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1/ let me give an example of how deals are going down in crypto VC - i’ll do a sample equity deal and token deal
deal 1: early stage company raising equity w/ ~$0 revenue in nov 2020
deal 2: token project bootstrapped by anon founders in oct 2020
let’s go
deal 1: early stage company raising equity w/ ~$0 revenue in nov 2020
deal 2: token project bootstrapped by anon founders in oct 2020
let’s go
2/ let’s start w the equity deal. early stage co that was just getting started w monetizing in november. will obfuscate all detail ofc - this is directional.
we negotiated terms to raise $2-3M at a sub $15M valuation w expected revs of $2-3M in 2021.
we negotiated terms to raise $2-3M at a sub $15M valuation w expected revs of $2-3M in 2021.
3/ in Dec, the co did over $1M. Jan to date, the co has beaten its entire 2021 revenue and profit goals.
they cut the round to strategic investors only + raised way less b/c they don’t need money, just help. firms got cut entirely or allocation dropped to $25k (too small!)
they cut the round to strategic investors only + raised way less b/c they don’t need money, just help. firms got cut entirely or allocation dropped to $25k (too small!)
4/ we are seeing co’s becoming profitable and cutting their rounds entirely or taking very little capital.
it’s bloody out there. as a VC you are banking on $500k in a deal and u get $0. that’s raw. u need to deploy to get paid, but co’s don’t need your capital. good luck...
it’s bloody out there. as a VC you are banking on $500k in a deal and u get $0. that’s raw. u need to deploy to get paid, but co’s don’t need your capital. good luck...
5/ ok deal 2 - a DeFi token deal w anon founders. product has been built and shipped, token has a top 500 market cap.
the team hasn’t sold any tokens and wanted to do a strategic round to raise $$$ to hire more devs and speed up strategy + ecosystem growth.
the team hasn’t sold any tokens and wanted to do a strategic round to raise $$$ to hire more devs and speed up strategy + ecosystem growth.
6/ spent a few weeks talking to funds. needed $1-2M to fund ops for 1-2 years since it was a really small team and some contractors.
many token funds and VCs wanted at minimum $1-2M allocations *each* + short lock ups on the tokens + preferential terms of some kind.
many token funds and VCs wanted at minimum $1-2M allocations *each* + short lock ups on the tokens + preferential terms of some kind.
7/ ultimately most funds were cut and majority of checks are from angels and prop firms who are already adding value to the ecosystem.
the team will hire more FT devs w these funds but are wary of raising more capital from funds. it’s a headache and creates conflict.
the team will hire more FT devs w these funds but are wary of raising more capital from funds. it’s a headache and creates conflict.
8/ anyways these are intended to be illustrative of the shift in power dynamics in crypto VC
there are tons of angels, firms, and investors who add value before they ever write a check. i aspire to be one - sometimes i succeed and sometimes i don’t.
but the world is changing.
there are tons of angels, firms, and investors who add value before they ever write a check. i aspire to be one - sometimes i succeed and sometimes i don’t.
but the world is changing.
9/ everyone has capital. ppl for access to my deal flow and i simply can’t get enough allocation most of the time unless you bring more than money to the table.
the landscape is changing, and fast.
mega funds can’t compete. family office can’t even play. trad VC LOL!
the landscape is changing, and fast.
mega funds can’t compete. family office can’t even play. trad VC LOL!
10/ you have to be responsive. no two weeks to reply to email bs. 
you have to move fast.
you have to be thoughtful and on the ball.
edge isn’t capital anymore. edge is YOU - YOUR network, YOUR + firm’s capabilities, YOUR time, YOUR energy.
its gonna get ugly
you have to move fast.
you have to be thoughtful and on the ball.
edge isn’t capital anymore. edge is YOU - YOUR network, YOUR + firm’s capabilities, YOUR time, YOUR energy.
its gonna get ugly
11/ anyways just sharing cuz a lot of ppl think investors just allocate capital
i spend a lot of time working w companies and founders before and after an investment. i always have to invest in the relationship first!
founders - choose carefully
i spend a lot of time working w companies and founders before and after an investment. i always have to invest in the relationship first!
founders - choose carefully
