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1 | P20.docx | And you hear a lot of applications say things along the lines of the unbanked, those that can access financial services in certain parts of the world. What that means to me and to the applications that I'm a part of and I'm helping build is we want to make it possible for anyone to be able to access these services or essentially to be able to generate income stream, passive income, whatever it is, within decentralized finance whether or not that person has five million dollars or 500 dollars. So it does take some thinking and some effort to build a protocol in such a way that it will benefit equally and not one before the other, but very much in a first come, first served type way. Someone that has 500 dollars, just as much as someone that's got five million dollars. So I think that is my definition of access and as long as everybody can participate without hands-down, from the get-go, it being the case that the person that has more money wins, I think you tick that second box that's called access. | Promise | Financial access and inclusion | ||||||||||||||||||||||
2 | P28.docx | A good thing, when we were doing our own due diligence on some of our fund partners, we were actually talking to people within the community who were running their own things. Everyone's always super supportive and whatever else, but they were talking about how this one fund was super helpful to them, helped advise them, helped with their growth strategy, helped push things forward and were just super valuable and strategic for them in those early stages. That is how most of these deals end up being created in the first place is one, you have a founder who also sees value in what you are building, and then they basically go to their venture partners who they have on board and say, "Hey, I have a really cool project you should look at, and this is it." From that, you are able to get a little bit of inside information of what they are actually doing and be able to make a decision on whether or not you should move forward with them giving you that capital and what they might do for you with that capital, whether it is helping you with your business, or are they just going to dump it in the end. Usually, most of these venture funds who are run by other founders who have made successful exits are usually the more valuable ones. Whereas if you go to Andreessen Horowitz or Draper or any of these larger ones, usually they're just in it for the money and they don't add much value other than their name. Maybe they, they're helping you with relationships with other larger organizations and other larger funds. I guess as an early stage project, we're more biased towards smaller funds. Interviewer: Yeah. Someone else in this study that we've been doing described his vetting process is considering VCs whowere former builders of projects or currently builders of projects. Is that similar to the mentality you're describing? Interviewee: Yeah. It's more added value in the early stages of what you are doing. They understand the struggles and the complexities of what you are building at that early stage and are able to help you and guide you if you do run into any problems as they occur. That's basically what most of these funds are in those early stages anyway, the ones who can add value for you. And then really, if you're adding fuel to the fire and you're just looking for large amounts of growth, you're going to be just looking for capital from let's say a16z where you want to get a 10 million or a hundred million dollar check and just put fuel on the fire. | Challenge | Financing dynamics | ||||||||||||||||||||||
3 | P6.docx | A lot of the blockchain startups, they think about a big vision and think very philosophically about their product and the value of their products, but don't really think about that it's actually user, so the whole kind of UX and user-centric approach to product design has only entered the blockchain space very recently. It's still not fully there, of course. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
4 | P14.docx | Because I've been in and seen these cycles over the last eight years...Some people will leave for a short period of time and then it'll pump again and ETH will be at 3,000, 4,000 and people have doubled their money on the recent local lows. Bitcoin will be at 40,00again and everybody will come back in again. I have this wacky belief that the ultimate stable coin will be Bitcoin. I think at some point in the future, I don't know, five, 10 years, I don't know, Bitcoin will be at, I don't know, three, 4, $500,000. And the volume will be so high and it will be so prevalently held that the price movements will be so minimal and it's truly decentralized and everybody will accept it that there's no need for USDC. Or there will be no need for USDC or anything else. That it will be the preferred medium of exchange. | Challenge | Speculation | ||||||||||||||||||||||
5 | P16.docx | And for me, [the fundraising process] looked like two months of call after call after call. I think at my peak, I took like 12 calls in one day. It's a pretty tight world out there where if you can get one VC to say, yes, they're going to intro you to their other subset of VCs. There's also groups of VCs that really dislike each other where they'll like back out of rounds, if a certain VC is involved. So all the petty politics that exist. I've been able to like learn a little bit about some of that stuff, but it's very opaque. Even for a founder who's done, I've helped other projects raise money too, it's pretty cut and dry. You set up a call, you give them your tokens, you run through the pitch deck, you run through the roadmap. If they like it, they'll give you a ticket, if they don't like it they'll pass. | Challenge | Financing dynamics | ||||||||||||||||||||||
6 | P11.docx | And ideally, this just results in higher quality, more transparent carbon credits, and you can see that eventually moving upstream to project financing and more supply being created. And again, what I think is more unique about them, at least in this emerging space is that they are actively engaging, not dismissing best in class climate scientists and policy makers from theworld. And they're working with them to create a solution that works for the existing voluntary carbon markets, but also that can be applied to a future better state. They also just have a really good, thoughtful team with highly credentialed people that are sophisticated operators. So the CEO is a Yale Law grad who worked as a corporate attorney and clerked for a judge before she started a Web2 company that she sold and then did this. And so she's steeped in a lot of regulatory and policy making work that needs to happen for this to actually be successful at scale. | Challenge | Financing dynamics | ||||||||||||||||||||||
7 | P11.docx | And it was the first time I had, I think, come across a use case other than things like remittances, that didn't feel abstract. It felt like a very straightforward improvement over call it traditional carbon market places and registries like that. So as we were talking about interesting ways we could see carbon markets brought on chain, we started looking around at companies that were being built and I think came away intrigued, but a little underwhelmed at the caliber of the teams and the quality of the ideas out in the market. You probably came across KlimaDAO at one point, maybe not. Klima is this kind of Ponzi economic model for putting shitty carbon credits on chain and then selling them at higher prices, and it achieved a lot of attention, but the underlying value add for the planet was probably zero, if not negative, but it, I think reinforced to us the idea that you can incent positive actions through focusing on like greed as a driver, like programmable money, right? | Challenge | Speculation | ||||||||||||||||||||||
8 | P5.docx | And it's a constant tension because these very high-minded principles are predicated on a structure that is different from the one that we have now. So the idea of decentralization is not meaningful to impose on a hyper-centralized society with hyper-centralized infrastructure. I am a progressive decentralization enthusiast. My thought is that we centralize to preserve user experience and we decentralize to preserve security. And we move in a progressively decentralizing manner. Once we have secured an appropriate centralized user flow, we decentralize under the hood, but it is difficult to back into an outstanding user flow if you start with one that is broken and complex and unfit for your audience that you're serving. | Challenge | Expansion to mainstream markets, Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
9 | P18.docx | And so I guess when you go back to that question of like, where does the value come from? Well it's the humans [working on the protocol], right?And the people, that are mobilizing around things. And so how do we just pay them more fairly? | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
10 | P13.docx | And so listen, sometimes if you are a bank and you are doing a large transaction, like an M&A transaction or whatever, maybe you don't want that transaction to be public on Bitcoin's blockchain, but maybe you still want to be able to transact. And so you would do it through a privacy coin for instance. So let's just say that there are use cases for wanting to do something in a private manner that are more than just doing it for a nefarious activity. And so I think looking at it from that sort of lens, you can say, "Oh, okay, I get it. I want to use Ethereum with the different decentralized applications. I want to use Monero for my business purposes, because I don't want people to know how much money I'm transacting with. I want to use Litecoin or some stable coin because that's my every day transacting, I don't want to have volatility with the market." And so you can imagine when all of this stuff gets bundled up and simplified into a very user friendly wallet in the future, and you're holding these different sorts of investments, different sorts of cryptocurrencies, but it's done in a very easy way, that at that point the user isn't even thinking of it in terms of cryptocurrency, they're just thinking in terms of, "I've got my digital wallet and this is what I do for this." You know what I mean? | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
11 | P11.docx | And so we brought in LPs that can help us plan a flag, so best in class crypto entrepreneurs, best in class tech investors like bank capital and others, and then best in class climate scientist, people from that universe. And our thinking was if we could just connect dots to ensure that people in Web3 were building on climate science and people in climate science were working with legitimate Web3 operators in what they were doing, we could move the entire space forward more rapidly. | Challenge | Financing dynamics | ||||||||||||||||||||||
12 | P16.docx | And then I would say the VC culture is really fascinating because a lot of people became absurdly wealthy who got in in 2016, 2017 just because they were they're early, but they're not necessarily good capital allocators. They don't necessarily have value add and they're not necessarily builders, they were just early. And so I think in this cycle, we're starting to see some of those original venture capitalists that just happen to get rich and just chuck money at literally every project, it's them throwing darts, starting to fall by the wayside in favor of the more professional VC grade institutions. | Challenge | Financing dynamics | ||||||||||||||||||||||
13 | P25.docx | Speaker 1: So does this mean that you don't contract for operators that don't reveal their identity to you? Speaker 2: No, I do. I do. But usually in that case it's payment up front. | Challenge | Financing dynamics | ||||||||||||||||||||||
14 | P11.docx | And to me, KlimaDAO, it's kind of a lazy example, but I'll start there cause it's the easiest of where this goes wrong. I think there, there are a lot of issues with Klima. I'll give them credit for being one of the first in this space, and I think they helped a lot of people appreciate the size of the opportunity here, and they generated a lot of money from people that were not interested in climate very quickly, but at its core, my problems with Klima are 1: that it was founded by a bunch of anonymous founders. I think the anonymous movement is a cultural artifact of crypto that maybe is okay for some parts of it. I still wonder, at some level, if like the ideology of crypto affects in practice, it's resilience and stability over time. We see it now with all of these decentralized platforms being revealed as very centralized. But particularly when it comes to climate, there is such a need for credibility and trust. I think you lose when you don't understand the context and experience of the founding team and just have to take it entirely on their word on Twitter or on Discord. And while that might work for crypto natives or degens, it doesn't work for people from climate that are seeing this innovation for the first time and are saying, how can we trust these people are in it for the right reasons and know the history of this movement and the context of what we're actually trying to address here. So that's one issue. It's that its anonymous foundings | Challenge | Financing dynamics, Speculation | ||||||||||||||||||||||
15 | P22.docx | And when I talk to other investors, most of them don't have a clue on what they're doing. They're investing without understanding anything about the blockchains, the difference between the blockchains, token economics, crypto marketing. They're not even able to analyze the team members and to make sure that they are solid. And when I ask these investors, "Why are you investing?" they say, "Because there's a very high chance that we will succeed even if we don't know." The others are playing it dumb. And there's another type that is arguing with me and explaining to me why they don't need to understand these things while investing in crypto projects because everything is one big speculation anyways, which is completely wrong, in my opinion. There is a lot of speculation, but not when you're investing as an investor in early stage crypto startups. You just need to know how to choose the winners and you need to have a proper way of doing it. | Challenge | Speculation, Financing dynamics | ||||||||||||||||||||||
16 | [anonymized] | As a female founder, there are a lot of rooms that I walk into that are not ready to welcome me. And so if I catch that vibe, that call is over. I'm sure as you know as a woman, there are just certain vibes that you pick up on that note, "Okay. I am not a celebrated guest at this table. I don't need to be here at all" | Challenge | Financing dynamics | ||||||||||||||||||||||
17 | P4.docx | As an investor on behalf of other LPs, we are always trying to think about value that we create for our ultimate LPs, but the investor's brand in the market and the long-term brand that you create by being founder- and company-friendly is going to be more important than the relationship with your LPs. The ability to align those and communicate to your LPs. And by the way, most funds are 10-year investment vehicles, so you do have 10 years to materialize value. That is something that you coordinate and align between founders and your own LPs to ensure that. Now, are there bad actors out there that get tokens and immediately try to sell them on day one and materialize value? Sure, of course there are. I'm not here to tell you that there aren't. However, the probability that they're going to get allocation in the next deal and the next deal and the next deal is truncated every single time that they do that, because that founder is going to reference the other founder and say, "Hey, did investor X sell off their portion of tokens on day one?" And they're not going to want them in their round if they have the ability to choose someone else. That is actually going to hurt long-term value generation for LPs more than the short-term value that you generate. | Challenge | Financing dynamics | ||||||||||||||||||||||
18 | P2.docx | At the end of the conversation, primarily, I have a crypto VC that I declined their investment because ... I think the way, they play is quite different with the way that I would work. So I'm a lot less speculative. I know that with the raise we currently have, it's not small, but I think it's very important to think about the value, about the shareholder value, or go-to-market strategy. And I think with a couple of [crypto VCs] I talked to, they were very much into the ICO hype. [They said] okay, you need to think about it for another coin, and there's a number of strategies you could go to for drive hype, and help your private investor to have a quick exit, but as I said, just both a couple sort of bunch of people I met have quite a strong mentality around a very digitall native approach. And he started showing me a number of tokens. He has like five crypto VC, and he's really into this buy and sell model, and very quickly moved.And I think that is something that I'm quite hesitate about. Yeah, and otherwise, because two of my other investor Web2, they didn't really ask so many question around the token. And then my third biggest investor is a crypto billionaire. And why he investing to us, is because he's saying in general, crypto is now moving to more sort of like environmental friendly ways, that's where the future will go. For he knew about this direction. It's why it was so big on that product. | Challenge | Financing dynamics | ||||||||||||||||||||||
19 | P16.docx | Ironically enough "builders support builders" is kind of the mantra that I've kind of emerged with. And this is an interesting dynamic I've started to see. So little projects that raise 5 million or 10 million that are like, let's just call them technology purists that are genuinely good people with a good vision. What they'll do is they'll turn around and they'll go invest in other builder folks' projects. So I'm starting to see networks emerge of, and even DAOs, actually part of the DOA, I won't give you the name of the DAO, but it's got like 20 people inside of the DAO and there's deal flow that rolls through it and it's all founders. These are all people that have built legitimate projects and it's actually a super cool environment because you can hop on a call with six, seven people, you have someone pitch and everyone's focused on the technology they're focused on the adoption. It doesn't feel like a traditional, doesn't feel like there's any sharks in the room? Because it's just devs that have a lot of money that want to support other builders. So that's who I tried to target was as many... Or the VCs, the best type of VC are the ones that are like, "How can we support your developer side of things?" I'm like green light, you get it, you know we need, you actually care about product, right? It's like, if you care about product, you care about users then I'm going to have to make a read right here and say you're a better option than the other 15 VCs that say, "I'm sure you've probably heard this before, but we can help on the marketing side of things." It's like, yeah, come on, no that's not what's going to make this succeed | Challenge | Financing dynamics | ||||||||||||||||||||||
20 | P16.docx | But I think that's a shame on the VC side that everyone's so aware of legal risks that we can't even put money into the United States for the venture capital side. That means the United States misses out on tax dollars, they miss out on all the benefits that they could have from welcoming in all of these innovators. So I think that's kind of a sad, brutal honesty, you want to talk about that side of the space. So that's the first piece is just where capital gets allocated to it's really not the US, even though there's teams based out of the US, that's not where the money's living, right? British Virgin Islands, lots of fun stuff. | Challenge | Financing dynamics | ||||||||||||||||||||||
21 | P20.docx | But I think that's our view is to give [users] returns, is to give them the ability, a platform, that makes them as much money or more money being a user than being somebody that just holds the token and HODLs. They just wait for the price to go up. So we'll take our time building it but I think that will be our first attempt or trying to fix that problem. | Challenge | Speculation | ||||||||||||||||||||||
22 | P24.docx | But I would also say another interesting concept is the concept of maintaining anonymity in the decentralized finance space [...]. You can be anyone. You don't need to go through all of the same anti-money launderingor know-your-client hurdles that you would in a traditional finance sense, that you don't. At the end of the day, it didn't matter who our end client was. We don't know who they are. We just have their wallet address. We don't know their names. The anonymity part is very interesting and it presents a different set of challenges of course, but I think that's part of what makes that space so unique. | Challenge | Financing dynamics | ||||||||||||||||||||||
23 | P20.docx | But it also means that someone like me, I watched the bull run come and I watched it go and I didn't participate in it. There are disadvantages to [bootstrapping] at a personal level because of what we're trying to build and sticking to our principles and not selling when our token was $160 and today, I think it's trading at $1.20. I think a VC would have exited at $150. It's just the way the system works. | Challenge | Financing dynamics | ||||||||||||||||||||||
24 | P27.docx | But [these protocols] had a very similar common theme, which was no early pre-seed or private round sales. However, after the fact, they are still talking to VCs and they are still working with market makers in the space because while I think inherently VCs can be very extractionary,they also provide a lot of value to the space because they help finance a lot of people's ideas. Some work, some do not, most do not. And I think ultimately that is a positive for the space. I don't want VCs to disappear. I just think that they've, for a bit of time now, especially with the internet age and popularity of Y Combinator and Y Combinator style platforms and things like that, I think right now VCs have been granted this ridiculous disproportionate amount of ability to wield influence and they obviously have a lot of capital to back that influence so I understand why, but I would like to see a little bit more parity between enterprise and retail in terms of opportunity, not necessarily capital. I understand that it'll be impossible for me to just wave a wand and make everything equal, which is not good anyway, but I want the opportunity to be there for people to be equal. | Challenge | Financing dynamics | ||||||||||||||||||||||
25 | P29.docx | Interviewer: But you just described yourself as being someone that acts as a provider that goes between a developer and the native blockchain that they might want to develop on. Doesn't that also mean that you're a middleman? Interviewee: So I misspoke, and if you go back to the recording, you'll hear me say, well, actually it's not us protocol run by smart contracts. So we're the middleman to the extent that we need to drive deal flow and activity in this protocol just in terms of marketing. But once the protocol's out there and live, we'll have some stewardship of it for the first three, six, nine months to make sure it doesn't get hacked, make sure the property is set. But 100% the goal is we want to dissolve the company, dissolve the startup, and the protocol is still running in the background by itself in a very healthy manner with the community that maintains everything. So while this thing is brand new, it's a baby, I strongly believe that there needs to be firm opinions and a strong vision to be able to move quickly so that centralization that could be thought of the middleman, but 100% there's this idea of progressive decentralization that we definitely subscribe to. The goal is can we leave and have this thing still grow and still perform just as well as it was when we're here? | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
26 | P20.docx | Decentralization is important but it's not the end all, be all. Not everything needs to be decentralized. I'll give you an example. We have been asked by our community over and over again to set up a decentralized autonomous organization. And I live close to, work close with a lot of developers. And the moment you mention DAO, they all scramble and run away. Because essentially what it means is those people over there get to tell me what to build, when to build, how to build it. And they get to give me as much feedback as they want because they own a ton of tokens. They don't necessarily know what's good for the market and a lot of times, and I find this unfortunate, but a lot of the voters basically vote for stuff that's going to make them more money. They don't necessarily vote for things that's going to be good for the platform. It's not always the case but oftentimes it is. So I think from that perspective, a centralized approach does help. Now this necessitates a very high standard of building things. You need to build, and it's hard to do because crypto is littered with folks that just rob and cheat and hack. But if you can find a developer that's willing to build something that's self-enclosed and is willing to make decisions based on a vision that they have of what that particular, specific area in the blockchain, in this case, it's finance, is missing and what it needs. Then I think centralizing the power in that person's hand or those people's hands, build that thing, and let it go is worth it. So from that perspective, centralization is important. It also limits ... Centralizing things actually limits the amount of people that have access to the code base, that have access to breaking it, hacking into it, and things of that nature. So that's helped us. We haven't had billions in our pools but we haven't been hacked. I don't want to ... Knock on wood. Anyone can be hacked. But I think what has helped us is the fact that we have one source of who built what we have and trusting him, the group of us. And then understanding once we're done, it will be released into the blockchain and no one can access it anymore. I think that's a standard of centralization I'm ready to accept. | Challenge | Balancing organizational needs with stakeholder participation, speculation | ||||||||||||||||||||||
27 | P13.docx | First and foremost, you have a fiduciary responsibility to your investors. And as a ideal or whatever I can say, that is the primary goal, is to generate the best return that we can. Being the first one in whether it's to an NFT project or to a company, and the idea is to hopefully grow that to be to the benefit of everybody. | Challenge | Financing dynamics | ||||||||||||||||||||||
28 | P26.docx | To address the first point, if [VCs] participate [in the fair launch] equally with everyone else, they have an opportunity to get very good deals in the future. I'll leave it at that. The second point in terms of the vesting period, you can actually make a liquid version of that, and actually borrow against that, or find ways to monetize that in a way where you're not actually selling your actual locked up positions, but you're still creating a sell pressure on the overall underlying asset. That still happens. | Challenge | Financing dynamics | ||||||||||||||||||||||
29 | P28.docx | For us, [the VC funding model] is just token sales as a security. It depends on your business as well. If you're going to be a revenue generating business, you probably want to do equity. If you're going to be a platform where people are building on top of you and you're providing utility with a token, then you're probably going to want to sell a token. But if you're going to do both, maybe you do a token and equity sale. For us, we did a token sale first, but we do have some revenue-generating products that we're going to be bringing to market, and that's when we'll probably do additional raises with equity | Challenge | Financing dynamics | ||||||||||||||||||||||
30 | P29.docx | Founders are definitely undereducated on this and again, I think it kind of goes to crypto's being super exciting. There are a lot of first-time founders getting into crypto, they're just extremely enthused that they have a term sheet for a $60 million evaluation on a pre-seed round and they're raising three million off of that and it's because all their investors are hedge funds who understand the game. But yeah, yeah. For what's worth, I also have to learn it semi-the hard way. During our fundraise, I started noticing two different types of investors that kept talking to me, VCs and hedge funds. And I was like, why are these hedge funds so enthusiastic while the VCs are asking actual due diligence questions? | Challenge | Financing dynamics | ||||||||||||||||||||||
31 | P27.docx | Interviewer: What do you think is the risk that the fair launch that you're planning runs a risk of running afoul of securities law? Interviewee: Good question. So we're working with a really strong experienced lawyer in this space who works quite often on IP laws and securities for Web3. We are not ascribing any value to the governance tokeninherently. The participation of the user is to be entering the actual DAO. Essentially from day zero, we're not a public company or entity. All the core contributors that are working on the project and will be working on the project effectively are hired by a separate developer corporation, which is effectively saying that we're all temps. There's no beneficial owner to the protocol. We're just consultants that are hired, and anyone that does work for the protocol at any point, it becomes a consultant. Well, I can't say what securities laws will look like to tomorrow, today to the letter and the spirit of the law we are in compliance. I'm not too worried about that. | Challenge | Financing dynamics | ||||||||||||||||||||||
32 | P29.docx | So also my training was in sales, and it's just one thing you learn in sales is that it's mildly suspicious, actually, it's very suspicious when a customer you're selling to, they say, "Yes, I'm all in. Let's do it. Where do I send the money?" 15 minutes into the call, into your first call with them. It's like, "Whoa, okay, sure." But just from like bro-science in the sales world, it's like, no, be careful of that because 80% of those don't close and they're just being excited because they're just the wrong person. I don't know, they have their own nuance, but I don't know, they just tipped off like a sales signal in my head. | Challenge | Financing dynamics | ||||||||||||||||||||||
33 | P1.docx | I am an operator of sorts, in that I'm doing work right now with [several projects], but I think more broadly, something that many Web3 companies have used me for is to be the grown up voice of reason. A lot of these teams are very new, very young. I don't think they realize that a lot of these challenges have been worked on before. I think every scene thinks they're doing something for the first time, and increasingly, because I do speak to VC friends a lot, I've been asked to kind of help them diligence certain companies in the Web3 space, but to your point, everyone I meet in Web3 is an investor and a founder. People don't tend to have one role. It's a very blended world and I think that's why it can be very hard to understand from the outside. There feels like a clearer delineation between certain worlds in this space than I found in past lives. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
34 | P2.docx | First of all, I wanted to have quite an international investor base, because crypto itself is super global from flight landscape, and climate is also a global problem. And we're not going to fix the European climate change. But in the beginning, I wanted to have a more diverse investor profile. And also I think my style is not necessarily a protocol. So we are not issuing tokens just for the moment. So the investor in my cap table, I will say they're all pretty much Web2 investors. | Challenge | Financing dynamics | ||||||||||||||||||||||
35 | P18.docx | And the foundation, it's not like they were malicious or anything, but they had kind of gotten away from their, I think mission in the genesis. The first thing I did when I started was the second paper I wrote was about their elections, they were hosting their board elections. And so that was the process I followed from [for several months]. It was like, oh, it's happening next month. And it never, nobody really wanted to make it happen because it made the people running the system more accountable. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
36 | P20.docx | I can only tell you what we think the solution is. I don't know if it will work. I don't know if the others will agree with me. But ultimately, a significant portion of the participants in decentralized finance are there to make money. And they're, below the layer, they're driven by certain human instincts. And I think the solution is going to be connected to tapping into that human instinct and causing it to act a certain way without causing it to act a certain way that benefits or increases or converts, maybe, them from a participant to a user. That's the solution we're looking for. Okay, you want to make money? Great. Here's a setup that causes you to be a user but you're going to make money. You're not just using it and hoping. No. You can make just as much being a user as you would be a participant. And if we can get to a scenario where the user can generate that kind of return comparable to buying and selling and creating bots and using [other technology] to run strategy, then I think we may be able to broaden the space, the category of participants that are users beyond what I'm guessing is 50 percent. I mean I might be exaggerating somewhat but it's large | Challenge | Speculation | ||||||||||||||||||||||
37 | P24.docx | I could manage the Twitter account and make casual digs at a competitor via tweets because I guess I am good at making puns, but that's not something I personally would feel comfortable with. Especially, I don't view that as being very professional from a long term standpoint. I don't feel like bringing up your competitors even in a joking way will provide anything that's productive to the business flow. I don't see clients being converted because of a funny tweet about a competitor. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
38 | P24.docx | I feel like it was just very noticeable in the sense that the product spoke for itself, but when the founders would speak about the products, it wouldn't really entice me anymore. I feel like their website was enough for me to recognize the value in it. But then when it came to them forming out a pitch deck and then seeing what they put in it, I was like, "Oh God, I hope they don't send that to one of my funders. Granted, I would say he's just a major dreamer and an idealist and he had this very intricate plan for the goals for the company. And that's fantastic. I think it's really important to have goals that set out. Where do you want to be in three to five years? But at the same time, your fifth step of your plan doesn't need five sub bullet points. It's even deeper into something that's happening way far off that you still need steps one through four to come into fruition. I feel like that was a big thing where you're a dreamer, that's great. I'm glad you have goals but we need to stay realistic and we need to stay a little bit more prescriptive about what we're trying to do and focus on what is it that we do right now? What value do we provide right now? What is our next project as opposed to big dreaming goals. And I think that took away from the immediate success, especially during such a volatile market. | Challenge | Balancing organizational needs and participation, financing dynamics | ||||||||||||||||||||||
39 | P18.docx | I think the competition between different protocols, will be the thing that ruins us, if we just can't figure out how to collaborate better. So one of the big things I didn't like about the [protocol] foundation was we were constantly comparing ourselves to other protocols and saying we're better. And that we're faster, we're cheaper. We're all these things. And that's an industrialist mindset, which becomes a race to the bottom. From a marketing perspective, marketing shifted there in the industrial era where it was like, let's make things faster, cheaper and get them in front of as many eyeballs as possible, and just play that metrics game, and that doesn't work anymore. And it's not a way to form a sustainable mission. So I think that as these protocols start to compete against each other, and we don't just see the value that each one generates and how can we just work together and interface better? | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
40 | P9.docx | I know why people are a little reluctant to have more money come in, because of course the whole idea of all of this is going to get perverted. Absolutely. So the original idea is this decentralization and all that, it's all going to get perverted. But the technology will still get used. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
41 | P16.docx | I mean, essentially ICO is off the table because it's just, there's way too much legal risk in 2021 and 2022 to kind of do an initial coin offering to a general public. If you do an ICO and there's US citizens that are buying those tokens, there's a very good chance you get classified as a security and at some point future attention, right? So then it's like, all right, what's the alternative route? You can do a private raise and it's going to be private raise with non-US citizens, with people that have entities in legal jurisdictions that are allowed to work with each other capital-wise without getting flagged or without it being wrong within those jurisdictions. And yeah, you raise the money [that way]. | Challenge | Financing dynamics | ||||||||||||||||||||||
42 | P12.docx | I mean, if nothing else, there's a level of fear that non-grandpas in the space feel. I mean, I bought a lot of my, I guess, second round of investing in crypto, I bought in 2017 at the highest, highest, literally the highest peak of what everything hit. I literally bought one of my tokens at the highest point that it had ever been until last year. And then I watch it go down 90%. | Challenge | Speculation | ||||||||||||||||||||||
43 | P24.docx | I spent a lot of time on LinkedIn. I think as my time progressed in this space, I leveraged Telegram a lot. And I feel like that's a very Web3 blockchain crypto native way of communication. It's definitely not an app I use in my personal life. And it's definitely not an app I would use in my professional life prior to working in this case. And then the founders really stressed the importance of me having a Twitter presence, which I quite frankly do not have. I don't really like Twitter. It's just not my preferred method of communication. If I have something to say, I'm really not trying to do it in 150 characters or less, that stays there forever. It's not my personal style, but I guess that's a major indicator in that space as well about how reputable you are is your Twitter presence because I found incredibly interesting in the sense that half of it was just memes and I wouldn't say very reputable, reliable information, but people really do... I'm sure they take it with a grain of salt, but it's just interesting to see the correlation between people's perception of your credibility in the space towards your Twitter presence. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
44 | P11.docx | I think another challenge here is like Klima specifically problematic because at its core, it's a Ponzi game, right? Everybody's aware of it. It's not a scheme, but the entire value is predicated on just holding and not selling. And I think a lot of people who came into this space were attracted to yield more than they were attracted to any kind of impact. And so there wasn't really much scrutiny early on from these degens of the underlying assets that were being purchased, which in this case were really like low quality carbon offsets. And so over time, you started to see this large rabid community of degens focusing on yield, protecting the entire organization against very valid critiques of the underlying fundamental value, and that to me feels toxic. | Challenge | Speculation | ||||||||||||||||||||||
45 | P20.docx | I think decentralization is not meant for everything. I think the moment you can point to it in an objective way then it's a standard we should try to live by. Especially because there is mercenaries everywhere in crypto. It literally is the wild, wild west. I've seen people move 10 million dollars into a pool, make 400 grand, and two weeks later, move their money out. The money gets moved to wherever the rewards are and that's good for them but it's unfortunate for the space. | Challenge | Speculation | ||||||||||||||||||||||
46 | P18.docx | I think it's good because it removes a lot of the people who are just speculators, who aren't passionate about the mission, and actually want to contribute, if that makes sense. I mean, I was an artist in the space for a year and a half after in the whole mania and I never made an NFT, because to me like what an NFT currently is, isn't what it's... It's not what it's... It's not conducive to like what it's supposed to do, like the technology goes a little bit deeper into things like royalty distribution and stuff like that. And how we just, again, coordinate like getting away from capital and looking at labor is another thing. | Challenge | Speculation | ||||||||||||||||||||||
47 | P18.docx | I think on the leadership and the control thing, something I felt is you always need leaders to an extent to make calls on things quickly, but they shouldn't have as much power, that power should be able to be taken away quickly. And there should be more systems in place for transparency. So I learned that just from how the network validates on a technical level. [...] But, what you get there is a system where these people are controlling the network and it's very efficient and people trust the people who are in power, but at the same time, we can monitor their computers consistently in what's going on there. So we can take them out of power [quickly], if there's an issue with what's going on. How do you build that on a human level, I think is the first thing, so that decisions could be made quickly and people don't run around like chickens with their heads cut off. And there can still be leadership there. But again, there's more transparency in why those people are making those decisions. I think that's just a problem we have to solve. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
48 | P1.docx | I think particularly the groups that I'm in, they're not the ones that go under the headlines and that take people's money, it's all a little bit hidden and I think that's a shame. I think the Gitcoin, for example, basically the kind of nonprofit YC for Web3, they've given out over 65 million to open source projects. They've been foundational at funding multiple other entities in Web3, but they don't particularly talk about themselves very well. They're not out there beating their own drum. People that know them, love them and feel grateful to them, but there is a challenge around what the public sees and what the public sees is Bored Ape Yacht Club and all of its nastiness and grimness | Challenge | Speculation | ||||||||||||||||||||||
49 | P12.docx | I think personally that, to be in the crypto space for five years, you're a grandfather. To be in it for 10 years, I mean, you're ancient. You might as well be dead. A lot of the people that have been in crypto and blockchain until 2019 ... let's say, 2020 when the real big shift went, beginning of 2020. The people were in it before ... Let me step back. People don't like change. Even radicalists that want change don't like change.I know that sounds stupid, but I actually believe that. These people that want climate change, if all of a sudden, climate change happened, they'd have nothing to fight against. And they'd have to go find something else. It's kind of a weird situation that I believe. I'm not saying that we shouldn't fight for certain ideals and try to change it. But people in crypto, a lot of them got into it because of this belief of, "Screw the system. Screw the government. Take control. I'm not going to listen to you anymore and I'm not going to do this. And I'm going to hold Bitcoin." A lot of the people that are coming into it don't think that way. So yeah, I think that there's a lot of people who are like, "We can't give up our ideals," or, "We can't give up our fundamental core." But I think that these people have been left behind and don't understand that things change, that things move. And things are fluid, whether we want it to be or not. So for institutions coming into the space, I don't think anyone would say that institutions coming into the space won't help grow blockchain and Web3. They might say it's bad, but they can't say it won't grow it. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
50 | P1.docx | I think something that I see as my role or one of my roles is being a little bit of a translator in helping groups come together and understand, particularly one group that I'm in has been really surprised that their user base, their community is quite diverse, but the stewards that volunteer themselves are always white men and it's been really surprising to them because they really want the governance group to be more reflective of the community, and it's exactly the same as Web2 in terms of who volunteers, who has time to volunteer. There's strong sort of undercurrent in Web3 that all of Web2 got everything wrong that I think is just not factually correct at all. Every generation thinks it's inventing things over from scratch. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
51 | P22.docx | I think that it's not the space more than human nature for greed and human nature for not caring for others. Even though people keep saying that they will do anything to help others and blah, blah, blah, most of them will not do that. Most of them are just bullshitting. And as one of the greatest philosophers that I love said... I hope that I'm not confusing it with someone else, Thomas Hobbes, when he said that every man for himself. So that's exactly what you see with crypto. And it's not crypto. It's crypto bringing it out from people. And it's just human nature. And because it's an unregulated market and everybody can do whatever they want. And I've been saying for a few years, it's the wild, wild west. And it is a wild, wild west. People will allow themselves to do it. If it would be another type of technology or another type of system, they will just abuse that. By the way, exactly has happened with credit cards. I remember when credit cards came out, it was abused exactly as crypto. Same thing, but it was much less because you didn't have social media. You didn't have the exposure that people can have. Today, you can get exposure globally within minutes, even seconds. You didn't have that 10, 20 years ago. Definitely not before. So I think that the combination of the tech, social media, everything around the revolution that happened with the internet and connectivity, combining with the blockchain technology and crypto and allowing people to be completely anonymous, that's the lethal combination for everything that's happened. | Challenge | Speculation | ||||||||||||||||||||||
52 | P8.docx | I think that this is probably... I'm obviously not a super old person. I haven't been around for the.com crash or the housing market crash bubble, et cetera. I'd imagine these dynamics have played out in the past where a new technology emerges. And I think the first folks, the early adopters are often sell its, they often need to believe this, the power of this transformed technology. And in the instances where there is some utility there, there will be some who earn a lot of money or earn a lot of capital, et cetera. And I think what likely and again, I think we've seen this over time, but we'll see what happens in this downturn as well. What differentiates those who have sort of more long term success versus those who have maybe a more short term or sort of a couple quick gain, easy gains is those who actually can maintain some fundamentals and can stick to those as far as their investing dynamics. And so if that's tied to an ideological belief, if that ideological belief has fundamentals. So in this case, if it's tied to centralized finance, the power of blockchain to maybe support governments or to access people in new places or whatever that ideology might be, if there are fundamentals that are rational behind that and that becomes an investment strategy, then potentially you could have some long term benefits and that could be a strategy that they use going forward. If it's based on the next best thing or based on get rich quick or based on sort of herd mentality, then it might not be as much sustainability. | Challenge | Financing dynamics | ||||||||||||||||||||||
53 | P6.docx | I think the companies that care about the values from the start, they would do all the funding and their whole business model. Because they live the values, they would also live them through, it would trickle through. They're companies, I think, Solana is a good example and NEAR too. They're building cool protocols, but they were always very, very heavily VC funded. They didn't even pretend that they were so decentralized. Their value prop is kind of open on the website. They just say, it's fast, come join. It's a cool community. A lot of creators here, it's fast, easy to build on. They didn't even play the whole, "Look, we're so decentralized and power to everyone." They just say said, "We're blockchain, we're fast." For them, [...] they're not even pretending that they're not after the money. The Solana foundation, Cosmos is similar, NEAR, they have these crazy funds and are pouring it into their ecosystem. As you said, there's 750 million, zero knowledge fund. They are creating their own D five fund where they, of course only fund projects that are running on Solana or on their own platform. I don't think it's that bad. We, for example, [at my company] we are very value driven and it's got its downsides too. [...] When you go to other websites, they say, "Look at our big ecosystem and here, featured start outs, featured apps," and so on. So we are also changing that a little bit, but I guess, when it's at the heart of the founders and the exit team and everyone who works there, you would rather do the right thing than the other way around, even if it stifles being quick or very user friendly, or so. | Challenge | Financing dynamics | ||||||||||||||||||||||
54 | P19.docx | I think the damage always comes from the human bias, the human element, rather than the technology itself. And so like anything we need to be checking to see whether we're following the right principles and how do we build a system that has credibility, sustainability and where people feel that it's fair. And so I think we're going to be, there's dealing and tackling those issues for many years to come because it is easy to sometimes be a little bit wanting to do shortcuts to make it simple. And then finding out that you've ended up with a bigger problem than what you started off with. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
55 | P3.docx | I think the decentralization aspect, I'm not a hardcore decentralized or nothing type person. So like Stripe, a lot of what Stripe does you just don't see, you're using Stripe a lot more than you think. It's infrastructure that's allowing the world to operate in a digital sense. And if they're going to use crypto rails behind the scenes, I think that's super valuable. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
56 | P29.docx | I think the main challenge is moving towards models is that there aren't any good robust tooling. For example, if I just want to start up a diverse C corp and Web2 startup and I want to get investors and do the whole dig. I just want to do the whole SOB (start of business) journey in Web2 context. The tooling for that is very robust, $500 to Stripe, Atlas, a thousand dollars to a law firm to create the template drafts look them over maybe another $5,000 for your accounting tool, your Corda, what else is there? And the bookkeeping software, right? It's like boom, for $6,000 plus maybe $99 annual fee, you're fully incorporated and you have everything you need to do to actually run your company in the proper way. Now we go to crypto though now it's all global. People are anonymous. Is this person a terrorist? Is he not a terrorist? They want to get paid in this token, not that token. How do we implement the governance? People go into these shady things in the Cayman Islands and such entities. Who's actually controlling the tokens? There's just no good, robust tooling. So again, everything that we're looking at right now is made in 2017, '18, '19, '20. So they're just using... They're literally just hacking things together of how do we make a digital native corporation that still somehow plays by the rules, but people start seeing opportunities to not play the rules, but it's also okay because no one knows. So there's a lot of weirdness happening online | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
57 | P5.docx | I think the token incentive system of public ledgers has misaligned many people's pursuit of these values because the short line between where they sit and a token allocation event that makes them a billionaire is a lot more appealing than taking it on the chin for a few years and trying to define a new way for value to flow. | Challenge | Speculation | ||||||||||||||||||||||
58 | P1.docx | I think the way that VCs have behaved..., Well not all VCs are the same, I should be fair. I think if the goal is collective ownership, it's a very different thing when 20% of your company is owned by one player or a couple of players. I think there are some funds that have a decent amount of respect in the scene so I think Paradigm and Variant get called out a lot as being funds that are known as being empathetic, that really understand but you've also got a lot of big funds coming into the scene now with a lot of money that like company building in that they want to be on your board. There was a great FT piece a few months ago around crypto companies not giving up board seats, which I have lots of opinions on. I think companies need great stewardship. Do I think that stewardship always comes from VC? Not really, but I do think they're percent a particular stakeholder. I think the reason that many of these founders are reticence about VC is they're not sure what they're building yet. They don't want to give up control. They're happy to not have control personally, but they want the control to be collective amid the group of folks they choose to build with and for. | Challenge | Financing dynamics, Balancing organizational needs and participation | ||||||||||||||||||||||
59 | P1.docx | I think there is a very strong sentiment certainly right now that in markets like these, all of the fairweather friends disappear and many of the folks that I'm working with, they've been through it already. They went through it in 2018, 2019. I was talking to Scott at Gitcoin and he said, I remember last time because the phone stopped ringing, but we were still building exactly the same thing. It's just that people..., It wasn't appealing anymore and that was kind of fine because it meant that we could focus on getting good at what we were doing and understanding that people that had left were folks that never really believed in the ideology. They were there for the money. | Challenge | Speculation | ||||||||||||||||||||||
60 | P11.docx | I think there's a real tension there. And maybe to me, and again, this sounds to me as somebody that's not truly native to this space, I think ideology applied to needed societal solutions is dangerous. I just think in this specific use case of climate change, ideology hurts more than it helps. And at least so far that's what I've observed where early on, I think it was very cool to be like anon or pseudonymous in this space. And over time you've seen more and more people reveal themselves. And those that haven't have been critiqued for the inability of everybody else to actually kind of like vet their work, crosscheck conflicts across different projects, all that stuff. | Challenge | Financing dynamics | ||||||||||||||||||||||
61 | P16.docx | I think there's this idea known as layer zero. I think it's like the Ethereum Foundation or something. And they said something profound on the lines of humans are the base layer of blockchain, right? And the properties are enforced by the technology, but the properties are created by humans. And I think one of the problems with a lot of money coming into the space is there's less and less technology purists and it becomes more and more commercialized. And this happened with the internet too. And so I think it's just something to be aware of that these really strong, potentially libertarian values at the beginning of crypto, they're now marketing terms, they're they're buzzwords. And I feel like it's really tough because I'm seeing less and less people in the space that truly believe in the ethos and are willing to stand firm on it. And I think without layer zero, without people holding firms or ethos and morality of what the stuff can unlock, then I think that our industry is set to just become yet another financial market. It's just a more efficient market, that's what we're headed towards it. When ethos leaves the space, all that's left is a more efficient financial system, which is that a good thing? Sure. Is it generational changing? No, I don't think so. So I guess that's what I would advocate for is just keep your eyes open for the projects and the builders that genuinely have an ethos behind it that are fighting for properties and not liquidity, and by properties I mean attributes. So yeah, I guess that's my final little statement. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
62 | P26.docx | I think this is really core to our business, actually. Seeing how previous DeFi protocols have actually raised money through the more traditional route of raising money from VCs, selling discounted tokens to them in a private sale, and then doing a public sale. Then, what happens is then the VCs kind of dump, and then the price, there's a huge pressure on it. We have not taken a single penny from VCs at all, intentionally. It doesn't mean there's not been people trying to write me checks, and we're purely doing a fair launch. That's our only access to raising money. That means everyone in the world that participates in it, gets an equal opportunity to purchase it. We are telling these VCs you participate in that fair launch as well. Then, we'll make note of who participated, and put how much in. Then, we'll do OTC deals afterwards with the community's consent. What that does is first it's a pure Web3 ethos. The community loves that, and will support us more. Then secondly, it will prevent the sell pressure of the token, and actually cause healthy price action, which is really core to protocol tokens. Price appreciation is very important to us, secondary to the peg, and this is becoming the norm. | Challenge | Financing dynamics | ||||||||||||||||||||||
63 | P5.docx | I think venture capital is the engine that drives this movement. Yeah, we saw in 2017 experimental methods of creating capital that were wildly outside the bounds of US securities loss. We again saw the same thing happen in 2020 with NFTs. Although the movement towards security smelling things was a little slower, a little less precise because we had non-technical folks at the helm of those choices. Overall, I think money does not have an opinion. It is the deployment of capital that makes it opinionated. And in some instances, it is marvelous and powerful and helpful. In some instances, it carries a very aggressive agenda that is potentially damaging. So in my own practice, we are a venture capital backed startup. We have a wonderful relationship with our investors. I really like them. I respect them. We have a great diversity of investors on our cap table as well, that help us reflect the diversity of perspectives we hope to serve, as we do in our team makeup. That said, the fact that venture capital money is backing some projects that I find to not only be problematic, but actively harmful to this ecosystem, that's where the edge of the sword is. So in the same way that we can use venture capital funding to develop usability for the Global South, venture capital funding is also supporting projects like Worldcoin that install physical hardware kiosks in the Global South, do not involve consent and capture biometric information from the local people there to define a training set for these devices. So the techno imperialism of crypto as enabled by venture capital is the worst case scenario in my eyes. But the best case scenario is that we have techno accessibility enabled by venture capital. But either way money has to come from somewhere. So limited by securities laws as they are and the challenges of negotiating funding at a community scale, venture capital seems to be one of the better solutions that we have though the externalities are broad. | Challenge | Financing dynamics | ||||||||||||||||||||||
64 | P8.docx | I think we've seen a lot of capital coming in pretty quickly. So some of the... It's slowing down now, but for at least last six months leading to March or so there was so much being deployed into this sector at very rapid clips. And the reason is because there is so much money made. I mean, it was probably be best performing asset of our lifetimes. If you think about just crypto more generally, but even sort of blockchain based companies for the last two or three years. And so that created a lot of wealth and that wealth was often funneled back into the ecosystem. And so you had a lot of new non-traditional investors who had a lot of capital and could deploy very quickly on just ideas because there was the whole spaces pretty early. So I'd say the fundamentals stay the same, but the technology and the way that people interact with it are so different that it's caused this shift in the investment landscape. | Challenge | Financing dynamics | ||||||||||||||||||||||
65 | P18.docx | A lot of these early founders.. in a system that actually was built to be largely democratic and be able to evolve with the economic system. Those people not wanting to, again, just sacrifice that control. And I don't think they even verbalizing, I don't think it's intentionally malicious, but it's like something that's kind of innately human to everybody. And then when you pair that with the fact that just like the way our systems work, they favor white straight heterosexual guys, that doesn't go away in Web3, just because of social relationships. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
66 | P8.docx | I think, general business dynamics are the same. You still have to earn money. You still have to sort of grow. That path to growth is still the same. You still have to raise capital in order to sustain that growth. So, generally, I mean, it's just like investing in anything else. I think what's different is, it's a very new technology and it's sort of being created as we speak. And so there's not as much embedded knowledge nor are there as many experts or partners that you can go to, to actually understand these companies. Oftentimes the thought leaders in this space are much younger, are very much untraditional. So it's very different types of networks you need to understand and get up to speed. | Challenge | Financing dynamics, Balancing organizational needs and participation | ||||||||||||||||||||||
67 | P29.docx | I truly think that crypto is here to stay, and in what shape and form that actually is I think that's being written right now. And yeah, for us, we just feel pretty mission-driven to have it come from an engineering, innovative background to help form that conversation and not from a financial engineering perspective, which so far has been dominating it. So that's my only takeaway. | Challenge | Speculation | ||||||||||||||||||||||
68 | P24.docx | I was in business development and because it wasn’t a pretty huge startup, we only had [a few] people and I would say most of them were engineers so we had the founders that were all engineers and then we had extra engineers. And then not a lot of people in sales. It was just my manager and myself and we had those multiple hats in that sense, thinking about how we were going to market the product, how we were going to sell the product and determining what our main client bases were and how we would get in front of said client bases. My main client segment was talking to traders at crypto hedge funds but because there was so much work to do through scaling in a product, I had to think about it from our marketing perspective and also thinking about some of the VC side as well, how we would get more funding? And I thought that would be something I would be a little bit more involved in and personally wish that was something I was more involved in as with the founders being engineers and they were excellent engineers. I don't really feel like they were that great at selling the product. And I think that ultimately did negatively impact the startup because I personally believe that you bring in sales people to help you with the areas that you yourself might not be good at. And that's the whole concept of us being in sales. We're here to help you with the pitch. We're here to help you refine it. We're here to help you sell the product, whether it be the end client, but also to VCs. I believe my manager for the later days of when I was at the company did have to, finally stepped in and help them refine some of the pitches because what I saw was a bit rough. And that was really challenging, especially in the wake of crypto winter, where there's so many crypto head funds that were going belly up and becoming defunct. It was networking with people within that space to put me in the right direction of people I can reach out to. whether that be a hedge fund or a hedge fund with a VC arm or VC with a trading arm, going through that with a fine tooth comb and figuring out is this actually worth reaching out to? How do I get in front of these people? | Challenge | Financing dynamics | ||||||||||||||||||||||
69 | P11.docx | I'm pretty comfortable applying a negative filter at the front end of my investment process where, when I feel like somebody is doing this purely for greed, or if they're building a business based on again, like a Klima style, Ponzi economics or aren't thinking about like system level change, I'll just pass. I'll pass on anonymous and pseudonymous founders. I'll pass on really complicated tokenomic models that I don't understand. | Challenge | Financing dynamics | ||||||||||||||||||||||
70 | P24.docx | I would say I'm with that one major crypto hedge fund becoming the firms and the founders were nowhere to be found. That definitely was a major event, especially with my client base being crypto hedge funds. It's like, "Oh goodness. This was further de-legitimizing the space that we're working to legitimize." Even though that doesn't affect me in my direct capacity, I'm not trying to legitimize the space. I'm just trying to position a product to the client base that I think would be the one moving the needle the most. I think that was a big major event. And then of course, all of the major tokens, pretty much having a major downturn in that sense and we noticed a lot of VCs were pulling out. They didn't have the same appetite to invest as they previously did, which makes sense. If the money's not there, the money's not there. And then why would you put your money into a hyper volatile or hyper speculative space when the waters are choppy? | Challenge | Financing dynamics | ||||||||||||||||||||||
71 | P24.docx | I would say in my experience, at least from the company that I worked with all three founders or engineers and other startups that I know as well, a lot of them are engineer founded because you need a really good engineer that understands blockchain engineering in order to create a product that's viable in the first place. And that's great if you can create a product, but that doesn't necessarily mean that you can market and sell a product, but there's a certain level of ownership that an engineer will place over that product. And this wasn't in my personal experience with this company, but last summer, some friends were trying to get me on a similar cryptocurrency start that they were thinking about. It was going to be a bridge. And it was an engineer from [a well known exchange]. And another guy who was going to be working on the fundraising side in the sense that he had previously had startups, but he was not an engineer. But it became a very contentious thing about how much power the engineers wanted to take over the ownership of the product. Because at the end of the day, they're the ones that know how it's built and they're the ones who know how it's run. They think it's more... They view themselves as more integral or more important than the other people and become a huge power structure. And to quote this [exchange] engineer, he pretty much would call non-engineering jobs, "nothing jobs," and it was very abrasive and not fun to be around. | Challenge | Financing dynamics, Balancing organizational needs and participation | ||||||||||||||||||||||
72 | P9.docx | I would say it's not so much the money, I mean, the money's going to come. It's the mass use, right? The more people, sometimes when you're in a niche you can't see outside your little group and you can't really figure out how to apply your technology. But when everybody in the world starts looking at it and understanding it, then all of a sudden, you know the top people in the top fields that are not using blockchain right now. When they start seeing oh, this is just technology. Forget the hype. Let us understand this technology that's here. How can we use NFTs that hold data, right? How can we use these decentralized ledgers to our benefit? Maybe then they're going to come up with a real utility for both of these technologies. That's what I mean. And of course money is going to come because they're going to put money into the research and the development. But first it's the brain talent. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
73 | P17.docx | I would say that there are risks. How would I put it? Okay, I'll use a metaphor or an example. I would say that Netflix offered to sell. This was like, what? Early 2000s, late '90s, something like that. Netflix, whenever Netflix started. They offered at the beginning to sell to Blockbuster for I don't know how much it was, let's say a million dollars. And Blockbuster's just... And this was when Netflix was just mailing DVDs directly to people. They didn't have streaming services yet. And they just said, "No, you're not worth it." And obviously we know where Blockbuster is now and where Netflix is now. And so I would say there's risks with moving too fast, absolutely. And there are risks at moving too slow, like an example of Blockbuster. They were too slow to getting to where the market was going. And so when I say that they move fast, I don't mean they're negligent because there's auditing, there's lots of risk mitigation practices that are in place. Obviously they're practiced in different levels of thoroughness. Some people get like triple audited, all their code and some people go, "It's not been audited, but you know we tell you that upfront." So people, they're taking different approaches, but ultimately I would say yes, of course there are risks with moving fast and yes, of course there are risks with moving slow. And it's kind of like, I know it's probably not like a satisfactory answer, but I think it's the true answer. And the honest answer, which it's all contextual and frankly people don't know until maybe, maybe afterwards in hindsight is 20/20. So, I think most people move as fast as they can in order to keep up with the changing landscape of technology. But slow enough in order to make sure that they're mitigating risk is and a potential for failure as much as possible. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
74 | P24.docx | I would've stayed because it was the happiest job I think I ever had because them allowing me to voice my opinions and work on so many different things that I never would've had access to in a traditional finance sales job. And I got to grow and learn so many different skill sets, but unfortunately what ended up happening was they did not raise their seed round. We were pre-seed, they didn't raise a seed. And I had some red flags. I noticed some red flag as I was working there and I was asking my manager like, "Hey, is this something for me to be concerned about?" And I figured he would be relatively honest with me, but I understand that from a manager's perspective, why he was saying I shouldn't worry because you don't want to give your only direct report a reason to not feel confident in the company, because let's say for example, I took that information negatively and then my output went down because I lost faith in the goal. But at the same time, the writing was on the wall. I felt like money is running out. I noticed that we were cutting back costs in different areas. They were being very unclear and certain things they were saying, were like, "Too expensive." But then where they drew that line was also a little bit strange and off. I just feel like, again, not to say that engineers do not make good business leaders or good managers, I don't think that's the case at all. But I think because we had three engineers, they were really preoccupied with just the engineering aspect for the overall ethos, but not really focusing on some of the critical things that you need to keep a company operational because defining budgets and raising more money in a timely manner. | Challenge | Financing dynamics, Balancing organizational needs and participation | ||||||||||||||||||||||
75 | P11.docx | I'll be really candid because I imagine it's useful for you guys to get those data points. I swing probably every other week or every other month between thinking Web3 as a set of technologies is incredibly impactful and useful and thinking that it's not, that it's a really complicated live action role playing game without much utility, except for raising money from retail investors and from venture investors. | Challenge | Speculation, Financing dynamics | ||||||||||||||||||||||
76 | P11.docx | I'm a grudging capitalist. I think at my core, I actually am very upset with a lot of the features of capitalism despite being a venture capitalist. So I'm probably happier in a different political environment if I could choose. | Challenge | Financing dynamics | ||||||||||||||||||||||
77 | P29.docx | I'm a very operationally-minded brain. I mean if you create any sort of marketing inbound funnel, you know 99% of your impressions are just pure froth and don't matter, then that 1% is what's actually viable, 1% of those people are your customers who actually pay money. 1% of those people are the ones that stick around and pay a lot of money and really let the business grow and they're sticky customers. So it's we're looking at a situation where, or at least from my perspective, I'm already used to designing funnels and running businesses. If the product's valuable enough, then pays for itself. But if I converted 10% of impressions into sales, oh my god, that's kind of insane. So I think of it the same way as or I think of using the same analogy for crypto. It's pretty frothy at the top of the funnel, but as long as you're pretty disciplined about what the community member journey and the user journey is through this experience that you want to lay out to people of moving people from you're a stranger but excited about us to, you're now a core contributor and respected and trusted and thoughtfully in the community. What does that path forward looks like? I definitely expect the conversion numbers at each step of the funnel to be not pretty, but putting the whole fund together. I mean that's the entrepreneurial challenges. How can I extract this funnel that's ROI positive? | Challenge | Speculation, Expansion to mainstream markets | ||||||||||||||||||||||
78 | P1.docx | I'm going to say I'm in two Telegrams in London that are kind of a mess. They are for DeFi. Because I'm listed there as investing occasionally, I get a lot of people contacting me through that and it's really interesting that the communities that I'm in, in Web3, I'm thinking particularly of two Discords I'm in, there, there's a very strong ethos of bootstrapping, trying things out. There's a lot of nervousness around venture, nervousness around strings attached, whereas I'm seeing with a lot of the recent Web2 converts coming into Web3, I'm thinking of one person who texted me yesterday, where he has a pitch deck, hasn't built anything yet and didn't understand why..., Even in this market the VCs are like, well, you don't have any community surrounding this work, there's no appetite for what you're building therefore what are you funding right now? | Challenge | Financing dynamics | ||||||||||||||||||||||
79 | P9.docx | I'm honestly, I'm still not sure, again, like I said before, about this decentralization approach because I think it just doesn't match humanity, the way we work. The way we operate, the way we've organized over the centuries, you know? Because we always create plans, we always have leaders, we always ... Some people like to lead, some people like to follow. This whole idea that everyone leads is just, no decisions get made. [One of my clients] wanted to do their new release and they couldn't because they were stuck because the stakeholders couldn't agree on where to go. That's why you constantly have forks in these sort of situations, because they can't agree. That's what happens when you don't have leadership.You have a company, you don't agree with the leader, you leave. Or you sell their stock. But there is a leader, and they have a vision, and that's what's happening. If you don't have a clear vision and you don't have clear leadership you can't make decisions in a timely basis, that company will never succeed, right? So how would something decentralized really work? And again, it's not really decentralized. There's still a foundation, there's still a leader of that foundation. So they're making certain decisions. Even if the voting rights or governing rights were given out with the participation, they're always limited. You can't decide everything. Some things are still going to be decided for you, for the benefit of the network. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
80 | P21.docx | I'm not so into my peers and stakeholders head but I think some of them think that crypto could be something that could burst really heavily. And two points of what you mentioned, first, if we go very strong into selling, that we are a company, a new man that sells crypto and that crypto is going to be super powerful and whatever. And let's say, this is a bubble and bursts. How do you say, the non-positive effects of what we did are going to be huge affecting the traditional business. So that's why I mentioned that banks are a good business. So, why mess with something that really works? That's one part of the story and the other it's not so simple to get into the crypto business. It's not like hiring two engineers and hiring a junior to understand what's going on. It's a whole different vertical and it should be managed that way. It's not like, okay, let's hire two guys and let's see where this takes us. If you're going to do it, do it right. So, that costs money and investment. It's like building a whole different business, a whole different bank. It's like having retail banking and business banking. You have to have the crypto team and the crypto vertical. So, you have to have a big muscle to do that. That's why huge firms, powerful firms such as FTX, Coinbase, Binance, Pantera, blah, blah, blah, are pouring a lot of money into financial institutions, FinTech institutions, DeFi institutions because it requires good powerful teams to really understand and get a grasp of this is of where this is going. And for user acquisition, you need to spend a lot of money convincing somebody that you should get your dollars into whatever. So, that's why investment rose a lot for this projects because it has to be that way. It's not going to be an easy transition from the way things have been done for the past. I don't know. The first bank was in Italy, in the 17th century, something like that. It's a lot of years. | Challenge | Financing dynamics | ||||||||||||||||||||||
81 | P27.docx | Interviewee: I'm not sure I have any specific quote, but generally, I've been introduced to people in the VC space. Just people find them credible and they respect them, and when they introduce you to them, they explain what it is about this person that they found special. And when I get those introductions, I do take notice. So that does happen. I think a lot of it comes ultimately through the people you meet in the space, right? So a lot of the best interactions I've ever had were introductions or warm introductions by other people that I value. So inherently, I gravitate towards a value system and I think most people ultimately gravitate towards some value system. And when I find venture capital that shares those values, or at least has tenants of those values that overlap, then I'm much more interested in working with those people. Interviewer: What are those values? What are the values that sort of ideally must overlap? Interviewee: I don't think I ever codified it, but passing the beer test, number one, I want to be able to just have a connection with the person, right? So for me to be able to be an effective businessman and work with someone, I have to spend time in their company, right? We may be different, we don't have to agree on things, but I have to want to be around you. If I don't want to be around you, it's a problem. So I think that's one big one. Being able to connect, which I like to term as the beer test or something like that, I think. But from a value perspective, just creating infrastructure or just being part of something that will last longer than you and I, right? Just being part of advancing technology, being very empathetic to the users of said technology, right? Understanding why people even want to do any of this stuff. I feel like that's something really important for anyone that wants to spend significant time and money here. It's hard to find those people, and it doesn't happen in one conversation. It's really you hear things that you just perk up and you're like, "Oh, I agree with this." They're thinking about this in the right way. And I guess in effect, that can lead to an echo chamber. So you do want to be careful, but you'll find these connections and you'll find these common themes and conversations that you agree with, right? Which may be from different angles or something, but generally you're in the same page. | Challenge | Financing dynamics | ||||||||||||||||||||||
82 | P1.docx | I'm very interested in DAOs. And I think the term DAO doesn't really work in the way that it did a year ago, DAOs are a collective of people coming together around a particular goal..., So yes, exactly I think that's their website. For example, a DAO could be in Gitcoin's case, a DAO came together to fundraise and distribute money around public goods. A DAO could be organized around a game like Crypto Coven where people get together to talk about how much they enjoy the game. I don't think DAOs..., They're not institutions. These are the kind of things that can flourish for six months and they fade away, but at the same time there is no leader. You have stewards, you have a group of people that together represents certain pockets of the community and decide what to do, and that's great but at the same time, even in a DAO structure you need clarity around payment. You need clarity around who owns what? And so two companies that I funded recently are in the DAO tooling space. [One] is looking at fractional payments and fractional benefits. The idea being that if you want to be collectivists, then you have to reward people for their time and you have to honor them and the time they put in. | Challenge | Participatory governance, Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
83 | P1.docx | I've always been really interested in community directed models simply because, A, it's my professional background and I know how to build them, and B, I've always had a hypothesis that if we have broader stakeholders, we get better outcomes for society, in the same way that I think if you have five investors, for example, a board that I'm on that should remain nameless. A board that I'm on, I'm the only woman in the group, I'm the youngest person on the board by over 10 years and I'm the only non investor. Now, I'm glad that I'm in that group now, but the fact that I am the youngest and I'm in my forties, it makes me wonder there are vast pockets of society that we are not considering in these conversations, and so when I say community directive models, I love companies that think about collective ownership. I love companies that listen more carefully to their customer | Challenge | Participatory governance, Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
84 | P1.docx | In Web3 you very often have this dual structure where there's a nonprofit protocol that maintains the technology and a for-profit foundation, confusing despite the name, which works to steward the ecosystem, so very often gives out grants, talks about the work, forges relationships, builds partnerships | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
85 | P28.docx | Interviewer: Why then do you think people kept taking [Alameda’s] money? It sounds like there's a good process for word of mouth for positive investors, for example, people that positively influence the value of the platform, but it also sounds like there are these bad actors out there that lots of projects have continued to take money from. Why is that the case? Interviewee: Because it's just money. One, they're naïve. Some of these founders are just getting in for the start. They made a pitch deck and they're like, "We have the best product ever." They go out, they talk to a bunch of different funds, and Alameda ends up being the first one to tell them yes. They say, "Hey, we don't like your vesting structure. We actually only want to have 12 months of vesting, but we want you to keep the vesting the same for everyone else we bring on board. We're going to bring all of our friends." Because they're writing this huge check and all these guys are like, "Wow. They're giving us $500,000 or a million dollars," that's super impactful because it solves so many problems for these startups because they need cash and they need that cash for payroll, they need to get developers, they need to get marketing, they need business developers, they need all of these things, and money solves that. But what they don't foresee is the future problem when they have that community built, that everyone who has bought into your token at that top price when it got listed is now way undervalued because of those partners you brought in at that early stage who are now basically taking advantage of these community members who bought in after the fact. I don't know. This was a huge problem within the Solana community. It was just quite an interesting issue between the different startups, but I would say it's more from just being naïve and new to the space than anything else. | Challenge | Financing dynamics | ||||||||||||||||||||||
86 | P20.docx | It has a big impact and I want to highlight the use of the word "users" because if you're buying a token and you're holding it and you're hoping the price goes up so you can sell it, to me, you're not a user. And that speaks to probably 85 percent of the participants in crypto. They're not actually using the projects, they're not using the utility tokens for what they're meant for. They're just buying and selling them. And I think that that opens the door to some other conversations. I think it gives the SEC the right to come down hard on a lot of projects. If you list your project on the DEX or on the decentralized exchange, you're promising people that the price is going to go up, especially when you list or you're a partner. Here's some rewards for adding liquidity. All these different steps that you take which to the average Joe says, I think the price is going to go from five cents to 50 cents. That's a 10X. So I think defining users is one. And then if you try to focus on the specific, let's say 15 percent of the participants that are actual users, I then think you realize that all the marketing, all the promotion, all the spaces, and all the whatever it is you do on Twitter to get your project ahead, is actually money spent on the type of participants that you're not looking for. | Challenge | Speculation | ||||||||||||||||||||||
87 | P29.docx | It is a good point and it's extremely fair and it is annoying, but I just think a lot of people buy their crypto inside of these protocols that are 18 to 24 years old and this is their... They haven't built startups before and they've definitely have not been a part of the team like Uber. But if you think of Uber, maybe it's not a PC choice. Who's a good choice? If you think of Jeff Bezos starting a crypto protocol, is he going to be worried about this? I don't think he would. He'd be like, "Okay, this is the situation. People get excited about token prices. Cool, let's just set up our internal process so it's a bit more insular from these price actions so that we have solid business fundamentals that keep growing subtly and we can recruit from the people that are excited about us. And I don't know, it goes more towards the design of it in my opinion, but it is called the frontier so it could be friction full. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
88 | P4.docx | It takes longer to evolve, and you're right that the initial architecture is extremely important. Now, this is why my opinion is that founders want advisors on board, because when you set that architecture, you want people who have seen the playbook. You want people who have seen what has gone wrong in other protocols, and that's why that initial architecture is so important. Now, don't get me wrong. Things can change. People can vote in certain ways to change the architect... I mean, look at what Ethereum is trying to go through now with their E 2.0 and the merge. That has taken three, four years, and so it's a long, drawn-out process. You need to get everyone on board. You need to have everyone voting. If that was set from the beginning as proof of stake, Ethereum could have been advanced so much further. So, I think that's more reason as to why there should be advisors early on, and why the founders is incentivized to have advisors early on. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
89 | P18.docx | If you want me to be really candid is that, the protocol is built in a way where people vote on how the value is generated and the entities that it goes to. And then from that, there is a board. So one of those entities is the foundation that's there to represent the technology. From that there's the board. So there's a multisignature every month, they put the budgets out there, but there's a blocker in the system. And that's the finance department, which is one person who puts that budget forward to the board each month, right. And so at that point in time, even the board didn't have a vested interest, they had sort of dropped off and there was maybe three people left on the board. And so no one really cared. It was just kind of like this one person they'd be like, well I don't really know about hiring this person, or maybe we shouldn't do that. And we can drag our feet on putting funds where they're needed the most quickly, and that screws over the entire system. And we're not properly reporting on it. And it becomes an inefficiency very quickly. And so that is one of those classic issues that we have in the real corporate structures. Like things became very much similar to a regular corporate structure, but just running on the blockchain. And yeah, it goes back to the fact that those things can always be corporatified. | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
90 | P9.docx | It's a big technology. Things like this, they take so much time to move. So it's been on the fringe for a long time, but once it becomes mainstream and really big money starts pouring in, maybe that's when we figure out what to really use it for. Maybe intangible assets like IP rights. Maybe that. I don't know. Is that better, though, on a decentralized distributed ledger? I don't know. | Challenge | Expansion to mainstream markets | ||||||||||||||||||||||
91 | P25.docx | I love my privacy. I love working under a pseudonym. I love keeping my money in DeFi and in crypto in general. Love keeping my money off of exchanges, everything. I don't use any exchanges. Everything I do is kept in crypto. I don't pay for almost anything in real dollar anymore. I think the last time I spent a dollar was probably three, four months ago. And then it's a once in a blue moon type of thing when I whip out a credit card or something. And I love this anonymization, I do. But at the same time, like I said, the media views it as this niche market with risk and everything like that. It becomes a lot more risk when you're anonymous. You can't be really protected like how we were talking about the insurances is walking into things like that. How do you ensure someone you don't know? That's how insurance fraud happens. | Challenge | Financing dynamics | ||||||||||||||||||||||
92 | P15.docx | So in the beginning, when crypto was evolving, a lot of the participants in the ecosystem were subsidizing ideas and concepts. So there was always venture capital there, but it was more angel money. So the magnitude of investment was a lot smaller. It was a lot more bootstrapped if you will. So there was a lot more commitment to the original cause behind it and the support of it, because there was a lack of tools. How do we build those tools? What venture capital brought into it is an extreme amount of capital injection into ideas, concepts, and startups. Which meant that there was a lot more liquidity around, which meant also that people and talent was being acquired into the ecosystem that weren't necessarily ideologically aligned with what blockchain and crypto provides. They had no interest. They were just doing it as mercenaries. So they were extremely selfish about it. And ultimately they might not have known what it takes, but more importantly, there was just so much more money coming into the market that then there was so much envy around that ecosystem. That if you weren't that one that was chosen to participate in that $100,000,000 injected into this one company, and you weren't employed at and engaged by that one company, "Oh fuck. There's another one that just launched over there. I'm going to eight bit onto that one." And so that FOMO brought that in. And I think every time an economic system, it expands and then it would consolidate. And every time it consolidates, it consolidates a bit further apart. I don't know if that makes sense, but. | Challenge | Financing dynamics, Speculation | ||||||||||||||||||||||
93 | P9.docx | It's not, these concepts aren't pure, anyway. Because they're impossible. These are utopian concepts. Something's going to run by itself. It's never going to run by itself. It's also limited by the technology that somebody built. Somebody built it with a certain purpose so it acts in a certain way, right? That already limits it so it's not just running by itself. Somebody is guiding it with the technology, right? | Challenge | Balancing organizational needs with stakeholder participation | ||||||||||||||||||||||
94 | P16.docx | Like I said, the question that VCs ask is you can just tell. It's almost like the more suspicious they are of you the more excited I am about them, because that means they're actually doing due diligence on what they're investing in, which implies that they have certain standards, which means they probably have a certain value add. There's a higher percentage chance that they're going to have value add to the project. | Challenge | Financing dynamics | ||||||||||||||||||||||
95 | P20.docx | Like if you go to Uniswap right now, Uniswap’s probably got, I don't know, 35,000 pairs. And a ton of these pairs have liquidity that is basically been put there by individuals that have been promised that you're going to get rewards. And it's not sustainable. Eventually, your rewards are going to dry up and once the rewards dry up, no one's going to add liquidity again. Mercenary capital, it's only there to be rewarded. And when there isn't any reward, it goes away. And all the prices fall back down to zero. So I think the mercenary capital issue, it's inherent within the apps, so within protocols like ours because we need that type of liquidity for lending and borrowing. But it's also inherent within the trading of our token, any platform's token. Again, because it's only there to collect the rewards and then it goes away. And I think a lot of projects don't expose themself to the naked truth, the naked market, to truly see do people actually want my token? Do they want to buy my token or are they merely purchasing it because they know there's going to be so many transactions, a lot of fluctuation in the price which then allows them to gamify trading. Pull out the charts and draw some lines, oh I think it's going to go up. I think I see this pattern. That has nothing to do with whether my particular project has users that want to borrow or lend. It just has to do with people buying my token and hoping that there's enough fluctuation that they can make money. | Challenge | Speculation | ||||||||||||||||||||||
96 | P29.docx | My co-founder and I are pretty darn aligned about this idea. We think that crypto isn't... So both of us have made, I mean I had three or four startups. This is his 15th. He was one of the first people to buy a Bitcoin. He's like that kind of person. So he's been around for a while and both of us agreed on a couple things, which is one, crypto is an industry that if you build something it can scale without friction very, very beautifully. But it can be pretty tricky to get right. So that's immediately a good signal for VC capital. It's like that's the point of VC capital is so that you can buy up the market, monopolize some sort of vertical segment and create brand-new value for people in a way that returns more value over time versus competing for value, and then you actually just go to cashflow even over time. You think of a restaurant versus Apple is the picture I'm trying to create. So that's what VC capital is made for is to get to that level quicker than anybody else. Crypto is made or crypto just seems to scale extremely well, so it's very appealing. Then third, it's a personal decision for us is we just think it would be... We enjoyed this type of ride more of, okay, raise a chunk of capital, hire a good crew, a SWAT team, build something up insanely quickly, robustly, get out there, raise more capital, have the whole hyper growth thing. I think just our personalities are more suited to it versus running something anonymously and kind of launching it and bootstrapping it. | Challenge | Financing dynamics | ||||||||||||||||||||||
97 | P27.docx | To answer your question, there are many ways we actually have a lot of science behind supporting this way of going to market that I'll be happy to share with you. We did some agent based modeling as well and on chain like data sleuthing, so it's available on IPFS for anyone to see. I'll share that with you right after. It's two deep dives on projects that in 2022 went through essentially what it was effectively a fair launch. Well, we have three, two of them provide a ton of data. The third one is very, very new, so we're still digging it, but one was in February of 2022, which was right before the huge crash happened, so early Bear. One was in July with a small resurgence in D5, but it was like October. And the last one was just at the end of November, early December, a couple of weeks ago. The one in February raised 34 million. The one in July was 27 and the one in November, December was 3.8. But they also had a much smaller proportional share of their total token sale than the other two, plus just different projects, different types of projects. But they both all had a very similar common theme, which was no early pre-seed or private round sales. However, after the fact, they are still talking to VCs and they are still working with market makers in the space because while I think inherently VCs can be very extractionary, very extractional. But they also provide a lot of value to the space because they help finance a lot of people's ideas. Some work, some do not, most do not, but the ones that do really work. And I think ultimately that isn't that positive for the space. I don't want VCs to disappear. I just think that they've, for a bit of time now, especially with the internet age and popularity of Y Combinator and Y Combinator style platforms and things like that, I think right now VCs have been granted this ridiculous disproportionate amount of ability to wield influence and they obviously have a lot of capital to back that influence so I understand why, but I would like to see a little bit more parity between enterprise and retail in terms of opportunity, not necessarily capital. I understand that it'll be impossible for me to just wave a wand and make everything equal, which is not good anyway, but I want the opportunity to be there for people to be equal. | Challenge | Financing dynamics | ||||||||||||||||||||||
98 | P29.docx | Oh, I think so one price goes up and people have invested tokens. I think the VCs have a very strong incentive to keep holding versus a hedge fund. And there I can point fingers too, a lot of different protocols that had Three Arrows Capital as their primary VC, but Three AC was a hedge fund, not really a venture capitalist. And you can see that 3AC can do some things to get positive price action in the token and then all of a sudden their wallet empties of the token allocation and it's like they just dumped on everybody and then the price goes down and doesn't recover. There were a lot of examples for that where they were basically day-trading their "VC investments" and that's because their financial entity was set up to allow for that. Their vehicle was set up to allow for that. However, VCs, they're really not allowed to, or at least I think technically they could, but it's extremely inconvenient and be very, very public and it'd be slow too. Where a 3AC type they can just make a decision in one day with one Telegram message, a place like Framework Ventures, there's a whole governance process to have them actually sell off any, not truant models, non-truant model tokens. | Challenge | Financing dynamics | ||||||||||||||||||||||
99 | P27.docx | Okay. Well, I don't. The way that I make that decision is by interacting with them and then making a judgment call based on, A, instinct. At the end of the day, you're talking to a human being. So if there's a really weird vibe, naturally can pick up on that stuff. And then after that I validate. So I trust what I validate, so I learned what their motivations are, what they're trying to do. A lot of VCs were also builders before they were VCs. So I don't want to discredit that. And I've invested in stuff too. So am I a VC? If you invested in something, are you a VC? It is hard to say. But generally the ones that are good are the ones that think critically that aren't just chasing money, they're interested in building cool stuff. And those are the people I think, you want to gravitate towards. And those are the people you want to work with financially. I wouldn't want to work with someone that's like Shark Tank style, that's just stupid. I don't want to work with those kind. | Challenge | Financing dynamics | ||||||||||||||||||||||
100 | P16.docx | Performance instead of decentralization, adaptability instead of immutability, transparency as a feature instead of transparency as a bug with needing privacy. And then I also think liquidity. Ah, it's interesting. It's like the experimentation, I think more and more it's like people are looking for a thumbs up from legacy finance for products and adoption, as opposed to people and the experimentalists of the world. And that's just technology, adoption curve stuff. But yeah, those initial three properties, specifically the immutability one that has been fascinating to watch slowly but surely become an outdated value. And I don't think that's a coincidence. | Challenge | Expansion to mainstream markets |