Leaders Series: Amanda Frankel at Stoic Capital

Issue 51 — May 16, 2018

Amanda Frankel is a Senior Investment Analyst at Stoic Capital

Amanda started her career focused on financial products at Credit Suisse, and recently made the leap to crypto. She was recruited into the industry by Robby Dermody, the co-founder of Counterparty, a popular cryptocurrency, who was starting a new investment vehicle. She’s been drinking from the proverbial crypto firehose, and in this interview, she talks about the rapid pace at which the industry moves, how she keeps pace, and the benefits of working for a fund that has no outside capital — an idea I’m also excited about and actively testing via Athena Capital.

You got into cryptocurrency fairly recently. How did it happen?

Although I’d had some high level industry knowledge for a few years, I didn’t formally integrate into the world of crypto until late 2017. Robby Dermody (cofounder of Counterparty, former president of Symbiont, and a close friend) approached me last year with his latest exciting venture- formalizing a cryptoasset investment vehicle. Despite my basic level of industry knowledge at the time, Robby saw potential in me- raw intelligence, hunger to learn, and a strong background in finance and economics that has served me well in seeking out robust investment opportunities.

It was, frankly, an offer that was impossible to turn down; I was able to move into an industry that had piqued my personal interest for years, as well as work with a phenomenal mentor that not only generously shares his immense industry knowledge, but also encourages me to take that knowledge and form my own fundamental thesis. That’s not to say the transition was easy; I’ve learned in the last few months that if I don’t feel like I’m continually getting knocked over by waves of information, then I’m not keeping pace. It’s simultaneously challenging and empowering, which keeps me from drowning under the tide.

What did you do before you got into this?

When Robby approached me, I was working at Credit Suisse, first as a Business Relationship Manager for several years, and later as a Key Account Management Analyst. My core focus was in analyzing our securities clients and their investment strategies, understanding macroeconomic trends and subsequent impacts on our client franchise, and building a fair amount of product knowledge (I held my Series 7 while at CS).

What problem is your company solving? Why do you feel passionate about this?

Stoic Capital is a long only, fundamentals-based investor in cryptocurrencies, cryptoassets, and cryptoequity. Stoic is a closed fund, meaning we don’t accept or solicit outside investment. This is phenomenal for me as an analyst because it has led to a comparatively higher appetite for calculated risk, allowing discovery of interesting projects that wouldn’t necessarily suit an index fund.

Our mission is to invest in high quality projects with a core in strong technicals and innovation, and a large portion of my role is dedicated to building and continually analyzing our fundamental model as the industry changes. Frankly, the industry today is inundated with a glut of lower quality projects that are able to raise millions simply by splashing “blockchain”, “AI”, “VR”, or other buzzwords across their website. My mandate is to sift through this noise for technical gems with a great team and strong use case.

What’s been the most inspiring experience you’ve had in the crypto space thus far?

My most inspiring experience has been the passion of the industry leaders I’ve had the pleasure to meet or work with. While traditional finance has many stable aspects, cryptocurrency is truly venturing into the unknown. I tend to believe that you see a person’s true self in times of uncertainty, and I have been astonished at the strength and wisdom that has come to the forefront of this volatility.

What are some ideas you’re excited about right now, and why do you think these ideas transformative?

Right now, I’m really excited about security tokens. While not the sexiest idea, my experience in finance leads me to believe that institutional money favors familiarity, as well as uncorrelated returns. Decentralized, regulatory-compliant issuance of equity and debt obligations for startups, as opposed to unbacked tokens, will strike a balance that is a big gateway for institutional market entry. On those lines, I’m particularly excited about Polymath on the security token issuance side, and Dharma as a foundational debt protocol.

What are you skeptical of, and why?

I would say my biggest point of skepticism/disappointment has been the way in which people calling out “FUD” has devolved to be synonymous with distaste for any criticism. Now, any critique of a project, whether constructive or not, whether factual or not, is deemed to be FUD. One of the key parts of the crypto ethos is doubt of the status quo, whether through introspection or looking at the various risks of a project as a path to improvement; this “FUD” campaign runs counter to it. Interestingly enough, there is a market play in this skepticism. I tend to gravitate toward projects that welcome outside analysis/audit/technical innovation, as this tends to produce the highest quality products.

As you think about this industry, what changes do you think cryptocurrencies and blockchain technology will accelerate in our world?

For me, a dark horse in the crypto race is quantum computing and the development of post-quantum cryptography. While current estimates put usable quantum computing at 10–15 years out, I think that most people in the crypto industry could appreciate that sudden technological breakthroughs can disrupt the status quo, moving up the timeline quite a bit. I like projects that are building new blockchains that are quantum resistant, specifically QRL.

What do you think will be disappointing?

As far as short term disappointments, I believe we’ll see quite a few healthcare-based cryptoasset projects fall to the wayside. While many of these projects are technically excellent, their go-to-market often suffers. Any healthcare project would need widespread industry connections with hospital conglomerates, agreements with various government entities, and the ability to navigate complex patient data sensitivity requirements. As we are still in the early adoption phase of the industry, I expect these projects to see a resurgence once the industry matures.

Thanks to Amanda for participating! Connect with her on LinkedIn.

Note: Amanda’s employer, Stoic Capital advises both Polymath and QRL, which are mentioned in this interview. The writer of this post and editor of this publication (Meltem Demirors) strongly advocates for disclosure, and does not hold any of the mentioned tokens. You can view her token holdings and disclosures here.