a16z, Haun was instrumental in building out the crypto team, which grew from two to about 50 in four years. She says she recruited the “majority” of team members over the years. (Dixon, via email, says, “Recruiting was a team effort and Katie was an important part of the team.”)

Haun will need to keep bringing in top talent in order to navigate the increasingly competitive market for crypto investing. But she’ll also need to tap that regulatory and legal knowledge that brought her to the Valley’s attention in the first place. Crypto may no longer be the unknown it was when a16z first came knocking, but it’s still just as fraught—if not more so. 

As crypto expands globally, so do its challenges and controversies. Last year, China made waves when it banned cryptocurrencies, and other countries have restricted their use over fears that they could disrupt national control of existing monetary systems. And there’s another concern brewing: Some digital currencies are notoriously energy-intensive, leaving behind a mammoth carbon footprint. This issue was front and center at a U.S. House Energy and Commerce Subcommittee hearing on Jan. 20, where members of Congress debated how to make cryptocurrencies more environmentally friendly. 

“Regulatory compliance is the most important topic in crypto this year,” says FTX Ventures’ Wu. 

In addition to external threats, crypto’s wildfire growth has also drawn its share of critics from the larger tech ecosystem. Startup founders like Box’s Aaron Levie and Airbnb’s Brian Chesky have expressed skepticism about the adoption and impact of Web3. And there are growing concerns within the crypto community that power is being pooled by an elite few, specifically the biggest startups, flush with cash from VCs. That’s anathema to those who’ve backed Web3 for its promise to “decentralize” the control of information, theoretically spreading power around in a way that hasn’t happened on the traditional web.

Haun’s former firm, a16z, has come down hard on naysayers, arguing that Web3 is young but will ultimately deliver on its promises. Andreessen, true to form, even blocked another techie, Twitter founder Jack Dorsey, after the two publicly beefed over whether crypto companies were truly decentralized or centralized. 

Haun is taking a more diplomatic approach. “I think it’s very exciting seeing people like Moxie Marlinspike [a tech insider who has expressed doubts about Web3] and Jack Dorsey coming into the space and offering nuanced critiques,” says Haun. “I welcome that.”

But despite her engagement with critics, Haun says she has no qualms about crypto living up to its hype. Yes, the infrastructure isn’t quite there yet, but it’s on its way. In the meantime, she says, the technology’s potential has exploded. When she entered the investing field in 2018, most people thought the only real area where crypto made sense was in financial applications, says Haun: “What I’ve learned is that, wow, there are so many more use cases than we imagined back then.” 

Meanwhile, there are more pressing concerns. In January, in the midst of Haun’s fundraising push, the crypto market tanked in a crash that scrubbed $1.4 trillion in market value. Some called it a “bloodbath” and others a mere “correction.” Haun was unfazed, pointing out that volatility is nothing new to the field: “The nature of running a crypto fund is taking on risk.” 

The very structure of many crypto deals—including the ones Haun says she’ll do with her new firm—can be extraordinarily risky. Unlike traditional VC investments, which take equity in exchange for cash, many crypto investors take so-called tokens as part of their stake. Essentially digital securities stored on a blockchain, these tokens face the same intense volatility as the broader cryptocurrency market.

For Haun, though, it’s important to separate risk, which comes with the territory, from uncertainty, which isn’t in her vocabulary.

“Like many things in my career, I think things are either a ‘hell yes’ or ‘no.’ When I joined Andreessen Horowitz when I was offered a job, it was hell yes. And when I decided to spin off it was a hell yes. And many other moments in my legal career before that. And I’ve always been someone who followed my instincts, my gut instincts, and also just what my interests are, and this was really no different. Now, have I had moments in the last few weeks where I’m like, ‘What am I doing?’ Yes, absolutely. And yet, I’m super committed to it. And I know it was the right decision.” 

Additional reporting by Jessica Mathews

Editor’s note: A previous version of this story misstated Elena Silenok’s last name. It has also been updated to clarify Jared Cohen‘s title. He is CEO of Jigsaw.

Blockchain bets

Haun has invested in some of the fastest-growing and most promising startups in crypto. But the sector is so young that it has yet to crown many winners—or dethrone its losers. Here are some of Haun’s most high-profile investments and board seats to date.

Arweave

The Berlin-based company says it is a pioneer in a new form of data storage that utilizes blockchain technology to “house” information. Haun led its $5 million funding round in 2019, which was entirely token-based, meaning investors bought into digital securities, recorded on a blockchain, instead of traditional equity. 

Autograph

The NFT player, cofounded by football star Tom Brady, raised $170 million in January. Haun’s new firm (as well as her former employer, Andreessen Horowitz) participated in the round, and Haun has now joined Autograph’s board.

Coinbase

Haun became the startup’s first independent director in 2017. The move ultimately led to her joining a16z, which was an early investor in the cryptocurrency exchange platform. Coinbase went public at a valuation of nearly $100 billion last April, a rare exit in the crypto industry.

OpenSea

One of the buzziest startups in the fast-growing NFT market, OpenSea is currently valued at more than $13 billion. Haun led two financing rounds into the company while at a16z and joined OpenSea’s board. She invested again via her new firm, contributing to the auction platform’s massive $300 million Series C round in January. 

Royal

Another of Haun’s investments while at a16z, Royal lets musicians sell royalty ownership to their fans, a new application for NFTs. Among other VC firms, artists like the Chainsmokers and Nas also joined Royal’s $55 million Series A round of funding last year.

This article appears in the February/March issue of Fortune with the headline, “Crypto’s new kingmaker.”