Navigating the maze of funds and recent fundraising trends

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Trying to figure out which crypto funds are still in business

In September 2018, I published an overview of the crypto investor landscape and a live database of all funds actively investing in the space. I started digging into the topic because I consistently heard from entrepreneurs how challenging it was to navigate fundraising. Crypto investing was a rapidly changing world of SAFT’s, side pockets, and SPV’s into mining operations and it was far from clear which investors were reputable or what terms were reasonable.

The fundraising landscape has evolved but remains opaque. Many funds (often those raised off of 2017 ICO gains) have quietly closed shop, while new funds have entered. Some VC funds have launched dedicated crypto funds, while many have slowed or stopped investing in the space. …


What crypto fundraising looks like in 2020

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Atomic Loans is a protocol for Bitcoin-backed loans

On Tuesday Atomic Loans made an exciting announcement — their protocol for Bitcoin-backed loans is live and they’ve raised a $2.45M seed round led by Initialized. I’ve been using the beta product for the past few months and am super stoked to finally see them launch.

Founders often have a really interesting perspective on fundraising — they’re the ones doing it! — but investor voices tend to be much louder. …


The gateway to Web3 financial products

This morning InstaDApp announced that they raised a $2.4M seed round led by Pantera. I’m really excited to have played a small part of the round.

I first chatted with Sowmay and Samyak in March — in the six months since that conversation, they have been on an absolute tear, going from <$1M to $30M+ locked in their smart contracts. I’m still blown away that they accomplished this with close to zero outside funding.

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Pretty, pretty good

Financial Services in Web3

Many breakout Web 2.0 consumer fintech companies created huge value by abstracting away complexity:

  • Robinhood (6M users) makes it easier and cheaper to trade stocks
  • Wealthfront ($20B AUM) automates and lowers the cost of complex (but effective) investing…


Crypto Protocols & Developer Engagement

Since the beginning of 2015, investors have deployed billions of dollars into crypto tokens that power open-source networks. These include both tokens that power decentralized application and smart-contract platforms (eg EOS, Ethereum) and ones that power protocols built on top of these blockchains (eg 0x, Maker). These tokens are designed to align incentives among network participants and (in theory) should increase in value as network usage grows.

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The token feedback loop (source: https://taylorpearson.me/fat-thin/)

A common refrain that illustrates how these token models follows as such:

  • When a token increases in value, it draws the attention of developers and speculators.
  • These developers then purchase some tokens and become stakeholders in the network. …


Jumbled thoughts from 3 days in Denver

I had taken notes during the three days I just spent at ETH Denver and decided to compile them into something a bit more organized. It was a great event — all of the hackers I talked to said it was the best run hackathon they had ever attended. My thoughts are below — I’ve attempted to avoid any overdone memes (eg ‘2019 is the year of buidling’) and focus on takeaways from panels and conversations.

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Saturday’s Panel on Decentralized Finance

Crypto investing is getting competitive

Jake Brukhman gave a great overview of generalized mining and how CoinFund is approaching it. A ton of crypto funds have emerged over the past two years and active network participation (eg running nodes, staking) will likely be an area in which funds try to differentiate themselves.


Finding investors, structuring a seed round, and more

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NASA scientists attempt to read an entire white paper (1961)

Despite lousy macro crypto markets, VC investment continues to flow into crypto markets, especially at the seed stage. Indeed, in the past few weeks alone companies like Risk Labs and Argent Labs have announced large seed rounds led by top tier VC funds. While these announcements tend to be well covered in the press and on Twitter, one thing that’s struck me is how rarely founders go into detail on how they successfully fundraised.

Over the past few months I’ve attempted to shed light on the fairly opaque process of early stage fundraising in crypto by writing about topics like how to diligence funds and finding relevant investors. As I thought about what else in that process remains challenging for founders, I realized that the most valuable perspective would likely be from someone who has actually gone through it. …


How to Properly Diligence Investors

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Trying to read through an early stage financing agreement

Taking money from outside investors is one of the largest decisions founders make. Unlike a bad hire or failed marketing campaign, you can't change your mind months or years later — you're stuck with what you got. In a rush to find funding, founders often fail to actually diligence their investors.

As bad actors flood the crypto space, it’s more important than ever to diligence potential investors. A fund’s structure directly impacts its incentives, behavior, and solvency and so founders should research investors as much as possible before taking their money. …


Navigating the crypto investor landscape

While fundraising activity in the crypto space has attracted significant attention, it has been the more eye-catching fundraises that have attracted most of it — very little has been written about the experience of founders in the space. Despite what headlines might suggest, fundraising in the space remains challenging and opaque. If you’re fundraising for an early blockchain company, there are still many unknowns — who the reputable funds actively investing in the space are, which ones might be good fits for your company, and how to diligence them.

A few weeks ago I asked in the Telegram group from the last Unplug Retreat if anyone had seen a good overview of the investor…


A skeptical take on ‘Crypto Hubs’

One of the biggest themes in crypto in 2018 has been increasing focus from regulators. As cryptocurrency valuations have skyrocketed and large financial institutions have entered the space, high-profile frauds have continued to make headlines and governments have rapidly tried to catch up to reign in the ‘wild west’ of initial coin offering. In many cases, regulators have taken a forceful approach — they’ve warned investors of the dangers of ICO’s and made clear that they believe that token sales are within their regulatory purview.

In parallel, a number of countries have seen an opportunity in attracting token issuers. These countries are attempting to become ‘crypto hubs’ by creating favorable regulatory frameworks, attracting high profile projects, and implementing low taxes for token issuers. …


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Initial reactions to two weeks in the European ecosystem

My exposure to the blockchain world has been heavily U.S. skewed — I live in San Francisco and work at CoinList, where we focus on helping companies run token sales compliantly to the standards set by U.S. securities laws. Unsurprisingly, most — although not all — of the projects that we’ve worked with have been U.S. based.

Last month I spent two weeks in Europe for a number of conferences (Internet of Agreements in London, Blockstack’s Berlin event, and Unplug) and left with a few strong impressions: while the overall ecosystem is smaller than in the U.S., …

About

Regan Bozman

Business Ops @CoinList. Past lives @AngelList @Handy.📍San Francisco. 🏠 New York.

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