1/ lessons in venture decision making from an early bitcoin investment...
2/ as a VC one of the things you need to do is to (intellectually) recover from failures ... and understand whether failure really was the result of bad decisions
3/ In January 2016 we backed KNCMiner - on the notion that in bitcoin the best play at the time was to back the only credible miner in Europe
4/ the company went bust in May 2016. Did we make the wrong decision? Pause before you answer.
5/ every risk we had identified in our investment memo came true at the same time.
6/ the Chinese miners flooded the market with capacity, prices dropped and our groundbreaking new 14nm chips suffered from power-related design issues - 20-30% of them failed when overclocked
7/ the key decision we came to regret was changing the ASIC design pre tapeout to a more aggressive / high performance layout based on great test results from TSMC
8/ if we only focus on the end result - we can only conclude that this was a bad investment decision and a bad design decision
9/ but hold your horses - this results oriented thinking may lead you to draw the wrong conclusions from failure
10/ you could argue that we gave ourselves the best shot at creating a breakaway company, and failed. The decisions may have been right even if the outcome was failure.
11/ without this perfect storm of issues - we may well have built one of the most successful companies in the space
12/ lesson - don’t draw conclusions on decision making that is opaque and complex based only on the outcome. I don’t know what the right conclusion is here.
13/ epilogue : i heard the assets, bought in bankruptcy, are now worth $1BN (unverified) 🤔
