May 28, 2022

holy smokeI

After reading a new post by business journalist Eric Newcomer, there was a collective backlash over these parts. To be honest, the numbers are staggering.

Please note that all of these companies are structured as registered investment advisors and thus are required to disclose information about their assets in accordance with the rules of the Securities and Exchange Commission.

For example, according to Newcomer, four-year-old crypto investment firm Paradigm Capital said in a public announcement from its investment advisor that its assets under management have increased to $13.2 billion. Did you guess this amount? We wouldn’t, although to be honest we wouldn’t have spent much time on it either. (We have a life to lead.)

What we knew before: Paradigm was founded four years ago by Coinbase co-founder Fred Ersham and former Sequoia Capital investor Matt Huang. (These four are young enough, that’s the way things are.) The couple, who currently care for about 50 people, recently closed their largest $2.5 billion fund late last year. It seemed like a lot of money when it was announced in November, but now it seems like there is less money.

What we haven’t fully considered is what Paradigm has done with companies that have grown in value in recent years, including Coinbase. Its market capitalization is currently $43 billion, but the market capitalization reached $85 billion when it started public trading last April, and since it was a direct listing, investors were free to sell immediately. Paradigm was the company’s second largest outside investor with an 11.4% share, which explains a lot. He is also an early investor in the Bahamas-based FTX Ventures, which was valued at $32 billion by private investors when it last raised money in January.

But wait, that’s not all.

If you had to guess how many assets Andreessen Horowitz (a16z) managed, how many assets would you guess? Maybe $25 billion? Turns out you’d be almost half wrong. Indeed, according to disclosures made by Newcomer, the 12-year-old company managed $54.6 billion in assets, according to disclosures made last week. That’s more than half of what he was running when he was last exposed. (Newbie doesn’t say when it was made – we’re still looking for it – but we suspect it hasn’t been around in over a year.)

how did it happen? With the Paradigm, the massive fundraiser played its part, but in the case of the a16z, the fundraiser played its part. many big role. Since 2012, the company has raised $25.5 billion in capital from investors, including through its crypto and biotech (and this does not include the $4.5 billion the company is now raising for its crypto arm). Add to that your bet on Coinbase — the company owned about a quarter of the stock when it started trading publicly — and a big bet on Github, which turned out great (especially as a company that owns Microsoft stock), and you start to appreciate how we got here.

As for Sequoia Capital, it’s a company with a long history – it’s 49 years old – but thankfully, it manages to make a lot of money. According to documents uncovered by Newcomer, the most recent amount is $85.5 billion.

In this amount, it is ahead of Coatue (it disclosed assets of $72.1 billion last week), but behind Tiger Global, which apparently earned a staggering $124.7 billion.

more here.

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