By Brooke Pollack of Hutt Capital
2020 has been a breakthrough year for blockchain and crypto. There have been a number of developments this year which have led me to this conclusion and have me more excited than ever for the future of this market. I know that others in the industry share the sentiment. These are listed below and described further in this piece.
· Bitcoin Goes Mainstream
· Financial Infrastructure & Market Structure Becoming More Institutional
· Decentralized Finance (DeFi) Emergence
· Stablecoins Experience Significant Growth
· Governance Token Success Paves the Way For Community Owned Networks
· Tokens Prove Ability to Bootstrap Growth & Build Financially Aligned…
Based on the positive feedback regarding our post, Analysis of the Blockchain VC Fund Landscape, in April 2019, we decided to write an updated analysis to reflect how the landscape of blockchain VC funds has changed over the past year. Hopefully we will make this an annual report going forward.
At Hutt Capital, a blockchain VC fund of funds and direct investment firm, we invest in both blockchain VC funds (as a Limited Partner) and directly in the equity of growth stage blockchain-related startups. A key part of our job is to build relationships with the most prominent and promising blockchain venture funds around the world. …
Brooke Pollack, Managing Partner of Hutt Capital, recently joined Tom Shaughnessy Jr of Delphi Digital on his Chain Reaction podcast to discuss Hutt Capital, market trends and making the move from the institutional world to full-time blockchain & crypto. We hope you enjoy!
Review of 2019 Blockchain VC Deal Activity
Hutt Capital analyzed the blockchain venture capital investment data for 2019 to determine what insights could be drawn, and what trends are developing that impact how investors should approach this emerging space.
Given the global nature of the blockchain and crypto markets, our analysis focused on global deal data.
Here are a few of our key takeaways:
· The blockchain deal environment returned to a healthier level after the frenzy in 2018: The blockchain VC frenzy which resulted from the massive crypto bull run and ICO bubble in 2017–2018 is over. Deal activity has returned to a healthier level consistent with its long-term growth trajectory. In 2019, 622 blockchain deals were completed representing $2.75 billion of invested capital, up from 322 deals for $1.28 …
In this three-part series, we are introducing some of the key themes and areas of investment related to blockchain which has Hutt Capital so excited about investing in blockchain technology opportunities. We are keeping it high level in order to cover a wide range of topics. We hope this series of posts helps investors better understand why blockchain is so broadly disruptive and why every serious investor needs to be considering this space as part of a diversified investment portfolio.
There is too much to cover in a single post, so we have broken this up into three parts with each covering five categories. …
I recently had the pleasure to join David Nage for an interview on his Base Layer podcast. We discussed a number of topics, including:
>My background and how I came to start Hutt Capital
>Hutt Capital’s strategy as a FoF + direct investor, and our focus on closed-end blockchain VC funds
>The blockchain VC fund landscape
>Strategy implications of VC vs HF structures in blockchain & crypto investing
>Hutt Capital’s view of the GP/LP relationship and actively adding value as a LP
I hope you enjoy the conversation as much as I did!
Podcast Links Below:
P.S. I am a big fan of David’s podcast and would encourage listening to other episodes as well. Recent guests included Tom Jessop (President of Fidelity Digital Assets) and Marcos Veremis (Leads blockchain/crypto research at Cambridge Associates).
Blockchain is such a transformative technology that the only modern analogy is to compare its potential for disruption to the Internet. But as a novel technology with wide-ranging applications, it can be difficult for investors to filter out the noise and synthesize what are the specific new markets and business models enabled by blockchain technology. And more importantly, why are they compelling investment opportunities which warrant inclusion in a diversified portfolio.
In this post, we will introduce some of the key themes and areas of investment related to blockchain which has Hutt Capital so excited about investing in blockchain technology opportunities. …
One question we are often asked at Hutt Capital when talking to prospective investors is “what does the landscape look like for dedicated blockchain venture capital funds?”. Given the frequency of this question, we have decided to share our data of how many true blockchain VC are there globally and what is the profile of these funds.
For this analysis, we utilized Hutt Capital’s internal database. We work hard to ensure we know the market better than anyone else, but the landscape is constantly evolving. …
Last week, Cambridge Associates published a research note called “Cryptoassets: Venture into the Unknown”, which discussed the state of the blockchain industry and encouraged clients to start considering investment opportunities in the blockchain space. We recommended reading the entire piece (which can be found here):
“…in looking across the investment landscape, we see an industry that is developing, not faltering…Although the crypto industry remains in its infancy, we think institutional investors should begin exploring it…Though these investments entail a high degree of risk, some may very well upend the digital world.”
This was a big deal. Cambridge Associates is a bellwether in the advisory world for institutional investors, and reportedly has $389 billion of assets under advisement and $30 billion of AUM. Cambridge’s influence is vast among institutional Limited Partners in private equity, and the firm is especially strong within the endowment and foundation world. Cambridge would not have released this research note without a lengthy process of careful research, consideration and scrutiny by its authors and management. …
Crypto VC Portfolio Management: Navigating the Opportunities and Challenges of Illiquid Liquidity
Portfolio management for traditional venture capital funds has historically been relatively straightforward. The big decisions are number of deals per fund, initial check size and follow-on/reserves strategy. For the small fraction of investments made by an early stage venture fund which hold IPOs, the manager also will need to determine a liquidity strategy for its public holdings post lockup. …