How Andreessen Horowitz’s secret crypto gamble on Kickstarter has played out

In tech, language can be powerful.

A linguistic advantage can be a competitive advantage. In rideshare, we’re all likely to have at some point said “let’s call an Uber.” In search, how often have you said “I’m just going to Google it”? And if you’re talking about an AI chatbot, you’ve probably heard someone say “it’s like ChatGPT.” A company or its product becoming a verb or a noun (or, in many cases, both) often signifies dominance.

But Kickstarter’s story reminds us that linguistic dominance isn’t always enough. My colleagues Jessica Mathews and Leo Schwartz just published a piece taking us inside Kickstarter’s last decade, and Andreessen Horowitz’s crypto-driven gamble on the company in 2021, to the tune of a $100 million tender offer. Fortune was the first to report the story.

The recent past is often the hardest to fully remember. But at its peak, Kickstarter was culturally massive. It was truly a darling, a star of New York’s tech scene and the purveyor of a crowdfunding model that produced hits of all kinds, from Phoebe Waller-Bridge’s Fleabag to the VR headset pioneer Oculus. As Schwartz and Mathews write:

Back then, the company’s anti-corporate slant and grassroots spirit had lured celebrity investors and helped shape the early New York tech scene. Its events, from film premieres to rooftop festivals, and its viral money-raising campaigns had helped prove that creative business ideas could find success—and funding—outside of Silicon Valley, and that artists could find support from their fans. 

But a dozen years after its launch, Kickstarter had lost its cachet of cool and churned through CEOs. The Kickstarter of 2021 had little to offer would-be investors but headaches. Growth had flatlined at the startup, which made its money by taking a small cut when a project on its platform met a funding threshold, and its onetime feel-good culture had become toxic in the wake of a bitter unionization drive. New shareholders would be inheriting ownership of a brand that many felt had turned stale.

Here’s where the story gets weird. As the company’s fortunes spiraled, a savior emerged: a16z, whose crypto boss Chris Dixon had been an early investor in the company. This kicked off a new, “Hail Mary” chapter for Kickstarter. As the story details:

After all, this was no small top-up to keep the lights on, but a staggering $100 million investment that valued the startup at around $400 million. But there was a catch. The investment came with the expectation that Kickstarter would attempt a pivot to blockchain as its new benefactor—the crypto fund of venture behemoth Andreessen Horowitz—sought to capitalize on the latest hype cycle.

I won’t spoil the ending, but if you want to go on a ride, you can read the full story here.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com