I recently re-read three fantastic (and imo canonical) older crypto posts that shaped a lot of how people think about value capture in crypto (Fat Protocols, Thin Applications, and Crypto Tokens and the Coming Age of Protocol Innovation). via Power Laws & Normal Distribution in Crypto The original fat protocol thesis is well understood in terms of L1 value accrual, but it also meant that you...
I believe one of the most damaging pieces of advice to proliferate in the tech world over the past few years has been “being early is indistinguishable from being wrong”. There are many reasons why this is true in theory but as I’ve talked about for years, at this stage of technology development and penetration, whether you’re a technologist or capital allocator, if you’re not too early, you’re...
When an area becomes consensus but is still somewhat novel or hard to parse for investors, they often try to distill companies into very clear-cut and easily “findable” metrics in order to make decisions. In many cases, this wave of chaos, rapid change, and complexity pushes investors to retreat into discussing a constant in startups; Founders. And as one searches for Founder-Company...
How technology markets and venture capital are heading towards a great bifurcation, an explosion of narrative driven value creation, and much more which will meaningfully change the job of technology investors across all asset classes.
If loops are the power source that accelerate the flywheel, inflection points build the spokes and physical properties of the flywheel, create the initial spin, and eventually are the stick which stops the wheel dead in its tracks.
Walking through the trickle down dynamics of how COVID-19 is impacting venture capital valuations
Disclaimer: I believe that unless you are one of a few firms, there is no possible claim that there is a “correct” way to do venture, only to treat people with respect along the way. Venture capital started as a network heavy business and arguably still is to many. I don’t think that is dominant anymore. The Early Days: VC was the ultimate network business Venture capital started as the ultimate...
Venture Capital functions with a power law where the majority of a fund’s returns come from a small percentage of investments. Because of this, VCs need to know if a single investment can return the entire fund. As Bill Gurley famously said “Venture capital is not even a home run business. It’s a grand slam business.” This is where the Return The Fund (RTF) analysis comes into play.
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