On June 29th, 2017, I saw the Crypto light. It was a religious experience.I could see the future, a future in which Crypto was the biggest thing to happen in the history of humanity. I stopped everything I was doing and focused 100% of my time on Crypto.
I started feverishly writing small posts on Medium to force myself to learn. On October 8th, I published a thought piece, 7 Thoughts On Crypto After Three Months Down The Rabbit Hole. It was my first #1 post on Medium, after which I was (humorously) the 3rd most influential crypto blogger on Medium, making me a guy in crypto.
The day after I published 7 Thoughts, a mutual friend introduced me to James Haft, who he described as “a former Bear Stearns banker and a serial entrepreneur who has recently started to work on the ClimateCoin project”. It was a whirlwind bromance, and on November 29th, we formed CryptoOracle to raise a $100 million CryptoVC Fund via Security Tokens. Dr. Alex Cahana was the first person to join the team, followed quickly by Caron Kramer and Jen Litrojia.
Bagatelle Reaches Out
The same week we formed CryptoOracle, I got this email via Meetup:
Though I had never heard of Bagatelle (which turned out to be epic), Julienne’s offer was intriguing. But instead of a random Monday, Bagatelle agreed to let us have the place EVERY Monday, and CryptoMondays (CM) was born. CM was designed to be the Crypto Meetup I wanted, which was one where there was no speaker, just other people as passionate as me about Crypto. On Jan. 8th, 2018 (the day after the crypto market peaked!), we had our first CryptoMonday, at a packed Bagatelle (400 RSVPs):
When 433 people RSVPd for the next weeks CryptoMonday, we knew we were on to something. We reached out to our network to see who wanted to launch a CryptoMondays node in their city as part of our decentralized community. On January 29th, CryptoMondays L.A. launched, and our global decentralized community was a thing.
The Security Token Struggle
We started working through the legal and technical requirements of launching a VC Fund via a Security Token. Others who went before us, like Science Blockchain, warned us of the challenges. But we weren’t deterred. We knew it was going to be challenging, so we raised $2+ million to fund the process.
We started partnering with industry leaders. We drove thought leadership with posts like Security Tokens Are A Thing, and The Flippening Is Coming (predicting that Security Tokens were going to be bigger than utility tokens). My most read post was Prepare Yourself! The Security Token Tusanmi is About To Hit. We held conference calls with other Security Token players. We held a Security Token track as part of the awesome Crypto Invest Summit.
But putting together the legal and technical pieces, as warned, was daunting. While we sought out experts, the truth was, we were all learning together. The regulatory uncertainty, coupled with an increasingly aggressive SEC, made lawyers reticent to approve the creative ideas necessary when dealing in uncertain regulatory environments. We couldn’t even get the lawyers and accountants to agree on a tax efficient structure for the Fund. The technical aspects we’re also immensely challenging.
Our Evolving Framework. Community Is A Thing
As my crypto framework evolved, I published 5 More Thoughts On Crypto After Another Five Months Down The Rabbit Hole. The first new thought was “Community Is A Major Differentiating Factor In Crypto”. I had come to realize that when communities work, everyone gets more out of them then they put in. Our own decentralized community, CryptoMondays, was growing rapidly, because everyone gets more out of it than they put in. We started more Meetups in the areas we wanted to drive crypto thought leadership, including Token Economics, Governance & Consensus, and Social Good.
Crypto Winter Sets In
As everyone knows, the landscape for fundraising changed dramatically. Crypto market cap peaked on January 8th, 2018, and by the end of the month, it was down 37% from its peak. February saw another 13% fall, and March witnessed a 40% plunge. Winter was upon us.
Coincidentally, the day the market peaked, I published Three Thoughts Relevant To Crypto (A.K.A. The World’s First Global Casino), where I showed that Ripple, was the 10th most valuable U.S.company, sporting a higher market cap than Walmart:
While I wrote that “This bubble, and eventual crash, will just be a blip when viewed in the context of the massive wealth creation to come from Crypto”, the crash came faster, and it was more devastating than anyone predicted. Raising money for anything in crypto got progressively more difficult as the year dragged on.
For 10 months, it seemed like we were two weeks away from solving the technical and legal issues that plagued us. While we‘re still believers in the massive Security Tokens opportunity, after 10 months of doggedly pursuing the Security Token path, we ditched the effort, and moved to a standard fund structure. But with crypto winter deeply ensconced in the ecosystem, by the beginning of 2019, it was clear that the window for starting a $100 million fund, or any thing close, had closed. Morgan Creek, with a highly experienced team and institutional relationships to leverage, was only able to raise $40 million, a fraction of their target. Blocktower, as smart and connected as any crypto investment team, couldn’t raise a $25 million VC fund.
And the grim reality was, neither could we
Crypto Winter Is Different Than Other Winters
When I left Wall Street in January, 2000, to start my first internet company (.tv), the internet bubble burst just 2 months later. When I went all in on Crypto in June, 2017, I saw an uptick for six months. And what an uptick it was! It’s been Crypto winter for 14 months.
While any winter is unpleasant, what’s different now is that amazing people are still moving to Crypto. Remarkable projects are still moving forward. It took lots of money to scale an internet company in 2000. The internet bubble was all about money. So when the money was gone, almost everything stopped and almost everyone left.
Crypto feels very different. The smartest people in the world are still leaving Goldman, and Morgan, and Fidelity as they see the Crypto light. Most of us still in crypto aren’t in it just for the $$$. Most of us also believe we’re changing the world. The FAMGA CEOs aren’t bad people, they’re good capitalists. And the worlds a better place because of FAMGA. But there’s a better way for the majority of people on the planet. And with all the massively talented people working in Crypto, working to bring Crypto mainstream, I’m confident that Crypto winter will fade. And those of us who remained to fight the good fight, will experience a spring & summer like the world’s never seen.
CryptoOracle 2.0 — Going All In On Community
Like most other companies that raised money in 2017 or early 2018, by early 2019, we were running up against the six months rule, which is that no startup should ever have less than six months of cash. It was time to pivot.
In many ways, for CryptoOracle, the pivot had already occurred. We had a flourishing set of communities, a belief that communities were central to the future of crypto, and I had a deep passion for communities (the 2nd company I ran from ‘03–’06 was Bolt). My passion for community was not shared by my co-founder, James Haft, so he stepped down.
Our new Mission:
CrytpoOracle helps build, grow, and engage (decentralized) communities.
Our near term focus is on building, growing, and engaging our own communities. Most notably CryptoMondays, CryptoCommons (our crypto shared workspace), our Academic Alliance (currently at 12 universities), and a new Community For Community Leaders.
We’re also excited about supporting Dr. Cahana, and CryptoOracleHealth, as they help governments, corporations, and start ups leverage Crypto to solve the intractable problems that have long plagued healthcare.
And, finally, our BHAG (Big Hairy Audacious Goal), is to build a decentralized community building platform, so the best projects will have the right set of tools to optimize how they build, grow, and engage their communities. We’ve got a great tech partner (the team behind WandX, India’s first ICO). We built our first Dapp. And we’re looking for other partners to join the ride.
It’s a new day, and I couldn’t be more excited. While incredibly challenging, I’m continuing to have the most fun of my career. I’m increasingly hopeful we’re going to provide a great return for our investors. And most importantly, I’m pretty sure we’re going to make the world a better place.
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