0/ Fundraising is crypto’s first killer app. We’re in the middle of the first large scale experiments in layering public market dynamics on a venture context and the creativity and diversity of investment strategies are hugely important to market development.
1/ ICOs in 2017 were a watershed moment. Ultimately accounting for more early capital than seed stage venture, token sales broke the hegemony of the angel & VC model for early stage financing.
2/ 2017 was also the epitome of a rising-tide-lifts-all-boats. So much money came in through ICOs that it actually obscured the fact that creative investors were developing a diverse array of new strategies.
3/ The ebbing market of 2018 has created space for a much more sophisticated and sustained discussion about capital formation and token economies.
4/ One set of discussions that has gotten much more room to breath is how to value crypto economies. What does valuation mean when we’re talking about projects that more closely resemble complete economies than for-profit companies?
5/ The ongoing thinking on this topic from investors like @cburniske @KyleSamani @jlppfeffer is not only intellectually fascinating, but has massive implications for how crypto capital markets develop.
6/ Related, another conversation that has found more space in the bear market is simply: what’s the right way to invest in this new asset class?
7/ Again, focus on ICOs obscures the diversity of capital. From public market-esque approaches like @AriDavidPaul’s BlockTower to VC-style like @placeholdervc to hybrid strats like @multicoincap to index funds like @BitwiseInvest & fund of funds like @rmarini’s Protocol Ventures
8/ Just this week, Twitter has seen an interesting and important conversation around if and how protocol projects should be building funds to invest in their ecosystems led by @Melt_Dem, @AriannaSimpson and others
8/ This investment strategy diversity matters for a couple reasons: 1) the needs of on-the-verge institutional money; and 2) keeping open the option set for how new projects organize themselves
9/ Re: institutional money. Crypto 2017 was a retail investor revolution. Next up are family offices. A diversity of investment options means those fund managers can find strategies that match their risk profile.
10/ Re: projects. Startups pattern themselves off the money they have access to. Decentralization is a new frontier of organization design, so having different capital options makes it less likely that founders warp approaches to match the expectations of the available capital.
11/ If interested in this conversation, check out my long-read “The Reimagining Of Risk” over on @hackernoon hackernoon.com/the-reimaginin…
