Tim Young, founder of Hidden Hand Capital, is an entrepreneur and investor focused on early stage technology. Over the past few years, his investments have become laser focused on blockchain and crypto assets. Previously he founded and successfully exited both enterprise and consumer software startups. Tim also contributes to the Apex Token Fund as Director of Global Partnerships.
1) What is your background? What brought you to the crypto space?
For the past decade, I have been an entrepreneur and angel investor focused on early-stage technology. I have a computer science background with interest in both network and flock theories. Understanding how networks operate and participants exchange value have been the basis for both of the companies I have started, as well as many of the companies I have invested in. I have a unique background having founded and successfully exited both enterprise and consumer software startups. I founded Socialcast (acquired by VMware) and co-founded About.me (acquired by AOL).
In late 2012, I was looking for new investment opportunities and was introduced to Bitcoin by my friend Joyce Kim, co-founder of Stellar and who now runs Sparkchain Capital. I still remember having to fax my utility bill to Slovenia to set up an account on Bitstamp to purchase my first bitcoins. My friendship with Joyce is also what ultimately led to me being an investor in Opencoin (now Ripple Labs) in 2013.
2) What is your fund strategy?
Our fund leverages a long/short strategy with a specialized focus on investing in crypto assets that utilize proof-of-stake or masternodes to achieve their distributed consensus. The fund builds and operates masternodes, stakes coins, and actively trades positions.
3) How do you analyze new investment opportunities? What is your fund process?
While most investors like to evaluate new investment opportunities by first reading a project’s whitepaper, our approach is to start with the code. We feel strongly that the developer’s code represents the true expression and reality of a project’s vision, goals, and ability to execute. We look for novel yet thoughtful pieces and construction of code where value is being created by balancing friction and incentives. Once we understand what the code is attempting to achieve, we start to build a model and projections of the network participants, token mechanics, and incentive structures. We then engage directly with the team to understand their motivations, roadmap, and discover potential possibilities and uncertainties. Finally, we spend time understanding and evaluating a project’s community, and it’s social scalability. At each stage of our diligence, we attempt to quantify the risks and build a risk profile. If at this point we have developed strong conviction around investing in the asset then we develop a full thesis that takes into consideration the macro crypto environment, how the asset will fit into our portfolio and operational model, and our strategy in building up a position.
4) What projects are you excited about?
I am most excited about projects with fundamentally strong development teams that fit our investment focus like Decred. We also believe PIVX, Blocknet, Bismuth, and XSN are exciting opportunities along with some projects that have yet to be publicly launched.
5) What are some of the technological trends you are watching in 2018?
Themes that we are tracking in 2018 include scalability, platform alternatives, hybrid proof-of-stake/proof of work consensus layers, and institutional custodial solutions.
6) What are your projections for the market in 2018?
If you want to understand where technology is headed you need to pay attention to developers. Value follows software developers. Crypto is no different than the past tech growth trends. As my old mentor, Paul Maritz at former CEO at VMware once told me, “Developers are the best canary for where we should be focusing our investments.” One way to understand developer interest is to look and see where they are being hired and what technology they are utilizing. My favorite method is to ask developers about their personal side projects. This gives you the best understanding of the frontier of developer interest. For the last few years, if you asked most developers what personal project was taking up their nights and weekends, they would tell you about some mobile app. When I talk to developers today almost all of them are working on a side project related to crypto. To me, this is one of the most bullish signals for the long-term opportunity of the crypto space.
7) Why did you want to be apart of Apex Token Fund?
The tokenization of assets is a significant macro trend that is just beginning. Reducing friction while increasing access and transparency to investing while being compliant with regulations is something that we want to be a part of by working with the Apex Token Fund.