In less than a year since we closed our first fund, we have established ourselves as leader in the promising world of next-gen fintech and decentralized finance. The fund is outperforming markets and other VC funds (details are for qualified-client/qualified-purchaser investors only — sign up here to learn more).
As word has gotten out, more than a few of you have written to me asking about access to our funds and/or joining our growing team. We are hiring (at senior and junior levels) and we are moving towards closing Fund 2 in a few months.
What is the buzz all about?
In a nutshell, it is ALL about our portfolio.
Since we made our investments from Fund 1, we have seen a few exciting developments:
- Public auctions / exchange listings: Algorand, Top Network
- SEC approved token offerings: PROPS, Blockstack
- Up-rounds in two of our equity investments (as yet unannounced)
And the bulk of our portfolio is still too early to talk about.
About our VC funds
Applied Crypto Ventures (ACV) is a modern VC firm built from the ground up to accomodate the changing nature of early stage investing. It also helps to establish what we are not: we are not a “crypto fund” or a “hedge fund” although we may look like one at times.
We are early stage deep-tech investors but we are different from other VC firms in a few ways:
- We make small impactful investments: Unlike the personality-led, ownership-focused style of storied venture capital firms in Silicon Valley, Boston, New York, and other hubs around the globe, we are providers of relatively small amounts of early capital. But we bring a disproportionate amount of support to entrepreneurs.
- We operate in deep-tech across the world: we bring deep expertise and global networks in specific horizontal (cryptography, AI, IOT, quantum computing, enterprise software, blockchain, distributed ledgers) and vertical (financial services) markets. We look for opportunities globally — Fund 1 was invested 35% outside the US and our current fund is projected to be 50% outside the US
- We are a small but efficient team: We are just two (and we are hiring) but we are seasoned investment professionals who have decades of expertise in fintech, blockchain, and AI. Our Principal, Emil (ex Liberty Mutual, Flagship, and General Catalyst) loves insurance, utilities, and energy. As the Managing Partner, I (ex Fidelity’s F-Prime, Eightroads, Fidelity Ventures, RSA) focus on Capital Markets, Enterprise Software, Security, Banking, Payments, Remittances, etc. Between us, we speak 13 languages and have closed deals in every major global market. In addition to our US base, I cover LatAm, Asia, Western Europe and Africa. Emil covers Eastern Europe and the Middle East for us.
- How we raise capital: we were formed to meet the early stage investing needs of individual investors, so our capital comes from your friends and neighbors and not faceless institutions. However, as word of our performance on Fund 1 gets out, we are seeing significant interest from institutions and we will likely raise some capital from strategic institutional investors. We believe this is in the interest of our primary customer — the individual investor — as it gives us more leverage in the marketplace with bigger checks and more influence.
Why should YOU care?
Venture capital has been traditionally hard to access as an investment option if you are not part of pension fund or family office or endowment or insurance company.
We are a unique VC firm built to support adding early stage VC investments to your personal portfolio.
But why VC in your personal portfolio?
- Because companies stay private longer according to research by McKinsey
- Because most value creation has already been captured by VCs by the time a company goes public. Recall what happened with the Uber IPO?
- Because public markets have shrunk in size over the past two decades
- Because great startup companies continue to thrive in economic downturns
- Because you can: as long as you are a certain net worth, the regulators will allow you to invest
All of this as long as you are aware of the risks of investing in venture capital which is that this is risk capital, and potentially could result in a loss of all of it. VC makes sense in measured doses as part of a diversified portfolio. Sophisticated investors like endowments and wealthy family offices typically allocate 5–15% of their portfolio to venture. Recent research from Cambridge Associates shows that in a low-yield environment we are in globally, investors with 15%+ allocations to VC/PE are producing outsize returns compared to those with less or none.
Learn more about ACV Fintech Next Fund II
If you are a Qualified Client / Qualified Purchaser and would like to consider an investment in Fund 2, note that this post is for information only and is not an offering of securities. Instead sign up here to learn more about our fund.
Our investment thesis is published along with other blog posts on Medium that articulate our strategy, and tactics. Other resources available to you include our website, twitter, my linkedin profile, and our “Blockchain Education Center.”
My other long form posts on Fintech 4.0 and technology investing:
- Getting real with Deep Learning
- A Framework for Blockchain Investing
- The Future of Fintech is Rooted in Data
- Guardrails for blockchain investors
- My latest adventure: a Blockchain VC Fund for qualified individual investors
- Yet another primer on Blockchain
Other analyses from me on Medium:
Important Disclosure Information:
The various funds of the Applied Crypto Ventures (ACV) Blockchain Fund are a series of Green Nonce Ventures, LLC (GNV), DBA Applied Crypto Ventures, LLC. GNV is an independent, for-profit company. Past performance of Applied Crypto Ventures Blockchain Funds may not be indicative of future results. Different types of investments involve varying degrees of risk, and venture capital funds, including the Applied Crypto Ventures Blockchain Funds, are very long-term investments that involve substantial risk of loss, including loss of all capital invested. Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized advice about investments. This newsletter is informational and educational only, and no offering of securities is made with this newsletter. Offers are made only pursuant to formal offering documents, which describe risks (which are significant), terms, and other important information that must be considered before an investment decision is made. Applied Crypto Ventures Fund offerings are made solely to accredited investors who accept the responsibility for conducting their own analysis of the investment and consulting with their professional advisors with respect to their analysis of this investment. ACV’s investments are risky, not suitable for all investors