Why LPs might gladly invest in Andreessen Horowitz despite unfavorable comparisons to Sequoia and Benchmark
Rolfe Winkler wrote a piece in the WSJ about A16Z's returns in which he says they “lag behind Sequoia, Benchmark and Founders Fund.” — Scott Kupor of A16Z responded …
Context & Ripple Effects
Rolfe Winkler's WSJ performance report put hard numbers on the comparison: a16z's first three funds returned 2.6x, 2.3x, and 1.7x, trailing Sequoia, Benchmark, and Founders Fund, and Scott Kupor publicly pushed back on the framing. Mark Suster's follow-up argues the comparison itself may be the wrong lens for LPs deciding whether to re-up.
The argument matters because it foreshadows what actually happened: LPs kept backing the firm at growing scale, from the $2B fund raised in 2019 to an investment team that had grown 170% by 2021, outpacing Sequoia, Accel, and Lightspeed.
First-order effects
- LPs weighing a16z re-ups get a counter-narrative to the WSJ's fund-by-fund ROI table, with Kupor's response giving them a firm-endorsed rebuttal to cite.
- Sequoia, Benchmark, and Founders Fund gain a public benchmark advantage in their own LP conversations, since the WSJ data now circulates as third-party validation.
Second-order effects
- If Suster's thesis holds with allocators, a16z can keep raising larger funds despite lagging vintages, forcing peers to choose between staying small-and-concentrated like Benchmark or scaling headcount and check sizes to compete for the same LP dollars.
- The debate pushes LP diligence toward factors beyond fund-level multiples — platform breadth, services, deal access — which favors large multi-stage firms over boutiques in marketing terms.
Third-order effects
- The pattern that plays out over the following decade — bigger funds, bigger teams, stakes in 10 of the top 15 private companies per the 2026 deep dive — suggests venture consolidating around scaled platforms whose pitch rests on ownership of breakout companies rather than consistent vintage-to-vintage returns.
- If LP capital keeps flowing to firms on this logic, fund performance journalism shifts from ranking managers by multiple to explaining why scale itself becomes the moat, with regulatory questions (like the adviser registrations a16z adopted) following the enlarged footprint.
The trend: LP capital is concentrating in scaled multi-stage venture platforms even when their fund returns trail boutique peers, making brand, breadth, and breakout ownership the durable pitch.