a16z pauses its famed TxO Fund for underserved founders, lays off staff

Andreessen Horowitz is pausing its Expertise x Alternative (TxO) fund and program, based on 4 sources aware of the matter, together with multiple founder in this system. 

The agency introduced TxO in 2020 to support founders who shouldn’t have entry to conventional enterprise networks. A lot of TxO’s members had been ladies and minorities who, total, obtain very slim quantities of enterprise capital {dollars}.

The announcement of the fund got here throughout the wave of help that underrepresented founders received in 2020 after the homicide of George Floyd. The fund launched with $2.2 million in preliminary commitments, TechCrunch beforehand reported, with a16z co-founder Ben Horowitz and his spouse, Felicia, matching as much as an extra $5 million.

TxO offered founders with entry to tech networks, a 16-week-long coaching program, and a $175,000 funding via a donor-advised fund managed by the nonprofit Tides Basis. This system went on to help greater than 60 firms (just like the media model Brown Lady Journal, meals tech Myles Consolation Meals, and the maternity tech Villie). 

TxO garnered some criticism when it launched as a result of it’s technically structured as extra of a nonprofit, somewhat than a standard funding fund. These investing within the fund are thought-about donors, and the cash given is thought to be charity donations, somewhat than conventional restricted associate investments.

Nonetheless, founders who participated in this system and spoke to TechCrunch mentioned it offered them with invaluable help and alternatives to which they in any other case wouldn’t have entry. Final yr, TxO expanded to launch a grant program, offering $50,000 to a few tech nonprofits that support underserved founders. 

TxO introduced its — as of now — final cohort of this system in early March 2025. Founders who partook in this system obtained an e-mail on October 16 from Kofi Ampadu, the associate at a16z who led TxO, saying this system would pause. 

“After we launched TxO, the mission was clear: help proficient, decided builders who’re creating culture-shaping firms however might not have entry to typical Silicon Valley networks and sources,” Ampadu’s e-mail learn, as seen by TechCrunch. “Whereas that goal has not modified, we’re pausing our current program to refine how we ship on it.”

The remainder of the e-mail learn:  

Over the previous 5 years, we’ve experimented with completely different fashions for finest serving founders — from digital and in-person programming to curriculum design and funding construction. As we rethink what’s subsequent, we’ll be making use of all the things we’ve realized and evolving how we help founders by integrating with a16z’s broader early-stage investing and firm constructing technique.  

TxO has backed greater than 60 firms and almost 100 founders. You’ve got collectively raised tens of thousands and thousands in follow-on capital and reached clients throughout tradition and way of life. Founders from earlier cohorts now advise newer ones, and that peer help has strengthened all the group.  

Thanks for being on the heart of this group. Your progress is proof of what’s attainable. Keep tuned for what comes subsequent. Within the meantime, when you have any questions, please don’t hesitate to succeed in out immediately.

Greatest regards,

Kofi

A16z confirmed to TechCrunch that this system was shutting down and that Ampadu alerted members through e-mail.

Members of the TxO employees workforce, which had no less than three folks, excluding Ampadu, had been additionally let go, based on two sources, with the tip of October being their final week. 

The fund’s utility paperwork didn’t particularly name for founder variety, besides when it comes to “cultural authenticity,” and likewise emphasised traditional startup funding standards like measurement of the market and talent to execute.  However the announcement of the fund again in 2020 made clear it was “for entrepreneurs who didn’t have entry to the quick monitor in life however who’ve nice potential. Their merchandise may be non-tech or tech; they need to be from underserved communities (all backgrounds welcome).”

Nonetheless, many within the startup world perceived TxO as an accelerator for numerous expertise, and several other individuals who spoke to TechCrunch identified that its hiatus comes as high names in tech eliminate, cut, reframe, or completely walk back on prior public commitments associated to variety, fairness, and inclusion. The Trump administration has threatened authorized and political ramifications for companies supporting something that could possibly be seen as DEI. 

Others, nonetheless, famous that a16z continues to be all in favour of accelerator-type startup packages. Earlier this yr, it launched Speedrun, a program that guarantees cohort grads as much as $1 million of funding.