Rules of Investment, Venture Capital, and Beyond — Interview with Jay Eum

5 min readJun 22, 2018

Our interview with Jay Eum, Co-founder of Translink Capital & former head of Samsung Ventures, is out (iTunes, Google Play, and Stitcher)! He talks about what goes through the head of a venture capitalist when looking at investment, differences between tokens and equity, and risks & opportunities in crypto. We also break down Jay’s three principles of investing intelligently.

Highlights below:

Where were you before blockchain?

I started out in management consultant in Seoul, South Korea, before getting my MBA in Silicon Valley at the height of the dot.com boom. I landed at a venture capital and have been doing that since (~18 years!).

Prior to Translink Capital, I ran the corporate investment arm of Samsung. My other partners at Translink Capital also ran similar functions at other major firms like Softbank and Foxconn. At Translink — like other traditional investors — we’re looking for the hottest, most promising tech trends. These days, it includes AI, VR, AR, and blockchain. Our partners each have different specialties and geographic coverage, with deep ties to Asia and Silicon Valley. One person could focus on enterprise software in Japan while another could delve into Korean conglomerates.

What Goes Through Your Mind as a Venture Capitalist?

We’re looking for visionary entrepreneurs who can ride the early wave of new trends and has a track record of delivering. Remember Google wasn’t first in the search engine game but they had stellar execution. One can argue whether Amazon was the first mover in ecommerce, but they dominated every major vertical they got into, starting with books.

How do You Measure Execution When Meeting Bright Entrepreneurs?

We look at their backgrounds and track records. For rare breeds like Bill Gates and Mark Zuckerberg who dropped out of college, they had already deployed early versions of their product — for Facebook, it had user traction and a growing base. There’s risk to early investing, but you have to believe in the entrepreneur to grab the upside.

Venture capital has evolved over the decades into a mature, specialized industry. You have early seed investors, traditional series A, mezzanine, IT, healthcare, consumer products, etc. There’s a matchmaking process like dating. But you want a warm intro to the blind date. If you want to meet an investor, you need that referral from a credible source.

What’s the Difference Between Venture Capital and Crypto Investing?

I’ve been in crypto for about 4 years. I was introduced to Korbit by a friend. This is a leading Bitcoin digital exchange out of Korea. They had a successful seed financing stage, with backing from Tim Draper, Pantera Capital, and the like. When Korbit became the 2nd crypto Korean exchange, they were acquired by gaming giant Nexon — a nice exit for the early stakeholders. I had a lot of exposure to blockchain during that period.

The past year was key when I got involved with crypto syndicates that originated from a group of Facebook product managers, which included my friend, David Park. I participated as an advisor and investor in some innovative projects like Bee Token.

How Has the Blockchain Hype Cycle Changed?

In earlier stages of crypto, prices exploded and the number of deal flows were mind boggling. In some cases, I had only 24 hours to read a whitepaper and look at their product (if any) before deciding whether I’m in or out. It was driven by fear of missing out (i.e. FOMO). I didn’t have a chance to dive deep into their team, the kind of due diligence I’m used to in VC world.

Since SEC regulations have kicked in, crypto investing looks more like VC investing. You have time to do diligence, evaluate their team’s track record, look at their code and early product or platform. This is a healthy trend so entrepreneurs are better prepared and investors can scrutinize.

There are cases where the project already has a good run, and even generate revenue, pursuing blockchain funding through an initial coin offering may not be optimal when they have traditional financing options. Some projects I’ve seen tend to rely on the initial coin offering perhaps because they face challenges with traditional alternatives.

Investors may be wary about the chances of success when the entrepreneur couldn’t secure traditional financing and opted instead for an initial coin offering. An ICO is innovative, but it’s one type of funding you can do. After the fundraising, you have to build the product, platform, or service on top of the business.

So is the ICO going to make traditional financing obsolete? Seasoned entrepreneurs see value from traditional venture capitalists because they help to build a business — people and money. You’re providing access to capital, as well as networks of customers and technical resources. You provide corporate governance and exit strategies. It’s about growing the business. We have a project that had a successful ICO but has since tapped into traditional financing to grow their business.

What Useful Tips Do You Have For New Crypto Investors?

It’s hard to stay true to these principles at all times but I try my best. First, invest in areas you’re familiar with so you can add value. Secondly, invest in a person you trust.

In blockchain, it could be an infrastructure or application project. If you’re familiar with those areas, you can ask the right questions to evaluate its value proposition. The danger is not knowing what you don’t know, then you don’t know what to ask. That could be dangerous just jumping into a project because it’s a hot project with fancy advisors or investors. On the other hand, you can have confidence in the project if you know and trust the entrepreneur behind that project. They have a background and track record of execution.

Lastly, the investing side is the easier side. The harder part is the exit. With a merger and acquisition, that could make things smoother as everyone is exiting at the same time. But when a company goes public, that could affect when I exit.

In some ways, crypto investing is like being in a casino. You need discipline why locking a return on your investment and staying ahead (i.e. investing with house money is a good rule).