1) What is your background? What brought you to the crypto space?
In 2013, I built a point of sale system enabling Bitcoin payments with sound and Bluetooth. In 2014, I left Pomona College to cofound one of the first projects and the first ICO on Ethereum called Augur, a decentralized prediction market platform and solution to the oracle problem designed to allow people to speculate on anything. In 2017, I joined Pantera Capital to help manage the digital asset funds. We got into the crypto space because we’re all excited about disintermediating middleman, dropping costs, and making the financial system more efficient.
2) What is your fund strategy?
Our strategy for the ICO fund is to invest in token projects early on, help them out with both technical and business advice, and hold the projects until they maximize their value (usually around launch). We want to invest in the Amazons of the space, not the Pets.coms. Even if you invested in Amazon in 1998, after the crash you still would’ve been up by about 3x. We think there’s a ripe opportunity here because it is very rare when a new asset class is created, and this is one of those times.
3) What do you benchmark against? How have you performed relative to this benchmark?
We haven’t set a benchmark yet for the ICO fund as there haven’t been any ICO indices created yet. We will once there is a suitable one.
4) How do you analyze new investment opportunities? What is your fund process?
We look for projects that truly benefit from having a token. If the token isn’t needed, we think those projects will be forked and have the token removed since all of this stuff is open source and freely available. Typically, this means the token is used for something that people are willing to pay for, like security of the network. We also want to make sure we’re investing in things that make technical sense, e.g. if what you’re building would win you a few Turing awards [equivalent of a Nobel Prize in CS] it’s probably not very feasible, unless you have something peer reviewed showing you can do it. Finally, the business, market, team, and all the other factors you’d consider when making any investment come into play. We look for projects that have them all that we can help out. We have weekly investment committee meetings where the team decides whether and how much to fund various projects.
5) What projects are you excited about?
We’re excited about decentralized exchanges like 0x and OmiseGo, as well as projects like Origin [decentralized sharing economy], Virtue Poker, and anything that truly needs a token.
6) What are some of the technological trends you are watching in 2018?
We’re looking forward to seeing the successful launches of some stable-coins and further progress on scalability work on platforms like Ethereum.
7) What are your projections for the market in 2018?
I think in 2018 the ICO market will become more rational and start to demand more of the projects that are raising. It’ll start to mature. Additionally, more and more institutions will get involved in the cryptocurrency space in earnest, especially once Goldman starts trading Bitcoin mid-year.