We back startups that build things we'd love to work on if we had more time.
We backup founders because we are founders, so we understand the position deeply. With that we focus on aligning ourselves with the team, adding value wherever possible, and providing support through the process.
We invest in blockchain networks, crypto companies, cryptocurrencies, tokens and Web3 services based on innovative technology, market adoption, and real use cases. We perform deep technological diligence, we compile code, do security audits, run nodes, and more. We invest either early or at their inflection point. We like startups primed for hyper-scale via deep innovation and product excellence.
It is not the idea that matters, it is the choosing and staying committed to an idea for the long term that matters most. Our goal is to serve our entrepreneurs through the process, building close, personal, relationships along the journey. We're very selective and turn-down 98% of the dealflow that we see. We are stage-agnostic, but prefer early-stage (pre-seed, seed, and Series A).
What we look for in startups: long-term defensibility at-scale, ideally with strong network effects or high switching costs, one or more unfair advantages, a well thought-out distribution model, and attractive economics, ideally with recurring revenue.
We don't restrict our own investments to a specific domain as long as blockchain is involved. Top thinkers in the investment world (Paul Graham, Peter Thiel, Chris Dixon, etc.) have repeatedly pointed out that the best startup companies initially don't even look like companies! They look like bad ideas. Often it's not clear what industry you'd even classify them into; many of the most disruptive ventures exist at the intersection of various industries. The better approach is to simply start from first principles with each company: assess what it does now, what value it provides, whom it serves, and whom it could serve. The very best startups create new markets, or even completely new industries.
We look for deep disruption and that's why we invest primarily in companies with traction signals indicating that a deep-disruptor technology is at play. The rise of companies with billions of users has certainly borne out Marc Andreessen's observation that "software is eating the world". However, we believe that many fail to appreciate that technological development isn't merely unfolding; it's actually accelerating. The time it takes startups to reach hundreds of millions of users, and/or billion-dollar valuations, has dropped from a decade to a half-decade to its current level of around twenty months. No industry will be immune to the onslaught of digitisation.
We love traction so our interest is rarely piqued by startups that describe the disruption they "might" create; we’d rather go after the startups that are already disrupting. The two hallmarks of disruptive traction are a 10x improvement on status quo solutions (i.e. not just an incremental improvement); and an exponential growth curve.
We invest in what we understand. Warren Buffett was right; investing in business models that one doesn't really understand is asking for trouble. You won't catch us putting money into yet another startup claiming to "leverage proprietary algorithms to deliver deep Big Data insights that drive better ad spend targeting and customer engagement". It may be a great company - but if we can't wrap our mind around how they're actually doing it, it's not for us.
Here are some of the areas we’re excited about:
Next Generation Payments
Store of Value
NFTs and New Monetisation Models for Creators
Web3 and Open standards
We are early investors in over 10 blockchain projects with a combined market cap of +$12B and a diluted market cap of +$70B.
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