Crypto VC - Worth it?
Received an offer from a VC that does both crypto (eg. stuff you see on Coin Gecko) and companies that support the crypto space eg. Exchanges, Hardware Wallets.
Pros
- Fund strategy seems interesting compared to the dead-end role I am currently in.
- First offer I had after 3 years of job searching (not exaggerating).
Cons
- Involves a pay cut and as the fund size is small, pay gap between what I can make here vs my position will only increase over time.
- No track record. Fund launched last year and so far investments listed on their website look kinda meh.
So. WSO foundation of wisdom - is moving over a good idea?
Thanks!
Imo, crypto VCs are amazing if you want that entrepreneur atmosphere, crypto VCs like Pantera are thriving right now and making huge sums because almost everyone is into crypto right now, mostly youngsters and they are the future. If i were you i would start immediately, the pay cut is almost everywhere if you are starting out in VCs but the money after that is amazing, if you are smart enough, people in VCs make billions from 1-2 successful investments. Also, the fact that it has started just now is not that bad, if you join now and the VC is successful, you will be a big deal and be respected when the VC is big. People who joined a company which was run by a douchey teenager, who just started from college with few thousand bucks, are billionaires today and yeah its called facebook. So, you get the gist.Hope this helps.
This isn’t correct. The money in VC isn’t amazing - compared to the rest of the buy side, because the traditional model isn’t scalable. Cash comp is thoroughly average and carry is everything.
If you’re the GP of a buyout fund you can keep raising larger and larger funds and taking your 2/20. In traditional venture, you can’t deploy that capital even if you could raise it from LPs and most funds returns suffer massively if they try to scale without changing their strategy.
People in VC make billions from 1-2 investments in the same way that some people who play the lottery win 10s of millions. There are very very few billionaire VCs - particularly vs HF and PE.
Hey dude - you seem like someone with experience in VC. If I go into a Crypto focused fund, will branching out to other areas of VCs be possible? In other words, what are the exit opps.
Thanks.
wouldnt say there area very very few billionaires in VCs. The founders of all the top top tier VC (maybe not even founders all the time) are billionaires. Look at how many billionaires sequioa has made compared to a top pe or hedge fund where its mostly only the founders. Moral of the story is the top people do fine everywhere and do what you enjoy/ are good at.
I would kill to work for a crypto VC. Decentralized finance (DeFi) has gone from $1B locked up in TVL in 2019 to $10B in 2020 to $80B in 2021. DAU growth and transaction volumes for networks like ETH and MATIC are similarly mind blowing. This is the rocket ship and you’re early. Whether or not your passionate about it or really want to do it comes down to you.
Exactly, i am just a student rn and i have 4-5 crypto VC websites open in my safari and this guy is asking if its wise to join. I mean I wouldn't get bored working for crypto VCs in 5-10 years.
Don't ask on this website. You're better off doing your own research. WSO is filled with people who are risk averse and went to IB to PE, IB to HF, etc. What you're asking is about charting your career against an unknown entity. It takes courage to do that (which you won't generally find with risk averse IB to PE hoppers). If you spend the rest of your academic years developing conviction around a career in DeFi / Crypto / OpenFi etc., then run at it. Don't let anybody tell you otherwise.
The money will come just fine if you make yourself useful in a growing marketing.
Pure Crypto VCs vary WILDLY in terms of quality. The top funds like Coinbase ventures, Pantera, Fenbushi and Polychain have some razor sharp people working for them and have made some exceptional bets (although crypto as a vertical has seen a fairly low number of proper exits). We’re coinvested with serious player and I’m continually impressed by their depth of knowledge and expertise.
That said - I’ve met a lot of small crypto VCs populated with fuckwitted morons who have no conception of what it means to be a VC. They’ve raised a micro fund on the back of hype in the vertical, and are spraying small cheques around like a fucking firehose into nonsense vapourware.
A few things to consider: 1) what are the founders backgrounds? Do they have both serious operational experience and brand name investment experience?, What are current/former portfolio cos?, 2) How big is the fund? Can 2% management fees keep you all fed and clothed in Patagonia vests? 3) does the thesis really make sense? Ask multiple people in your network with deep operational crypto experience.
Well I guess. If you can buy stuff off Binance/Gemini/Coinbase, why the need to join a VC to do it? Maybe not for investments in the hardware wallet companies that the OP mentioned. Want to invest in exchanges? Well you have SushiSwap, UniSwap etc.
But it seems like you can run your own mini VC without joining a crypto VC.
VCs are not known for paying well so that's definitely something to be aware of. Unless joining VC allows you to get in at a discount? But then again it's not as if you as an employee benefit directly from it, rather it's the fund that profits off this.
Do you believe in Crypto? I mean that's the big thing about moving over to a crypto focused fund. For what it's worth, A16z, just raised a large crypto fund and I think most smart investors would agree that crypto currencies will have some place in modern financial infrastructure in the future. I think it's unlikely bitcoin becomes the reserver currency, but a 2.0/3.0 iteration that will eventually gain traction and there are a wide range of applications for the blockchain.
If you have enough crypto knowledge to work at a fund, I'd say it's worth the leap while you're young. It's unlikely that knowledge becomes useless and if Cryptos become the next internet, you'd be well positioned to take advantage of that.
Thanks. Yes, I do believe in crypto. But I think believing in it and getting rich off it are two separate things. If money were not an issue, I would run over without any hesitation. Unfortunately, the pay cut is quite substantial.
Appreciate you providing feedback on the potential upside :)
Curious how’d you land an interview with this fund? Through head hunter or did you reach out yourself?
Looking for crypto VC funds myself too
Found it on Linkedin.
Curious, where is this one based? I’m looking at a few options too
Can't be too specific. but it's in CA.
Feel free to PM me, currently in a crypto investing role
Dude I can't PM you, you are annoymous.
I have worked for a major cryptocurrency firm, and I have seen engineers and product managers build DeFi platforms and all the buzz.
IMO, don't do it. It's a giant bubble. A lot of so-called projects behind new tokens are void or a scam.
Unless you are super into crypto itself and the fund is solid as hell, don't go.
Thanks. yes, leaning towards not going.
Know and have worked with many crypto companies out there and have a couple comments:
1. cryptos that you see on coin market cap, other than perhaps Bitcoin, have 0 intrinsic value. They don’t represent ownership in anything and if anything are literally gift cards to use to spend on credits for a network.
2. No assets in the history of the world have become valuable and stayed valuable (other than perhaps gold, but actually has legitimate usage) while having zero intrinsic value.
3. Most companies (going to say 95% of them), are pure dogshit vaporware in this space. They never got fully flushed out post 2017 and honestly the space needs a 10 year dark period to let the actually innovative companies rise up.
4. most crypto “vcs” I’ve seen have yet to actually make any money at all. Certain startups they have made great returns on paper on, but once the public sees their financials and valuations, it’ll be a bloodbath for them
unless this offer is at a top 5 fund then you should probably decline it because they’re looking at one in 1 million opportunities to pan out
Hey thanks. Yes agreed, it's a shot in the dark. Not a well known fund. But do you think this VC role can help me pivot to other VC / PE roles? Currently, I work at a dead end asset manager role so getting out is a struggle.
1 & 2 demonstrate that you don't understand cryptocurrency or the history of money. 3 & 4 are correct. Would recommend the book Money by Felix Martin
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