a $250M fund could do a $5-10M deal every month for two years and still be under-allocated
and there aren’t enough companies raising series B / C / D rounds!!!
every deal i’ve done lately is under $50M valuation
1/ crypto VC is going through an explosive 🧨 phase
there are big funds (>$500M AUM), a lot of small funds (<$50M AUM), and *tons* of prop firms + angels
i’ve done 15 deals in the last 3 months as an angel + small fund @CoinSharesCo VC.
observations + implications... 👇🏾
a $250M fund could do a $5-10M deal every month for two years and still be under-allocated
and there aren’t enough companies raising series B / C / D rounds!!!
every deal i’ve done lately is under $50M valuation
a recent series A financing had two firms competing to take down the ENTIRE ROUND, and it eventually got upsized, a LOT.
if a company is putting up user acquisition / growth and a revenue story, it’s highly competitive
so the valuations go up, but available allocations go down, resulting in an even bigger squeeze on allocators who *need* to deploy
add in the wave of SPACs and direct listings taking later stage opportunities out
there just aren’t enough places to put capital in size rn
what’s a fund to do?
but your pedigree and reputation matter - founders can be choosy since there’s so much $$$
perks include code audits, marketing, hiring support, research, etc
expect to see this grow exponentially (it already has in trad VC)
and once @coinbase IPO goes out at $50B+, even more capital is going to come hunting for ROI in crypto
the crunch is going to get intense
for investors, be careful and DYOR - always down to trade deal notes
for founders, be choosy. raise less. demand more value! your investors work for YOU 🤩
we are about to enter a brand new era of crypto VC and i couldn’t be more excited 💥🧨💥
my personal portfolio including companies and protocols can be found at https://t.co/K3fVxXPq0v (overdue for an update tho!)
More from Crypto
"Blockchain technology is energy-intensive..." => No, it doesn't have to be.
Let's look at Proof-Of-Stake, an alternative to the energy-intensive Proof-Of-Work algorithm.
🧵🔽
1️⃣ A Quick Recap On Proof-Of-Work
A Proof-Of-Work algorithm requires miners to do a certain amount of work that is compute-intensive to gain access to a service or the right to do something. This algorithm, by design, also requires that the work done shall not ...
... be reusable for anything else than what it was performed for. This lies at the core of the security concept of a blockchain. To gain the right to append a new block to a chain and to get some currency as a reward, there is work to be done, and this work must be verifyable.
That work is a race between different miners. Many miners try to compete and to be the first to find the answer to a problem presented to them. This implies that a lot of energy is wasted as only the first correct solution is accepted.
You can find a more detailed thread on Proof-Of-Work
Let's look at Proof-Of-Stake, an alternative to the energy-intensive Proof-Of-Work algorithm.
🧵🔽
1️⃣ A Quick Recap On Proof-Of-Work
A Proof-Of-Work algorithm requires miners to do a certain amount of work that is compute-intensive to gain access to a service or the right to do something. This algorithm, by design, also requires that the work done shall not ...
... be reusable for anything else than what it was performed for. This lies at the core of the security concept of a blockchain. To gain the right to append a new block to a chain and to get some currency as a reward, there is work to be done, and this work must be verifyable.
That work is a race between different miners. Many miners try to compete and to be the first to find the answer to a problem presented to them. This implies that a lot of energy is wasted as only the first correct solution is accepted.
You can find a more detailed thread on Proof-Of-Work
Proof-Of-Work is the name of a cryptographic algorithm that is used for some blockchains when new blocks are to be appended to the chain.
— Oliver Jumpertz (@oliverjumpertz) April 3, 2021
Let's take a higher-level look at how this one works, shall we?
\U0001f9f5\U0001f53d
I've just read one of the most lucid, wide-ranging, cross-disciplinary critiques of cryptocurrency and blockchain I've yet to encounter. 1/
It comes from David "DSHR" Rosenthal, a distinguished technologist whose past achievements including helping to develop X11 and the core technologies for Nvidia.
https://t.co/tkAMShno4k 2/
Rosenthal's critique is a transcript of a lecture he gave to Stanford's EE380 class, adapted from a December 2021 talk for an investor conference. 3/
It is a bang-up-to-date synthesis of many of the critical writings on the subject, glued together with Rosenthal's own deep technical expertise. He calls it "Can We Mitigate Cryptocurrencies' Externalities?"
The presence of "externalities" in Rosenthal's title is key. 4/
Rosenthal identifies blockchainism's core ideology as emerging from "the libertarian culture of Silicon Valley and the cypherpunks," and states that "libertarianism's attraction is based on ignoring externalities."
This is an important critique of libertarianism. 5/
It comes from David "DSHR" Rosenthal, a distinguished technologist whose past achievements including helping to develop X11 and the core technologies for Nvidia.
https://t.co/tkAMShno4k 2/
Rosenthal's critique is a transcript of a lecture he gave to Stanford's EE380 class, adapted from a December 2021 talk for an investor conference. 3/
It is a bang-up-to-date synthesis of many of the critical writings on the subject, glued together with Rosenthal's own deep technical expertise. He calls it "Can We Mitigate Cryptocurrencies' Externalities?"
The presence of "externalities" in Rosenthal's title is key. 4/
Rosenthal identifies blockchainism's core ideology as emerging from "the libertarian culture of Silicon Valley and the cypherpunks," and states that "libertarianism's attraction is based on ignoring externalities."
This is an important critique of libertarianism. 5/
