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May 28 23 tweets 4 min read
1/ On VCs in web3

Why are they here? Why isn't it all decentralized? Why do we see the same names over and over again?

Is this good? Is it bad? Whose fault is it?

Read to find out more - this is actually quite simple.
2/ This all starts with the SEC and specifically the "Howey Test"

This is a test of if something is a security in the United States, specifically:

✅An investment of money
✅In a common enterprise
✅With the expectation of profit
✅To be derived from the efforts of others
3/ So to take a simple example.

You think you can build a great exchange for trading NFTs. You need some money to pay the salary of you and your colleagues, servers, etc.

You pitch this idea to your friends or your twitter feed.

$ for shares or ETH for tokens
3/ How does this look

Investment of money? Yes
In a common enterprise? Sure is
Expectation of profit? Yup
To be derived from the efforts of others? Yup, in this case the "others" is you and your team
4/ Congratulations!

You have just sold an unregistered security and violated the law in the United States

So what you can do?

Well the easiest and most practical thing to do is to sell shares to "accredited investors" who are primarily defined in the United States as "rich"
5/ The United States allows you to sell unregistered securities to accredited investors with, effectively, no restrictions.

So most startups, excited to build their business, not navigate a bunch of regulations from the SEC will go the fast route and go to accredited investors
6/ Who are typical accredited investors who invest in startups?

✅ Rich individuals ("angels")
✅ Rich established families ("family offices")
✅ Venture capital firms ("VCs")

VCs can typically make larger investments at higher valuations.
7/ What are your alternatives?

a) self-finance until you have a decentralized product
b) crowdfund (lower) amounts through the crowdfunding regulations
c) file to be a public company

For most cases, all of these are harder for the startup
8/ What about the rest of the world?

In terms of startup funding for crypto firms, the rest of the world does not matter so much (yet).

The majority of startup funding for crypto comes from the United States for now
9/ OK, so who are significant funders of crypto startups.

A very much non-exhaustive list off the top of my head:
- a16z
- USV
- Pantera
- DCG
- Paradigm
- Polychain
and a few more
10/ What is very interesting is that the large majority of silicon valley venture capital firms have not yet gotten comfortable with funding crypto startups.

The number of firms willing and able to write a big check to an early stage crypto startup on a regular basis is <10
11/ So here is an approximate model of funding for crypto startups.

a) most money is raised in the USA
b) the SEC pushes startups to VC firms
c) Most VCs are clueless about crypto
d) The VCs who are not clueless show up in a lot of deals bc their competitors are out to lunch
12/ Is this good or bad? It depends on the alternative:

a) SEC being more creative on web3 funding would be BETTER
b) More VC firms investing in crypto startups would be BETTER
c) But everything staying as-is and the VC firms that invest in crypto investing less, would be WORSE
13/ So, sure Jack Dorsey is right that the same firms appear in a lot of firms' shareholder bases, but I have not seen him propose an actual practical alternative such as:

a) specific changes at the SEC

b) helping getting more money to these startups in other ways
14/ I think also that people overestimate the level of involvement of VC firms in day-to-day operations of their "portfolio companies"

Each VC typically has a 1% to 10% stake and invests in many startups.

No good VC has time for operational matters within their portfolio
15/ Now, what should a budding founder do?

a) If they can self-finance, self-finance for as long as possible

b) If their product can get to market without funding, sure, do it

c) But if they need capital to execute their vision, they should go get it and not be ashamed
16/ Also, and this is more an issue for inexperienced founders than for experienced ones, it is OK to listen to ideas and advice from VCs, but you have to make your own decisions.

The buck stops with the CEO, not shareholders or directors
17/ The only time I have been irritated with startup founders has been when they have 'hidden' behind their investors.

"Well, my investors told me to do it"
"Yes, but it is YOUR decision and you have to stand behind it"
18/ There is no pattern matching of a "good CEO" who hides behind their board of directors or shareholders for decisions.

If it is a good decision, you should stand behind it.
If it is a bad decision, you should not.

Anything else is insta-loss-of-respect.
19/ I note that sometimes, with 2nd tier VCs and inexperienced founders, the investors use the founder's lack of knowledge or insecurity against them.

There it is the VC's fault.

Interestingly, the weaker the VC, the worse the behavior.
20/ The best VCs in the world are:

a) personally very successful
b) know that power laws rule everything around them (the big wins are what matters).
c) don't sweat the small stuff

You generally do not see them messing around with a company for a small tactical advantage.
21/ So this is where we are.

It is not perfect, I hope it can improve, but also I don't think it is an impossible barrier to where we need to go.

The impossible barrier will be banning directly or indirectly non-custodial wallets.

All eyes must stay on that prize!
22/ If this is your first time around here, we are heading for an open metaverse.

it just might save the world in the 2030s.

lots and lots and lots of tweets on this here

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More from @punk6529

May 26
1/ 🚨Gradients Final Auction is on 🚨

The remaining 24 Gradients are on auction as of now.

One ending in 3 hours, one in 6, then lots tomorrow afternoon/night, a few on Saturday, grand finale, #42 and #69 on Saturday

opensea.io/collection/652…
2/ A reminder on the remaining supply:

a) 11 at 6529 Museum
b) 5 went to our ❤️ @6529er @LoneRanger5148 @rayan_oncyber @6529capital
c) 3 I am will be giving away to some collectives in the coming weeks.

And that is it, we are done on primary
3/ The distribution is close to ideal in terms of what I wanted so far.

The first wallet is the 6529 selling wallet; the second is the 6529 Museum and then after that is is very well distributed, almost all holders of 1.

Hope that holds after today.
Read 6 tweets
May 25
1/ After the Thankgiving Gradient auctions, I said we would not auction again until 2022.

Well, that was accurate! It is in fact 2022 - like many other fun things, got left behind in all the OM BUIDLing

So I just sent #83 to a 24 hr auction at 0.6529

opensea.io/assets/ethereu…
2/ What are the Gradients?

Well, for one, they are @6529er's preferred interpretation of his iconic logo.

The logo might appear in other NFTs, but the Gradients are and always will be the "reference" interpretation.
3/ They are also a vehicle for me to run fun social experiments.

When they first launched, I had no idea what they would do.

Then we tried the Gradient owners curated gallery - each gradient owner can place an NFT of their choice in the gradient gallery.

I enjoyed this.
Read 14 tweets
May 15
1/ While I would be happy to be proven wrong, I don't think undercollateralized algostables can work

I have been thinking about this for almost a decade and have not come up with a plausible solution that I believe in - otherwise 6529USD would be a thing 😂
2/ Making your token = 1 dollar is a subset of a broader question of 'pegging your currency to another currency"

In freely convertible currencies, even major nation-states fail at this regularly.

(you can do it if your currency is not freely convertible but defeats the purpose)
3/ As far as I can tell, the viable design space is:

a) Centralized collateral like USDC. This can work, will be regulated, has 'nation state risk'

b) Decentralized overcollateralized like +/- Dai
Read 10 tweets
May 14
1/ On Bear Markets

You are down bad? Working at McDonald's? Your ATH net worth is only visible with a telescope? Your gf is wondering where all the money went?

Now what?
2/ First, some a couple of background threads that I may reference.

What this all means is different based on what "level" you are at in life and what type of game you are playing.

Levels 1 to Levels 5 described below

3/ Also, because I do not want to rewrite my thread from January 1 on "how to make it in crypto?," I am also posting it here.

The title is: "There is one rule only: SURVIVE!" and this still holds. We are going to talk about this today.

Read 35 tweets
May 1
1/ On the Otherside licenses (there are 2)

Because 6529 reads licenses, the tl;dr

- much worse licenses than prior Yuga licenses
- no rights in Otherdeeds
- restricted rights in Kodas, 100% revocable
- if punks license ends up looking like this 😬

otherside.xyz/license
2/ Otherdeeds are the first object in the Yuga universe with no commercial rights.

They are non-commercial rights only, with Animoca as your counterparty.

Also, LOL to physically printing out your Otherdeed
3/ Kodas have commercial rights, but the agreement is much stricter and more limited than prior Yuga language.

This is the key part, making it explicit that the rights are only available as part of a license and subject to the agreement.
Read 26 tweets
Apr 26
Genesis Museum Video Challenge vote.

The team has narrowed down the entries to 4 finalists (video links below)

Vote here over 24 hours.

1st place 0.69ETH, 2nd place 0.2ETH, 3rd place 0.1ETH
2/ Ank

Read 5 tweets

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