Seeking blockchain innovation overseas
Those of you following AVG Blockchain Fund are probably aware of our laser focus on the foundational layers of the blockchain stack. Our strategy has been largely based on our published thoughts regarding near-term opportunities in the sector in infrastructure and protocols.
We have also developed a view that in this nascent sector, the best deals in line with that strategy (entrepreneurs, technology teams, and investor syndicates) are based in the US — and consequently our early stage investments have been concentrated here.
However, we are now revisiting our geographical concentration strategy based on three observations:
- Listed currencies are sensitive to geography. A sizable part of our portfolio is allocated to listed currencies (also called alt-coins). As we rebalance the currency portfolio away from Bitcoin and Ethereum and towards alt-coins with other properties, geographical exposure has become a prime consideration.
- The quality of token deals from other markets is improving. We are beginning to see good deals from Europe and Asia. Global blockchain platforms like Ethereum, EOS, Neo, and Binance have built out incubation and acceleration models for their respective ecosystems. Now focused, upper-layer investment opportunities are emerging.
- Liquidity in tokens / alt-coins is markedly better in overseas markets. As our portfolio matures and we look for exits, we want to form relationships with overseas market players to help us seek liquidity when the time is right.
In the near term, we are making the following adjustments to our investment strategy:
- Executing on the reallocation of our listed portfolio with a keen eye on geographical considerations (detailed in my colleague Emil Mamedov’s blog post).
- Seeking and closing on a couple of non-US investments as we complete the deployment of Fund 1.
- Actively reaching out to leading investors in key overseas markets (London, Paris, Berlin, Singapore, Dubai, Seoul, Shanghai, and Tokyo) so we can access quality deals just as we do in the US.
We are now closing our first German-based investment, which is led by an excellent team pushing the envelope on in-game artifacts. This is new territory for us: both literally (outside the US) and figuratively (non-fungibles tethered to the Ethereum blockchain based on the ERC-721 standard). And we are actively working on other overseas opportunities.
More to come!
My long form posts on Blockchain investing:
- A Framework for Blockchain Investing
- 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:
The author is the Managing Partner at AVG Blockchain Fund. His views are almost always personal and you can follow him on LinkedIn or Twitter.
Important Disclosure Information: AVG Blockchain is a series of Launch Angels Funds, LLC. The Fund is managed by Launch Angels Management Company, LLC (LAMC) doing business as Alumni Ventures Group (AVG), a Massachusetts-based venture capital firm. Early-stage investments involve substantial risk of loss and are not suitable for all investors. No offering is made except through formal offering materials. We do not provide personalized advice about investments. You should consult your professional advisors before making any investment.
