2021 wasn’t just a great year. It was the greatest year in venture … ever. But AI makes it all feel small. Will 2028 dwarf 2021?
In 2021, Andreessen Horowitz returned more cash to their LPs (their own investors) … than in the entire previous decade combined.
Look at the chart above:
- 2021 alone: $12.5B net to LPs (out of $15.1B total liquidity)
- 2011-2020 combined: $12.4B net to LPs
Ten years of returns—from 2011 through 2020—equaled almost exactly what A16Z did in the single year of 2021.: 2021 represented 50% of A16Z’s all-time LP distributions through 2025 YTD.
One year. Half of all-time returns. For a firm that had been investing for a decade.
After 2021, liquidity fell off a cliff. For … a Little While
- 2022: $872M (down 94% from 2021)
- 2023: $3.0B (still down 80% from 2021)
- 2024: $5.2B (down 66% from 2021)
- 2025 YTD: $4.0B (tracking to maybe $6B for the year, still down 60%)
Even as markets have “recovered” over 2023-2025, we’re not even close to 2021 levels. The combined liquidity of 2022-2024 ($9.1B over three years) doesn’t match the single year of 2021 ($15.1B).
But It Wasn’t Just A16Z—The Entire VC Industry Had a Once-in-a-Generation Year
2021 was extraordinary across the entire venture capital ecosystem.
The numbers are staggering:
Total U.S. VC Exit Value in 2021: $774 billion
Let me put that in perspective:
- 2020 exit value: $290 billion
- 2019 exit value: ~$260 billion
- 2021 was a 167% increase over 2020
This means 2021 generated more exit value than 2019 and 2020 combined. And remember—2020 was itself a record year at the time.
Of that $774B in total exits:
- $681.5 billion came from public listings (IPOs and SPACs)
- 296 VC-backed companies went public in 2021—a 114.5% increase year-over-year
- 88% of all VC-backed exit activity happened through public markets
The IPO and SPAC markets were absolutely on fire:
- Rivian IPO’d at $100B+ valuation
- Coinbase: $86B direct listing
- Roblox: $30B+ direct listing
- Airbnb had gone public at $40B+ in late 2020
- Snowflake at $33B
- And hundreds more
The deal-making side was equally insane:
- Total VC investment: $329.9 billion across 17,054 deals
- That’s nearly double the previous 2020 record of $166.6B
- Over 800 mega-deals ($100M+) closed in 2021—more than 2018, 2019, and 2020 combined
And the fundraising was unprecedented:
- VCs raised $128.3 billion across 730 funds
- First time ever breaking $100B in fundraising
- Up 47.5% from 2020’s record of $86.9B
What Made 2021 So Singular?
2021 wasn’t just about good companies exiting. It was about everything working at once:
The Exit Environment Was Perfect:
- SPACs were throwing money at anything cloud-related
- Public listings accounted for 88% of total VC exit value, driven by strong public markets and the availability of SPACs
- Companies were going public at $300-500M ARR that would’ve waited for $1B+ in normal markets
- Public SaaS multiples hit 20-30x forward revenue (companies like Snowflake briefly traded at 100x+ revenue)
- Tiger, Coatue, and others were writing $100M+ secondary checks at valuations that made early-stage IRRs astronomical
The Macro Environment Was Unprecedented:
- Zero interest rates meant infinite appetite for growth
- COVID stimulus had flooded the system with capital
- Every institution needed to be in “innovation” and “digital transformation”
- Retail investors via apps like Robinhood were piling into tech stocks
- Nontraditional VC investors (PE firms, hedge funds, corporate VCs) invested in almost 6,500 deals worth more than $253 billion
A16Z’s Portfolio Hit at Exactly the Right Moment:
- Their 2014-2018 vintage funds were maturing perfectly
- Cloud infrastructure investments (companies started in the 2010s) were now at scale
- COVID had accelerated digital transformation, making every SaaS metric look incredible
- Dev tools, fintech, and vertical SaaS—all A16Z focus areas—were exploding
This perfect storm lasted about 12-18 months. And A16Z—through a combination of skill, portfolio construction, and timing—captured $12.5B net to LPs in one year, matching the prior decade.
That’s why 2021 was singular for A16Z and the entire venture industry.
But … we’re already back. And in some ways, it’s far, far bigger than 2021.
Let’s Talk About What’s Actually Happening Right Now
The AI valuations happening right now make 2021 look quaint.
Let me just list some numbers:
- OpenAI: $500 billion valuation (recent secondary market activity)
- Anthropic: $183 billion valuation
- xAI: $200 billion (in process)
- Databricks: $100 billion
- Scale AI: $14.5 billion exit
- Vercel: $9 billion
- Supabase: $5 billion
- Perplexity: $15 billion
And that’s just off the top of my head.
This Isn’t 2021. It’s So Much Bigger.
Yes, 2021 was singular—the math proves it. The entire industry generated $774B in exits. But here’s why what’s happening now could actually eclipse it:
The Revenue Growth Is Real—And It’s Faster
In 2021, we had great B2B companies growing 80-100% YoY at $100M ARR. That drove the massive IPO valuations.
But look at what’s happening with AI leaders right now:
- OpenAI went from basically zero revenue to $4 billion ARR in about 24 months. Now they’re reportedly at $10B+ annualized revenue run-rate. That’s not just fast. That’s unprecedented in software history.
- Anthropic is rumored to be doing $1B+ ARR and growing triple digits YoY.
- Databricks is executing a masterclass—$8B+ ARR and still growing 50%+ at that scale because of AI/ML workloads.
- Even smaller AI companies are showing growth curves that make 2021 SaaS companies look slow. Companies going from $0 to $50M ARR in 12-18 months.
These aren’t “fake” COVID pull-forward numbers. This is genuine technology adoption happening in real-time.
The Magnitude of Outcomes Is Bigger
In 2021, the biggest IPOs were:
- Rivian at ~$100B
- Coinbase at $86B
- Roblox at $30B+
Today’s AI company valuations are matching or exceeding those peaks—while still private.
Let’s do the math on what A16Z’s portfolio alone could generate in liquidity over the next 24-36 months:
Anthropic: A16Z led multiple rounds and has meaningful ownership. If Anthropic goes public or gets acquired at $60B+, that’s likely a $3-5B return for A16Z.
Databricks: A16Z was early. If Databricks IPOs at $60-80B (which seems inevitable in the next 12-24 months), that could be another $2-3B+ for A16Z.
Other AI Portfolio: A16Z has invested in dozens of AI companies. Even if just 10% of them turn into $5B+ outcomes, you’re talking about billions more in aggregate returns.
A16Z could generate $10-15B in liquidity from AI exits alone in 2026-2028. That would match or exceed 2021—from a single investment theme.
But What About the Rest of the VC Industry?
If A16Z can generate $10-15B from their AI portfolio, scale that across:
- Sequoia’s AI investments (OpenAI, Hugging Face, etc.)
- Benchmark (significant stakes in multiple AI companies)
- Lightspeed, Thrive, Index Ventures, etc.
The industry could generate $500B+ in AI exit value over 2026-2028.
That would be two-thirds of what 2021 delivered—but from a single category (AI), and spread over 3 years instead of one explosive moment.
But Wait, Didn’t Public Markets Crash? Aren’t Multiples Down?
Yes — to some extent. Multiple are up from their lows, but down from their 2021 peak.
And also: Who cares?
Here’s what changed: In 2021, everything was getting ridiculous multiples. Every SaaS company was trading at 30x ARR or higher.
Now? The bar is higher. But if you clear the bar, the outcomes are bigger.
OpenAI at $500B isn’t trading on vibes. It’s trading on the fact that they might do $15-20B in revenue in 2025.
Databricks at $100B isn’t hope and dreams. It’s real revenue, real margins, and can be a $100B+ public company any time it wants.
The multiples compressed for companies who have seen growth slow. But for exceptional companies—particularly in AI—we’re seeing valuations that exceed 2021 peaks. And unlike 2021, these companies have the fundamentals to support it.
What the 2021 Singularity Is Really Telling Us About 2026-2028+
Go back to that singular 2021 number: $12.5B to LPs in one year for A16Z, equaling the entire prior decade. And $774B in total exit value across the entire VC industry.
That wasn’t just luck. The industry had:
- Made the right bets 5-7 years earlier (2014-2018 vintages)
- Built positions large enough to matter
- Helped companies execute through the window
- Had enough portfolio companies at the right stage simultaneously
The 2021 singularity happened because 2014-2018 portfolios all matured at once into a perfect exit environment.
Now look at 2020-2023 portfolios across the industry. Heavily weighted toward AI. Thesis-driven investments in foundation models, AI infrastructure, AI applications across every vertical.
Those portfolios are maturing right now. Into what might be an even bigger exit environment than 2021.
The recovery is already visible in A16Z’s numbers:
- 2024: $5.2B (starting to climb)
- 2025 YTD: $4.0B (on pace for ~$6B)
But the real wave hasn’t hit yet. Databricks hasn’t IPO’d. Anthropic hasn’t exited. The dozens of mid-sized AI companies haven’t been acquired yet.
When those dominos fall over 2026-2028, we could see:
- 2026: $8-10B for A16Z
- 2027: $12-15B for A16Z
- 2028: $15-20B for A16Z
Not one singular year, but a sustained 3-year run that aggregates to $35-45B. More than 2021. More sustainable than 2021. Built on real technology adoption rather than ZIRP and SPACs.
And that’s just one firm. Across the entire industry, if we see even half of what 2021 delivered over a 3-year period, we’re looking at:
- 2026-2028 combined: $400-600B in total exit value
- Driven primarily by AI companies
- With fundamentals that actually support the valuations
So Will 2026-2028 Match 2021’s Singularity?
2026-2028 combined will far exceed what 2021 did, perhaps by as much as 10x—but across multiple years rather than one explosive moment.
The difference:
- 2021 was a singular 12-18 month window where everything exited at once ($774B in one year)
- 2026-2028 will be a sustained wave as AI companies mature at different rates ($400-600B over 3 years)
But the aggregate returns could be comparable or larger because:
- The underlying companies are better (real revenue, real margins, real technology)
- The exit multiples for winners will be higher (strategic value is extreme)
- The portfolios are larger (more AI investments than cloud investments pre-2021)
- The TAM is bigger (AI touches every software category, not just cloud)
2021 Was a Singular Time. The AI Boom Is Far Bigger, and Far Longer
2021 was singular. The math proves it. A16Z returned as much in one year as the prior decade combined. The entire VC industry generated $774B in exits—more than the previous two years combined.
That’s unlikely to be repeated as a single-year spike.
But here’s what I believe: We’re not waiting for the next singular moment. We’re already in the next wave—and it’s going to be massive.
The AI valuations are already here. The revenue growth is already here. The exits are starting. And unlike 2021’s 12-18 month window driven by ZIRP and SPACs, this will run for years and be driven by fundamental technology adoption.
If you’re building in AI right now, you’re building into what could match or exceed 2021’s liquidity over a 3-year period. Not as one explosive year, but as a sustained multi-year wave.
2021 was epic because portfolio companies from 2014-2018 all exited at once into a perfect storm of low rates, SPACs, and COVID pull-forward.
2026-2028 will be epic because AI companies from 2020-2024 will exit into a market where:
- Every major tech company needs AI capabilities to survive
- The technology is actually delivering productivity gains
- The revenue growth is real and sustainable
- Strategic acquirers have unlimited capital and existential need
The window is open. And it’s massive.
What are you building?
