Recently, Brad Feld shared the story of his first angel investment. This prompted Fred Wilson and various other high profile investors to do the same. Those guys have amassed hugely impressive track records and it’s fascinating to read their candid assessments of early deals.
I sit on the other end of the investment experience spectrum. Having recently finished up at Summly, I’ve only just begun to make my first forays into angel investing. Following Feld’s lead, but without the benefit of subsequent successes to fall back on, I’ve made the (hopefully not foolish!) decision to document my approach here.
As you know, I’ve been on the digital currency bandwagon for a while. I plan to begin posting the reasons for my interest in the space, sharing the most useful resources I find, and explaining the disruptive potential of, and also the risks associated with, a completely decentralised cryptocurrency.
This is the first of those posts — a discussion of my first angel investment in the space, CoinDesk, into which I was lucky enough to have the chance to plough a few hard earned dollars alongside the founder in May 2013. Things were a bit different back then. The bitcoin price was $90 (vs. $1000+ today) and it certainly wasn’t trending on Twitter! At the time of that investment, the company was just an idea and my rationale was threefold.
First, Shak is an awesome entrepreneur and a great guy. I had first hand experience of the tremendous value he can bring to a company during my time at Summly. If anyone can build a world class team, Shak can. More importantly, he’s a close friend and mentor, and someone I trust. I don’t agree (yet) with those folks who insist on keeping business and friendship separate.
Second, despite its explosive growth in recent times, I still haven’t formed a view as to whether bitcoin is a perfect solution from a technology standpoint. CoinDesk is the ‘voice of digital currency’ — the leading source of news and data for all things crypto. In that sense, this investment is a bet on the success of digital currency generally rather than bitcoin per se. The company is positioned to rise with the digital currency tide whether it be driven by bitcoin, litecoin, Coinye West or some other protocol which has yet to emerge.
Third, if successful, a news and data service will naturally sit in the centre of the rapidly developing digital currency ecosystem (and when I say ‘rapidly developing’, bear in mind that Satoshi first proposed bitcoin just 5 years ago and it’s really only hit the public radar in the last 12 months). Think of the power wielded by Techcrunch in the technology startup world… If you want to keep your finger on the pulse and meet the folks who are going to build the companies that win in this space, CoinDesk is the place to be.
Since May, CoinDesk has grown in leaps and bounds. Just yesterday it was listed as one of Mattermark’s 3 fastest growing bitcoin companies and it’s the first place I go every morning to keep up to date on all things digital currency.