Kyle Samani is a Managing Partner and founder at Multicoin Capital, a hedge fund that invests exclusively in cryptocurrency assets. Before Multicoin, Kyle was a serial technology entrepreneur turned technology investor. He founded and led Pristine (Google Glass apps for surgeons) as Chief Executive Officer. He also writes up some of the best research and insights in cryptocurrency on Multicoin’s Blog (Link: https://multicoin.capital/).
1) What is your background? What brought you to the crypto space?
I’ve been around computers my entire life. I started programming when I was 10. I went to NYU to study finance because I thought programming was for losers. While at NYU, I realized that banking was for losers and got right back into tech.
I started my first tech company, Pristine, when I was 23. We built software for Google Glass for use by surgeons. I built that business to a few million of revenue, about 30 employees, and raised $5M in venture capital. Then Google killed Glass. I pivoted the company and left.
I found myself unemployed in January of 2016. I discovered Ethereum in March of 2016, and found it to be the most compelling piece of technology I’d ever seen. Given my experiences with Glass — with Google basically killing my business — I was incredibly excited by the prospect that no one could stop me from building on Ethereum.
My cofounder Tushar is my best friend. We met at NYU 9 years ago. He’s also started a tech company — ePatientFinder — which has raised about $11M in venture capital.
Of the two of us, I’m a bit more technical, and a lot more extroverted. Tushar focuses on managing the portfolio, assessing risk, and building the firm. I’m the face of the firm, and the lead analyst.
2) What is your fund strategy?
We’re a long-biased, stage agnostic fund that invests exclusively in cryptoassets. We are an alt-coin focused fund. But we do have some exposure to BTC/BCH/ETH. We do invest pre-ICO, but the vast majority of our portfolio consists of assets that are trading and are liquid.
The best way to get a sense for how we think is to check out our blog, where we publish our research and insights. It’s 100% free.
3) How do you analyze new investment opportunities? What is your fund process?
The first thing we try to understand is how is this problem being dealt with in the world today, and how can this new protocol cut out a middle man who is imposing a tax on network participants? Next we try to understand the size of the market: if the protocol works as advertised, how big can it get? Next we look at token mechanics, team, technical risk, and go-to-market risk.
Once we’ve developed some conviction, we assemble a list of questions and engage the team directly to review those questions. Once we have those questions answered and feel comfortable owning the asset, we introduce it into our formal investment committee meeting, which takes place weekly. In this meeting, we discuss how that asset can fit into the portfolio presently given everything going on in the markets. This entire process typically takes a few weeks at a minimum.
For example, in October, leading up to the Bitcoin 2x fork, we took a very different view on adding new assets to the portfolio than we do now. Moreover, we now have far more regularity clarity then we did just a few weeks ago: the SEC is signalling that they aren’t going to crack down on ICOs other than to thwart scams/frauds. There were rumors of the Korean government cracking down on crypto, but those rumors have proven to be untrue as the Korean government just issued formal guidance that takes a much more metered approach.
4) What projects are you excited about?
Right now, we’re most excited about Dfinity, and 0x, and some stealth projects that we can’t yet discuss. Dfinity is an outright Ethereum competitor that has a shot at displacing the almighty king of smart contract platforms. 0x is one of the most needed pieces of infrastructure in the Ethereum ecosystem. Check out the recent 0x analysis and valuation we published.
5) What are some of the technological trends you are watching in 2018?
In 2018, we’re really looking forward to seeing more legitimate Ethereum competitors emerge, a deeper focus on privacy technologies, and a lot more clarity on how to scale blockchains.
6) What are your projections for the market in 2018?
The Bitcoin bubble will pop up in 2018, 0x will “break” Ethereum, and the media narrative will generally turn bearish as pundits say “we told you Bitcoin was tulips” and “we told you Ethereum couldn’t scale.” We expect 2018 to be a period of heads down focus for teams between the outrageous bull market of 2017 and the fruition of many of the most promising technologies that will arrive in late 2018 or early 2019.