8 principles A16z used to make 440x on Solana

The cryptocurrency market offers plenty of opportunities for individual investors to make substantial money.

However, it's quite challenging to identify legitimate projects among the numerous scams, rugs, and teams that only aim to deceive people and take their money without actually developing anything worthwhile.

Finding your way through this forest definitely isn’t easy; it takes a lot of luck and a strategic approach.

Most investors make trading decisions based on social media hype, such as crypto influencers, YouTubers, and TikTok memes.

It's important to do your research before investing; otherwise it’s gambling.

That’s why I highly recommend following the 8 A16z investing principles, one of the industry's best crypto funds, before investing.

Funny enough, the price of SOL dropped below the private SOL price that A16z got. For a short amount of time, the public could buy SOL at $0.22

We'll look at their most successful investments and the key investing principles you can apply to your investments.

Additionally, I'll provide some ChatGPT shortcuts to help you accelerate the process.

Finally, we'll also examine some of A16z's most recent investments to show you where the crypto market is heading.

But why does A16z and its strategy matter?

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Who is a16z and Why Their Investment Strategy Matters

Andreessen Horowitz, commonly known as a16z, is a titan amongst VCs.

They were founded in 2009 by Marc Andreessen and Ben Horowitz; the firm became quite popular because of some of their most successful initial investments, including Facebook, Airbnb, and Coinbase.

A16z is known not just for its successful investments but also for its rigorous principles of finding and investing in promising opportunities.

They have become masters at spotting emerging trends before they become mainstream.

For you and other crypto investors, using their principles and looking at the most recent projects A16z has invested in can give you a massive advantage compared to 99% of the retailers that get their info on TikTok.

Before we continue with the principles, here are a few of A16z's most successful investments:

8 principles A16z fund used to make 420x on Solana (and how you can use them too)

The principles below have been altered so that anyone can use them without needing a large research team.

I have made them more actionable so you can implement these principles into your research.

1. Identify long-term growth potential.

Analyze upcoming trends by looking at the coin categories on coingecko and what types of projects recently received investments from large funds.

These funds have the world's best researchers, so they know something we don’t know.

Finding narratives and raises

When looking for narratives and trends, start with CoinGecko or CoinMarketCap to look at popular narratives/trends and familiarize yourself with them.

In the next step, you can search for lists with series A and B rounds. With such a list, you can note what projects and narratives get the most bets from funds.

You can find raises for free on defillama:

and on chain broker.

You need to go to the chainbroker project list

The only caveat to remember is that a narrative typically becomes a narrative when the price has increased substantially.

Last but not least, and this is a pro tip: Keep an eye out for L1 and L2 blockchains that have received substantial investments from funds. 

Join their discords and telegram and see if you can try out their testnet or even run a node if you have the skills.

2. Do Your Own In-Depth Project Research 

When you find a project, look for a tldr of a whitepaper. You can even use chatgpt to help you with the research.

Some plugins allow you to upload a pdf into chat gpt, and you can ask the whitepaper questions. You can also use chat gpt to search for explanations of a project. (i.e., ‘chat gpt, please use search to find key points that explain what Celestia does and what problem it solves’)

3. Zero in on Your Sector of Interest 

Investing in a sector you are passionate about makes the volatility aspect of crypto a lot easier.

For example, if you are interested in gaming, you might focus on the games sector. A friend of mine is into 3D rendering and got into Render when it was only a few cents. He’s made a killing as he’s super bullish on Render.

4. Draw Insights from the Community 

Use Twitter and Reddit to tap into community sentiment and gather diverse perspectives. You can use cashtags like $BTC and $ETH to search for project mentions on Twitter.

A funny thing about Reddit is that it is often known as a countertrade social platform.

This means that when the community is extremely bearish about a project, that project typically tends to do really well.

So, take the info with a large bucket of salt. When you start seeing a suicide helpline on Reddit, it’s typically a good time to buy.

5. Assess Product-Market Fit 

Evaluate if a project addresses a real need by checking its activity on DappRadar.

Furthermore, think about the feasibility of a project. For example, chainlink is already providing a service to thousands of DApps.

On the other hand, I think it’s unlikely that most of the banks in the world will find a consensus and use XRP and ripple technology.

6. Look for Early Investment Opportunities 

You can find early investment opportunities by participating in ICOs. Chainbroker has a nice calendar of upcoming ICOs. Icodrops also has a nice list of upcoming ICOs. When investing in ICOs, you need to be really diligent.

You can also track new project listings on exchanges like Binance's Launchpad or Coinbase's new listings. (That’s how I found $ABT: It just rallied 450% since my last newsletter)

1. try to find out if top funds have invested in that project,

2. find mentions on Twitter,

3. look at the Tokenomics and vesting

7. Diversify Your Crypto Portfolio

Diversify your investments across various crypto assets to mitigate risk. This includes investing in a mix of established cryptocurrencies like Bitcoin and Ethereum, as well as in a selection of top altcoins and promising new projects.

8. Support Projects with Strong Communities

The strength of a project's community can greatly influence its success. Projects with active, engaged communities, like Cardano. Even though the Cardano tech isn’t there yet, i’m confident it will do well during the bullrun because of how loyal the userbase is.

Cheatsheet Recap: 8 Principles A16z

Recent Investments by Andreessen Horowitz (A16z)

Here are some of the recent investment rounds A16z participated in:

Currently, the social platform for friends with benefits is trading at $4. During the 2021 bull run, it peaked at $199.

Popular A16z narratives they have invested in

After analyzing the most recent A16z investments, I was curious about what narratives they are the most bullish on:

Two narratives stick out, and that’s:

1. Blockchain Services

2. GameFi and Social Platforms

I didn’t use a large sample of data, so I might do this again with the last 100 investments they did in the last two years to rank better which narratives they are bullish on in the next few years.

Share Your Analysis

Reading alone won’t get you that far.

I want to leave you with this small task.

Please use this framework to analyze your biggest bag and share it with the onchain edge community.

I’ll share the best analysis next week in the newsletter.

I hope you enjoyed this!

I’ll catch up with you in the tg group.investing; otherwise

Kierin

Onchain Edge