Andreessen Horowitz is dramatically increasing its funds under management– again. The firm has raised a $1.5 billion third fund, bringing the total under management to $2.7 billion. “It’s a pretty big step up,” said Marc Andreessen in an early morning call.

Part of the reason was pragmatic and part was opportunistic. Fund two was mostly invested and the firm is still seeing a ton of opportunity in what many call an over-crowded, pumped-up market.

Andreessen brought up smart phones as an example. “Smart phones are very well covered in the press, but they are just now really shipping in huge volumes world wide. That’s just materializing now and those are very, very big markets.”

He noted that the firm doesn’t fund companies whose entire business is building a game for the app store, rather, they look for companies that are deceptively simple for users but require a ton of computing power behind the scenes. He cited Foursquare as an example. “They’re deceptive,” he says. “People don’t see the complexity, because it’s hidden and revealed to the user in the form of magic.”

The firm remains stage-agnostic, meaning it can invest anything from thousands of dollars to hundreds of millions in a single round. That said, Andreessen noted that they are pulling back “a bit” from the very late stage secondary rounds in top brand Web companies. “If it’s in the Wall Street Journal lately than it’s probably too late for us to invest,” he says. “There’s a lot of crossover money coming from mutual funds and hedge funds, so in the last nine months we’ve focused on venture and early growth companies.”

By early growth, he means companies just starting to get big traction like two recent Andreessen Horowitz deals, Fab and Pintrest.

Despite all these thoughts on the market, expect the firm to do one thing with this cash: Invest in entrepreneurs and opportunities they like whenever they can get it at any remotely reasonable price. This may be one of the most opportunistic and entrepreneurial venture firms ever to open offices on Sand Hill Road. It can turn on a dime when a new investment thesis looks juicy or under-exploited.

I asked them what had surprised them the most about their relatively short three-year tenure in the business. “How quickly we became popular as a firm among entrepreneurs,” Horowitz said. “In the history of venture capital it takes a very long time to build an established brand and it doesn’t happen very often, particularly with guys who’ve never done this before.”

As Horowitz writes in his blog post on the news, some entrepreneurs might argue that’s precisely why it’s worked this time.

(Marc Andreessen is an investor in PandoDaily.)