Thread by @RideTheNexus

There's an idea spreading around #BSV ...

'With Bitcoin, bye-bye goes VC'

I disagree.

My thoughts 👇

#Bitcoin #BitcoinSV

1/ Many in BSV have mentioned ways in which Bitcoin now allows startups to negate the need for venture capital.

Imo, it's not black & white. It's more nuanced.

Bitcoin unlocks more optionality for entrepreneurs. Not less.

2/ The Silicon Valley mantra of 'scale at all costs' - aggressive growth to the next round / gaining market share over gaining profit / short-term metrics over long-term metrics.

These are destructive to innovation & benefit mainly investors who can sell onto the greater fool.

3/ The ICO mania of raising before building, doesn't incentivize productive behaviour either. Proof:
$ billions raised. Nothing to show.

In BSV. Models are emerging:

Crowd-funding / profit-sharing / tokenization etc.

These models will suit some startups. Not all...

4/ Models like these will enable increased flexibility for 'lifestyle-businesses' / smaller-scale ventures.

Opening up more paths to become profitable & sustainable sooner; via p2p global trade & new business models.

I call this 'incremental monetization'. This is exciting.

5/ So where does VC fit into this?

VC's aren't just a piggy bank. They offer guidance. Connections. Domain experience. Partnerships etc.

Teamwork & relationships build winning ventures. Money is the rocket fuel.

Entrepreneurs often seek more than just rocket fuel.

6/ Not all VC's are created equal.

It's a strong signal that an entrepreneur is building on BSV.

Similar to how it's a strong signal (for an entrepreneur) that a VC is focused on backing BSV startups.

I don't envision a death of VC's because of Bitcoin...

7/ I envision a dramatic, VC pivot to BSV over the coming years.

VC's who best understand Bitcoin & the Metanet, will be best positioned to bring value to & attract, the entrepreneurs who seek VC partnership.

8/ I also envision VC's of the future being truly global. Not a heavy concentration in Silicon Valley.

Knowledge & value will be the VC differentiator. Not location. This opens up opportunity for (Bitcoin-native) VC's, to become the go-to VC's of the future.

9/ Maybe this is a power shift from VC's to entrepreneurs? Or maybe not.

Either way, BitcoinSV is the birth of a new startup ecosystem & entrepreneurs need to innovate.

As do VC's need to innovate their value-prop to entrepreneurs.

This is a new game for all players.

10/ So we're all VC's now with Bitcoin?

Nope.

Retail investors will have more opportunities to invest in BSV companies through models like crowd-funding.

But, not every company will allow retail investors to invest in their company.

11/ Offering / gaining equity is a value exchange:

Just because of Bitcoin, you shouldn't expect to be granted:

- Equity as an investor in a company.
- Equity as an employee in a company.
- (As a VC) gain revenue (Bitcoin) per second from a profitable BSV company.

12/ If you offer high-value, maybe all these doors open for you.

What's your value exchange?

BSV companies will offer a range of new & novel, win-win value exchanges for entrepreneurs / investors & startup employees.

This doesn’t lead to everyone being a VC. Nor do they die.

13/ This is all about choice & strategy. Figuring out the best model for you, as an entrepreneur / team.

What will work for you. Won't necessarily work for me & vice versa.

If you are building a VC worthy company (potentially v valuable) - VC might fit your needs.

14/ If you are building a 'lifestyle business' - VC probably isn't for you.

If you are willing to self-fund (regardless of what type of company you’re building) - All the power to you.

15/ If you are in the position to self fund your Bitcoin startup.

Just because you can self-fund, doesn't mean you wouldn't be better off receiving funding.

You will be competing against other BSV startups that choose to receive funding.

There's always + & - to every option.

16/ Revenue over growth.

Tipping the scales the other way to focus everything on short-term profit, over long-term company growth, can create a different set of issues.

Leaving short-term money on the table, can actually be a strategic long-term advantage.

17/ Bottom line is...

The sweet spot is focusing heavily on both profit generation & growth.

But only what will lead to the highest Bitcoin earning potential 'long-term.'

Not short-term profit (for-profits sake) if it hinders long-term profit downstream.

18/ Bitcoin companies might play a longer game (monetizing downstream).

If you think this is foolish. You aren't thinking into the future.

Just because you can add Bitcoin costs into everything, doesn't necessarily mean you should.

It's a balancing act. ♟

19/ There's many ways to monetize Bitcoin startups.

This is as much a competition to find winning 'long-term' business models.

As much as it’s a competition for building great products & services.

20/ The reality is, no Bitcoin startup is able to turn profitable & sustainable right now.

We’re just too early.

BSV is a tiny target-market size & the early positive feedback loop from early users won't yet prove you have found a winning business model for the long-run.

21/ Earn profit whilst riding BSV price rise.

Ideally yes.

But I view this as the long-term (earn Bitcoin play). Not an attempt to earn short-term gains (at all costs) if it will stifle long-term gains.

22/ Riding price rises from VC money (in BSV) can be a bonus.

But, you don’t just HODL VC money hoping to moon. It’s a fund; to fund the company. To be spent to achieve objectives. Not a lottery ticket to catch price rises.

Same with company profits; spending, not HODLing.

23/ So why invest in Bitcoin startups, when you can buy Bitcoin & win regardless?

Simple: winning Bitcoin companies will over-index the returns of Bitcoins price rise long-term.

The challenge:
- Picking the winners (VC).
- Building the winners (entrepreneurs).

24/ If you are bold & crazy enough to try build a company big enough to change the world...

Capital & help is needed.

You can still stay lean & scrappy & focus on profit with VC help.

Entrepreneur + VC alignment is key.

= More options. Not less.

You choose your path 👣