G20 Ventures
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G20 Ventures

Photo by Eugene Zhyvchik on Unsplash

Your story reflects your strategy. How do you change it when it’s time?

The secret is to separate the equity in your brand from the history of your brand. Here’s how.

The story of customer value at the core of every successful startup is meant to be something that lasts… that survives venture rounds and product pivots, market fads and marketing regimes. Once you find one that works you need to tell it the same way everywhere, and doing so over time will make it feel like part of the team.

So what happens when the world changes, and you need to change with it? Are you stuck with a story that’s no longer effective? Do you throw it out, and start over? Tinker at the margins, and hope for the best?

We came up against this in our fund as we pivoted toward Web3. Here’s what we did and why, including the secret that will help you do the same.

G20 Ventures has always been about human scale venture capital. In an era of billion dollar funds we’ve taken the contrarian view that venture doesn’t scale. We think VC is really hard to do well, and that winning requires intense focus, enough space to see patterns in the dots, and relationships strong enough to get over the peaks and through the valleys on the road to the promised land. The strategy behind our first 3 funds — a concentrated risk model focused on contributing enough money and expertise at Series A to bend the risk curve down, and continued investment through the scale phase — aligned with this story.

We liked to say that in our model, no one was disposable. It had the benefit of being true, and being an idea that resonated with entrepreneurs who knew how rough the road ahead of them could get.

Our site, social profiles, and slide decks all opened with this sentence:

G20 Ventures is early traction capital for East Coast enterprise tech startups, backed by more than 20 of the Northeasts most accomplished entrepreneurs.

I’m proud of the way this captured what made us special, of how our brand, culture, and investing strategy were all about human relationships. It’s bittersweet, in a way, to be writing it for the very last time.

After 3 funds with excellent realized gains, few failures, and strong IRR/MOIC potential, we’ve decided to focus our fourth fund on Web3. Having watched the space mature since 2018, we’re now convinced the building blocks are in place to support real businesses, with new architectures and business models able to disrupt the market and create outsized returns.

While the “degen” speculators who rode the Terra wave are bleeding right now, the shift of capital and talent toward Web3 shows no signs of slowing. That’s where the opportunities for venture scale returns will be the greatest, so it’s where we need to be as well.

It’s a real shift for us, in some ways. The fund will likely encompass 20–25 companies instead of our historical 8–10, meaning we’ll be making smaller investments assuming the same fund size. Time to liquidity could be as short as 6–18 months, meaning “recycling” will be more frequent, and a larger share of value will accrue to non-equity holders, most notably the community of users behind most successful projects.

Human scale venture capital is no longer the right way to communicate our point of difference to investors and entrepreneurs. We needed something new, and spent a few weeks trying to figure out what that was.

The secret to doing this right is to find the conceptual bridge between what you’ve been, and what you’re about to become.

The core of what we’ve been is human. The core of what we’re becoming is Web3. But Web3 is a technology, right? Is there really an idea that lives at the intersection of human and Web3?

Key slide from the deck exploring our positioning evolution.

The answer — to anyone who really understands Web3 — is community.

From our new site:

Web3 isn’t about crypto, blockchain, or tokens. It’s about using those tools to bring people together… to share their ideas, coordinate their work, and align their interests.

From that idea came the idea we‘ll be leading with going forward:

We help Web3 communities grow.

It’s a bold statement, for a venture firm. Some will think it wrong, which to me is the test of any positioning and any strategy: Can a reasonable person disagree with it? If not, it’s bullshit.

Next question is how to support that claim. What — specifically — about what we’re doing gives our money this magical power vs. the many alternative, crypto-native sources of capital available to the best Web3 projects?

It’s really three things:

  • Smart Money — We’re a human scale VC firm, on our fourth fund. We’ve seen it all, across hundreds of deals, at every early stage. We can help you use capital to grow efficiently, minimize dilution, and win the long game.
  • Great Storytelling — A great story attracts customers, talent, and capital. It’s the starting point of every successful community, because of how humans are wired to work together. We can help you create yours, or improve it.
  • The Right Connections — We’re a community of entrepreneurs, operators, and investors. Among our Team, Members, and Scouts, you’ll find people who can help because they’ve been there, or are there right now.

The best crypto projects don’t have a problem raising money right now. What they’re short on is help… to be smarter about using that capital, better at telling their own story, and faster in solving the problems every business has turning an idea into reality.

That’s what we do, all with an eye toward serving the community at the core of every successful Web3 project.

Here’s the long form of our new positioning, which (hopefully) comes to life on our brand spanking new Web site and updated social profiles:

G20 Ventures is the capital partner that helps Web3 communities grow with smart money, great storytelling, and the right connections.

It’s an evolution of where we’ve been, for sure. But the “human scale” sensibilities that have defined us are there, translated to the new oppportunity we’re focused on.

It feels good to write it. I’ll be writing it a lot in the weeks, months, and years to come.

Want to follow our story, and keep up with our adventure? Subscribe for our updates, about every month, and just the good stuff.

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Mike Troiano

Mike Troiano

Venture storyteller, wartime consiglieri, lyrical gangsta. Partner, G20 Ventures, thoughts here are my own. https://nf.td/miketrap