Bufficorn Ventures | Hosted By: Tina Dai

Transcript

So now we will prepare for the bit of the um stage because of the panel discussion is going to start. So stay tuned and it's a great opportunity to learn. I'll do the moderating.

Hi everyone, welcome to the investor sessions part of this uh ETHVC summit. Thanks to uh Kindo for kicking us off as well as our sponsors Pharaoh and Supernet. Uh I'm going to kick us off with a quick primer on uh the state of VC before we dive into the investor sessions. So hi everyone, I'm Tina. I'm part of Buffercorn Ventures. Uh, and Buffer Ventures is actually the investment arm of ETH Denver. I'm one of the investment stewards alongside John who is the founder. Um, for those of you who don't know, uh, we started Buffacorn Ventures because ETH Denver is one of the longestr running hackathons as well as one of the largest communities. and

we decided to come together with this uh small investment arm where we invest in early stage seed preede deals alongside other VCs. Um so we do follow on tracks up to 100,000. Uh and we back founders with the reach of our global community. Uh if you want to learn more about us uh you can check us out buffercorn.vententures. Um, and with that said, I'm going to start us us off with a quick primer on the state of VC. Um, and this should be good context for our next series of conversations.

So, in 2025, um, where we were in terms of uh, VC capital deployment, we deployed about 20 billion across 1,600 plus deals. Uh and this is actually one of the the better years of fundraising aside from the heights of 2022. This amount of capital deployed was double that of 2023. So we are seeing an uptick in the amount of capital deployed. However, if you dig a little bit deeper uh into the actual number of deals done, um you'll see that deal count in 2025 is actually trailing some of the prior years, which means that the amount of money raised per deal

has actually increased um by a significant number. And when you dive more into that, you can see that more money is actually flowing now into later stage companies uh than earlier stage companies. And this is true both by the amount of capital deployed per deal as well as the number of deals. Um and you'll see here in 2025 versus that of 2024, 2023, it's almost 60% of capital has gone into later stage deals, which is double even triple that of prior years.

And if we now dive in into capital deployed by um the actual category of what people are investing in, it seems like centralized exchanges and other exchanges are the perennial business model for crypto. Um and so that first large bar um it's really exchanges uh lending investing platforms trading and everything else is sort of um more or less the longtail of investments and just AC as a whole I know I'm going through this all super fast as a whole it seems financial utility right including um payments including banking

as a whole is getting a lot more momentum in 2025 while you see a decline in infrastructure as well as consumer categories. And another another interesting note uh for the state of VC in 2025 is we actually have a lot more M&A than we have in previous years. So you'll see that M&A count it has reached an all-time high and this is led by acquirers like Coinbase, Ripple, Kraken, Stripe etc. So with that said, that is the primer for the state of VC where we were in 2025 relative to all the other years. We have two upcoming panels. The first is going to be uh fundraising across a

capital stack. And this is going to be a crash course on what VC math looks like as well as what it might take to raise in 2026. And then the second panel after that, we are going to have a request for startup. So this is an unfiltered look at what VCs are now looking to fund today. So with that I am going to uh invite up our first set of panelists. Uh we have Richard Chen from Veric. Um please come to the stage Car Vogle from SixFan Ventures and B um Fati from Faction.

I actually need a mic. I need to turn this mic on, but then we'll get started. Oh, it is on.

Perfect. All right. Um, so we have about 25 minutes uh to decode the capital stack. So, I wanted to first start off with a quick calibration question. um would love to have you guys introduce your fund and give me um a sense of the sweet spot of the check size and stages that you guys played in. We can start with B. Okay, so ladies first. I love it. Hi. Uh is this on by the way? Okay, great. Uh B Fatier, I'm the co-founder of Lightseed Faction. We are an early stage uh blockchain focused fund. uh that is a joint venture with light speeded venture partners. Our fund

is uh about $285 million. Uh we are focused primarily on series seed and a uh sweet spot of checks is between5 to $8 million. Sometimes we'll go a little south of that, sometimes we'll go a little north of that. And we invest uh across the stack. So we'll invest in both equity and token to token projects. >> Hey everyone, I'm Richard. Uh I run a fund called Verarac. It's a $30 million fund. Um tech size 600 to 900k and uh investing preede seed uh kind of anything that touches crypto. So it can be cryptonnative projects like exchanges uh dexes lending protocols. It can be crypto adjacent like uh payment providers, stable coins, a little bit of

AI robotics. Um yeah. >> Hello everyone. My name is Carl. I'm a general partner at Sixman Ventures. We're an early stage venture fund that writes checks between 500k to $5 million in preede to series A companies. Our general thesis has been to focus on the application layer uh versus infrastructure. Um generally our our opinion has been uh for years we don't just need to create more block space. We need things that actually utilize the block space. Uh a couple we started that fund about 5 years ago. It was very contrarian at the time. Now we see more and more investors funding apps as well.

Um, and we're starting to see a great app explosion in the crypto ecosystem. >> Cool. So, I'm gonna uh ask you guys questions in sort of three sections. The first section is going to be about the VC business model. A lot of these questions, um, I'm directing towards Richard, but feel free to pitch in if you guys have other thoughts. So, we'll start with the VC business model. Um, so Richard, uh, I would love for you to explain what the VC business model is, right? Because when we talk about pitching, founders need to kind of understand what the VC business is. So how do you actually return a fund and what is the return that LPs are sort of expecting at the end of a fund life cycle?

>> Yeah. So I'd say the root cause of all this is uh the power law. Um so like in case you're not familiar with the power law, there's only a small handful of companies every year uh that produce most of the returns uh for that given year. So like if you look at an overall VC portfolio um say like 10 companies uh maybe five of them will lose money uh then like four of them will make 1x or like a couple x and like that one company will turn like 30x or more and like that one company makes or breaks their fund. Um and like this is why because of this uh VCs care about um TAM outcome size, how big can these companies grow because in the in the small probability that the the startup

is successful, it needs to get to the size where it can be a massive uh 30x outlier outcome. Um so I think this is uh where there's a big difference between uh VC backed startups and like small businesses. So like for most companies like they don't need to raise VC money. you can get to seven figures ARR uh bootstrap like by being like a good profitable business. But like when you take VC money, uh VCs are expecting you to grow to like 100 million plus ARR where you're now a candidate to IPO or have a huge multi-billion dollar exit.

Um so because of that, this is why VCs care a lot about TAM. How big can this company grow? uh that drives a lot of the returns the business model of venture because most of the returns are just uh concentrated in just a select handful of outlier companies. >> Thank you for that. So uh it I mean it it depends on the actual fund vintage but typically I think um top cortile is a four to 5x return on the fund um which informs a lot of the portfolio math right that you're looking at. So, um, you actually write a lot about portfolio math, Richard. Um, and you sometimes argue that, um, while many founders actually optimize for the highest valuation, this is a valuation trap. Um,

can you explain why um, too high of a valuation might lead a VC to potentially pass on a company? >> Yeah. So, like VCs are always like paying like up for valuations relative like to today's like revenue. So like say you get a term sheet for at uh say a 100 million valuation for like 1 million of ARR and like you know that's a 100x revenue multiple which is crazy but you know VCs are paying up that you're going to 10x your revenue in the next few years. So like all of a sudden that 100x multiple becomes a 10x revenue multiple.

Um the risk of raising too high of a valuation is if your growth rate slows and you don't grow from 1 to 10 million ARR uh then all of a sudden you're left with this huge valuation overhang. No VC will want to touch you for your next round. It basically kills uh your next round of fund raise. Uh so like I've seen this happen a lot with companies especially in 2122 when like it was a very easy time to fund raise. uh they got a lot of companies took these uh very high valuated term sheets was never able to grow into the revenue uh to justify these valuations. Now they're running out of cash. They need to go and fund raise. Yet no VC will touch them because now VCs have moved on. They're funding anthropic open AI, the next hot

companies. You're kind of left for dead. Uh so this is the risk of taking too high of a valuation that you don't think you can grow into next few years. >> Great. And so last question for you, Richard. Um for founders thinking about pricing, what's your heristic for how they should think about pricing? Um, I guess it really depends on like the market you're building in. Um, I guess what I'm seeing now, like preede is probably like sub 20 and then seed is like sub 30. Uh, and then series A is between like 50 to 100. Um, but it it's al obviously like very dependent on the market you're building and like what the comps are. Like uh, US valuations um, you know, Silicon Valley valuations are

going to be higher than like emerging markets for example. Um so it's very dependent. >> Thank you. So now I'm gonna move into this next section which is um graduating from preede to seed and a lot of these questions are going to be directed towards Carl. Um but again if you guys have other perspectives feel free to chime in. Um but preede and seed often just sounds like nomenclature. Um and so um the expectations though from a VC perspective can be vastly different. Uh can you help um founders think about how they differentiate between preede and seed and um maybe is preede simply just buying you know the team and the dream or um the seed stage requires more of

hard data like how do you think about the difference between a preede and seed company >> to be honest I don't think about it much and like we actually have an internal tracker and I list this as preede or seed and I'm like uh it's actually hard to tell like the the general heruristic I would use if there's one thing is do you have a product that you are offering to the market? If you are pre-product, you have nothing built or nothing that's ready to go live, then you're absolutely preede in my point of view. Um, seed companies usually have a product, they have customers, they have a pipeline that they're aiming to sell into, but usually they have not achieved product market fit. Some have, some haven't, but usually it's so early in the in the company's life cycle, it's hard to discern do they have real product market

fit. Um, so as an example, if you're a software company, you might sign 10 customers, be like, "Oh my gosh, I have product market fit." But then, you know, nine out of the 10 turn three months later once your contract is up. And so really what we're looking for is do you have a product in market that has a clear value proposition that customers in the market are willing to engage with or buy. And that all of a sudden means okay, this is actually a seed type company um versus something that's preeded. Um, but at this stage, I think it's really collapsing. I mean, I look at it now. If somebody comes to me and doesn't and has a deck but no prototype in the age where I just rebuilt our entire CRM in 3 days, like I'm like, why don't you have a prototype of this

product? It's almost like preede doesn't need to exist to the same extent it did before because the pace to prototype and build and test hypothesis has absolutely collapsed with the use of agent coding. >> So, that's actually a good um tailway into my next question, right? because it the fundraising data does show that um more and more capital is moving later stage and so curious what's your sense on the ground and also um has the bar fundamentally raised for a seed or a preede deal to get done?

>> I think absolutely I think that there's a big sobering that's going on uh on amongst like the venture capital industry. uh you know before it's like oh you have this new app that is you know something to earn of course it's going to be worth a billion dollars and I think over the past few years we've we've really come to senses that it's very hard to have a billion plus dollar outcome that sustains over a period of time such that as an investor you can actually exit that position when the time is right you know things tend to spike and then go down and so usually investors are locked up for a period of time as they should be um but as part of that it means we need sustained durable value creation And so it's very hard to build and launch that scales of hundreds of

millions or billions of dollars. So it's definitely moving. The other thing too is we've we've now have a lot more great builders that were funded and came into crypto 2020, 2021, 2022, and now they've continued to scale and so they need more capital. So it's just a function of, you know, investing in the market over time. There's now naturally more legitimate series A plus companies than there was previously. Just like last cycle, we had very few public crypto companies, but now you can point to 10 plus crypto uh companies that are public. So, it's just the industry maturing over time.

>> Yeah, that makes sense. Um, so what does it actually take now to graduate to a seed from a preede, right? Um, is there a specific threshold that you're looking for in terms of ARR or how do founders think about when they're seed ready? I would say there's no it it really depends on the category. So if you're doing software as a service or some software platform, that's a very different set of heristics than if you're building AI research models u more like a research lab in terms of where that cut off is. Um what I my biggest piece of encouragement would be raise capital when you actually either need the capital to scale your business and you know exactly how you're going to allocate it. um or and or or like you the market actually suggests now is the

time to raise capital. So this is something like interesting for the builders out there. Sometimes the market a certain segment gets really hot for 3 months. I mean Bitcoin L2s had its moment. Restaking had its moment. These are things that nobody talks about now but like there was periods where there was so much demand amongst investors not us but like other investors for these categories. And so when the market is telling you to raise, absolutely listen to that signal and get cash in the door. Don't go spend it frivously, but actually use the market volatility to your advantage as a founder to try to get a healthy valuation where you don't need to have a ton of dilution. Now, you don't want to over overra such as um some of the concerns that were discussed

before. It's going to be harder to bring on teammates, etc. But the worst possible thing is that you were in a market that was really hot. you didn't raise and then all of a sudden that market has cooled down and there's no investor appetite and you're running out of cash. And so really it's just about when do I need the cash? How am I going to allocate it properly? Go to the the market's going to tell you amongst VCs like is there a demand for this type of deal or not? And the other thing I'd say lastly to that is the market changes. And so there's tons of founders we talked to and it was either too early or we just didn't have enough conviction. 3 to 6 months later we end we end up uh investing. So maintain great relationships with venture. They we are

on your side truly. We all want to win together and scale crypto. So if it's not right at that one point, maintain a healthy relationship and then uh it might work out in the future. >> Um one more question for you. Um is there's a ton of firms now in crypto um like six ventures that are starting to look at frontier tech right broadly more um with like AI, robotics, etc. just wanted to um get your thoughts on how founders should think about that as a signal or um is is the attention diverting away from crypto or why are funds making that decision?

>> Yeah. And what I'll say is we look at the intersection. So if crypto is not foundational to a company then we are not world class enough to probably find the best deal. So let me give you an example. If somebody comes to Sixman Ventures and says, "I have a robotics idea." But as a firm, we've put out zero thought pieces on robotics. I've attended zero robotics conferences. Uh we're not actively in Telegram groups talking about robotics on a regular basis. Pure robotics. Like if I see a deal, it means that all the other people that have a right to win that deal first have passed. So we really try to stay focused on crypto or where crypto intersects different categories and try to be world class there because we know we have a good chance of seeing

worldclass deals. So if you see a firm that's chasing the next thing again robotics is hot right now. If you see a firm chasing robotics, chasing parts of AI, chasing other things, it's a really bad sign that that firm actually doesn't have a foundational thesis. So really look for people that have been writing, thinking, investing in a category for a period of time because they're also going to be smarter and more helpful to you as an investor. They're going to have more connections. Um they're going to have more insights, uh etc. Thank you. So B, we're going to move on to your section which is series A and beyond. Um I think the first question here is really we're entering a phase in crypto where there's more of a flight to fundamentals, right? Um and faction itself is is a part of um or a

partnership with light speeded ventures which is a very traditional web 2 fund. So when you look at crypto series A and beyond today um have you completely reverted to web 2 metrics or are you um still assigning some crypto premium outside of uh those hard like strict ARR multiples? Yeah, I think it candidly very much depends on the complexion of the business and the category. Um, I'll give you a few examples. Um, you know, we have invested in pieces of infrastructure that candidly uh have outside strategic value. They are an N of one company um or they are an N of2 company. Um, and we have never valued them even at a series C series D

purely on their sort of monetization metrics, right? it's always with an eye towards what's the eventual outcome and if that outcome is say a strategic acquisition that we think could be in the in the billions of dollars obviously we're less focused on things like ARR right so um that's just one example of when the ARR heristic kind of falls apart um I think where there is probably when you talk about a crypto premium historically um people have looked at comps in in the token market right and and we knew that there was a outside speculative bet that um usually kind of threw some of those comps out of whack. Um I think again that gap has probably closed because the

speculative bid these days has has disappeared. So I think we are razor focused on more sustainable protocol revenues. Um we always say you know by the time you you're at our door you know obviously we have the the benefit of this you know the preede and seed investors and what they have kind of seen but you have to be useful to someone. Um, and if you're not starting to kind of really show that you are, you know, providing some level of utility and that you're at sort of the beginnings of uh inflecting on some metric that matters to your business. Now, again, that could be ARR, it could be, hey, uh, you look at the TVL we've been able to to amount. It could be um, you know, like I said, this kind of strategic value that you can point to or

logos that are very difficult to maybe um, you know, uh, be able to get us customers. So um there's no cookie cutter answer but uh we are looking for for breakout companies right where we can you know at least point to a handful of metrics that show that there has been um progress made from previous rounds. >> Thank you. Um and obviously stable coins and rwas have really caught the attention of um all of crypto and web two fintech right. So I'm curious if you're seeing more web two founders entering this space and how do you think crypto founders compete with web two founders?

>> We have definitely I think the complexion of founders has changed. Uh you know I've been in crypto since 2016 and I think you know we started off with uh you know a lot of builders that were sort of philosophically aligned with what crypto had to offer. A lot of it was sort of French movement, French builders. Um that was sort of where the industry really started. Uh then we kind of moved into this and this is sort of the thanks to some of the things that were happening in the macro with we had a lot of um folks move into the space that were chasing at QuickBook candidly and they were looking for you know launching a token quickly and really sort of exiting from there. Uh those folks thankfully I think are are gone now. Um and very very candidly we've lost a lot of talent to AI. Uh, I think

again if you're a 20-year-old sitting at Stanford, um, you know, crypto is probably not the first place you're looking. You're you're obviously looking more at things like AI as being maybe the new exciting frontier. Um, but where we have gained talent is there's a lot of people from Wall Street. There's a lot of people who are coming from traditional finance that are just waking up to ways that this technology can really transform their the stack and can really disrupt their businesses. So I think you know a lot of the infrastructure early phases of of this you know industry um you know some of that is behind us and now we're moving more into you know some of the more kind of financial talent some of the people that are coming in from those more

traditional industries to to take us maybe more uh down the adoption uh curve. And on the flip side of that, right, uh then we also see a lot of web two funds now starting to take interest in um crypto or blockchain enabled startups. So I'm curious, how do you think um pitching to web two funds might differ from pitching to a crypto fund and how does this really change the crypto landscape? >> I will say it's unsurprising. I think as the industry matures, we started off as essentially a shadow system, right? It was, you know, it was very unclear sort of where we fit in the broader sort of traditional uh markets. Uh regulation

was highly unclear. Um there was obviously outsiz risk. Um you know, in those early innings, I think we're at that point where we're growing up as an industry. um and more kind of traditional pools of ca of capital especially with some of the regulatory changes are starting to to pay real attention in terms of how again crypto can disrupt their their various uh businesses. So I think we're at that point where if you are a fintech investor um you are paying attention to what's happening um with tokenization you are paying attention to what's happening with stable coins um because you're you're watching likely in the next two to three years the entire kind of payment stack completely collapse, right? Um and so because of some of those again competitive forces, they're

they're almost forced to look into our space and take note of some of the uh innovation. Um I think broadly that's very good for crypto founders. Um I think there are deeper pools of capital in traditional uh venture capital. Uh there is more plentiful upmarket capital that's going to be available to them especially in categories like fintech. So I think broadly I view it as a as a win. Um, where it can be a little bit challenging is, you know, obviously a a more kind of traditional venture capitalist hasn't spent a ton of time maybe thinking about um, you know, decentralized networks and some of the nuances that might be involved there.

They maybe have aren't used to this idea of um, opacity around sort of value acrruel with different financial instruments. Um, so you might have to do a little bit of educating um, when you're kind of interacting with with non-crypto investors. That can be a little bit frustrating for some crypto founders. Um, whereas again, if you come to a more crypto native firm, I think all of us that are on stage here, you know, you you definitely don't have to kind of explain the history of crypto or kind of decentralized networks does. So, I think we're already bought in. Um, but again I go back to like to me it's a net net win to have, you know, these pools of capital available to crypto founders.

>> Can I can I add on to that real quick? So like as an it was a great point and it's it's that like the deals today are much more palatable and understandable to traditional investors than last cycle. So last cycle what was the big things new L1s crosschain bridges new forms of like dexes things that are very hard to understand and very hard to underwrite very complex value acral all the things that you you mentioned versus now what are the big rounds that are getting done it's things like rain that's like payments but like under the hood there's stable coins that are involved but it's payments and credit cards and debit cards and uh you know issuance it's things that traditional investors understand that tokenization and blockchains are going to be better rails for but business models they

understand versus the cryptonnative business models that were much more challenging for power cycle. So we see a lot more of it um now also not only at series A but also at the seed level as well. >> One more question for B. Um when a seed founder is thinking of graduating to series A um how do they know that they're series A ready or what advice would you have for them running a fundraising process? I think it's you know it's a tough question going back to because there's no one sort of mental model of like when are you ready uh for most founders it's when you need money is typically when they go out for their series A it's kind of like oh well I need to um but I I think it's again I go back to the more proof points you can have around

inflection and on on whatever set of metrics right there are businesses who say okay we're making a very strategic decision actually not to monetize right what we're focused on is building network effects or building our user base or you know uh building uh payment volume you name it again depends on the complexion of the business the more you can point to that part of the the the KPI being derisked the better you will be off right so I think it's you know the more data points the more traction then more again um you can derisk that for an investor the easier the series A conversation will be um there's also I I I will say You know, again, we're making a lot of generalizations, but you know,

we've seen preede rounds that are hundred million dollars, right? It kind of depends. It depends on if you're a repeat founder, this is your fourth company, you have a track record of success. Um, you know, your metrics can l lag for a very long time because the bet is on you, right? That's the underwrite. Um, if you're a business that again, you're you went from zero to a hundred million dollars of of revenue in a very short period of time, uh, the underwrite is the growth, right? like that's like what people are are are kind of underwriting is that one growth metric that they can point to. So, uh it's a little bit varied and a bit of a copout answer, but it is is more bespoke than I think a lot of founders realize.

>> That makes sense. Um so, I have uh we have five minutes left. Some rapidfire questions for the group. So, think maybe like single sentence answers. Um three questions. The first is how do founders get in the room? So, what is your top sourcing channel for preede? Richard. >> Uh, for me it's usually intros from founders I've worked with in the past or like other VCs. Uh, I'm usually one degree connected from like any founder in crypto. So, it's pretty easy to get an intro. >> How about you, Carl? For seed, >> I would say that uh, and by the way, warm introductions are the number one way. Um, so find somebody who knows me or anyone at Sixman Ventures or any venture firm. By far, your deal is going to get much more attention than if you

just come in cold. But also conferences. I've met like two or three teams here that I thought were really interesting. I always try to make myself available and be present at developer hacker houses, conferences, uh any sort of event where developers are going to be is where I try to spend time. >> Um how about for the series A and beyond class B? >> Yeah, I think we we co-invest quite a bit with a handful of firms. So if it you know if it comes through those channels, it's probably the the easiest. Uh I will also say we we really love outbound meaning if you hear from us it's typically because we have a thesis and we have been paying attention to your company. So that I would say number one way to get through the door is to you know be very thesis aligned with

what we're trying to invest behind. >> Awesome. Um second question. So historically tokens really mattered right because it was a quick um path to liquidity. How important are tokens to you today or the uh having a tokenization path? >> Well, tokens have like underperformed significantly. Um I actually keep a spreadsheet tracking every TGE. So there were about 160 TGES in 2025. Um of those about 83% are below their TGE price and about one-third of them are below the price that seed investors paid. Uh so it's a very tough market for tokens. I think uh there's less appetite for tokens unless there's like revenue backing the tokens. Um like you know

like what what we see with a morpho ando a lot of the blue chips. Um I think that's the state of tokens. >> I I can I I'm old school. I love tokens. I think that this whole like tokens are dead is is a an overreaction per usual in crypto. I just think the token models need to evolve, right? And we're seeing the first wave. I think Richard's kind of alluding to it is you can't have a token that's basically just a governance or a utility token. It needs to tie back to something, right? There has to be some fundamental mechanism for why it has value. Um, so I think that Uniswap sort of fe moment was a really big moment for our industry. There'll be lots of other attempts to tie back sort of the fundamentals to this financial

instrument that is the token and then I think we'll be in good shape. >> Cool. Any other thoughts, Carl? Yeah, I mean tokens are incredible at bootstrapping adoption and bootstrapping community. Um, and so they are very powerful, but if you don't have a reason for your token to exist, uh, that acrru value or creates massive amount of value to the protocol, then you probably shouldn't launch it. >> Awesome. Last question. Um, ton of founders in the audience. Uh, one name one specific business or model that you would love to fund, but you just haven't seen a good pitch for yet.

Uh I say probably my highest convent highest conviction non- consensus bet right now is uh non-USD stable coins and onchain FX. I think people write off the market for non-USD stables because it's very small today. But I think as stable coins get used for stuff other than just crypto trading. So like crossber payments, FX remittances, we're going to see demand for euros, pounds, other stable coins. Dollar dominance in Tradfi is about 83% in crypto right now is like 99.8%. So just a little drop in USD dominance is going to cause the market for non-USD stables to explode.

>> I would say data verifiability whether it's in the form of images or like you know textbased data etc. In an age where AI can create anything and the typical rules we use to evaluate data such as page rank and things pointing to each other uh like that doesn't work in an age where you have like hundreds of millions or billions of agents. Um, so actually being able to prove data and its providence is something that is very underappreciated, but it's the perfect use case for crypto in an AI world. >> I I would say uh onchain prediction market. Uh I think, you know, I think we've seen what the the Binance and the Coinbase version of them look like, which is these centralized versions of a prediction market. But if someone can crack the the design space around

essentially creating the unis swap of of of prediction markets, I think it would be a really novel design. So would love to find that. >> Well, thank you so much. Um would love if you guys could give u a round of applause for our amazing panelists uh be from faction, Richard from Veric, and Carl from SixPan Ventures. Um and we will now move on to the next panel. Thank you all for being here and sharing all these insights. Thank you. >> Thanks for the great questions. um from Multicoin. Um whenever you're

ready, please join us on the stage. And Pine from Nitro Awesome. So this is panel two. We are now talking about the great debate um which is request for startups. Um the first uh

question obviously is just going to be level set us on who you are and what your firm um focuses on and what the sweet spot is. Yeah, absolutely. Uh, yeah. So, my name is Spencer Applebomb. I'm a partner on the investment team at Multicoin. Um, we actually published our firm level thesis a couple weeks ago. And if I had to summarize it quickly, it is that we believe blockchains are the first principles correct way to move money globally, uh, organize capital formation and power global trading markets. Um, I think we've we've learned a lot since we started just about eight years ago. Um, and you know, I think we've kind of come to the ter the determination that, you

know, stable coins and payments and finance are really what blockchains are primarily useful for. So, yeah, that's our that's our strike zone. >> Pine, >> hi. Uh, I work for Monet Foundation, uh, lead founder initiatives. So, that's a bunch of residencies. Uh, and the nitro accelerator that we've just launched. uh to give you a quick oneliner. I think we agree a lot with what multicoin thinks. Uh Monad being a general purpose chain, we still see a lot more activity on the payment side. Uh DeFi building blocks are still to be built uh in Monad. So there's a lot of competitive opportunities there and uh ICM is uh one sector that we are pretty bullish on

apart from on onchain social. That's onchain social is just my personal interest that I think is uh was not very well done till now and uh a breakout app that's consumer app would probably be an onchain social app. So >> thank you both for that. So I'm going to start with pne um because u this is sort of the first week that he's announced um the nitro accelerator which is a brand new crypto accelerator um that is uh agnostic chain agnostic. So would love for you to tell us a bit more about this accelerator. It's um you know in collaboration with a bunch of VCs like Paradigm Electric, Dragonfly and more.

Um what's the origin story of this accelerator and why why did you um decide that there was a gap in this market? >> So uh I mean I've been building accelerators or working with accelerators for a very long time. last 8 n months or so we studied all chain accelerators and frankly no breakout companies ever come out of chain accelerators. Uh it's very easy for the foundation to spin up allocate some capital and say okay here's the applications come run it mostly it's run by chain people which means that we are looking for founders to fill in gaps in our ecosystem. So let's say there's no prediction market on Salana. So they

will get one in Colossium. We don't do that. Uh we realize that the only accelerator that actually has worked as Alliance and they do pretty well primarily because founders go there for actual network. Uh chain accelerators by default have adverse selection. So you are never going to be part of an elite network. That means getting 100k 200k from some chain accelerator is not interesting for the best founders. And then what we decided is uh let's be credibly neutral here. Let's not uh run it ourselves in the sense that we are completely in control of it because we

have bias. So we got in these amazing VCs uh to contribute capital uh created a separate uh accelerator brand and they're going to be involved right from selection to program. So of course Monad Foundation funds it and runs it and we will shell Monad to the founders but there's no contract saying you have to be deployed on Monad. There is no obligation to deploy on Monad. If you are a great founder building on any chain, you're welcome. Nitro is a network and we want the first batch to be the most kick-ass batch because that sets the tone for everything else.

>> Yeah. So, what do founders get and um what what sort of uh startups make the best fit for Nitro? >> Yeah. Uh founders get $500,000 from these VCs. uh and uh that's a 10 mil valuation uh token 5 mil equity valuation much better than what any accelerator in crypto or probably very comparable to the top accelerators in web two as well. So you get that day one when you land on the program day you get all of that money guaranteed for every team. Second thing is what we realized is that we need a bunch of uh builders who've done things before uh to come and work with these founders. So thankfully

we have a program in New York which is full of amazing builders and investors. Uh so we've invited them to work with us for a month with these founders and that's uh that's I think one of the biggest value ads. And the third thing is from Monet Foundation side uh one thing that we can provide is top tier growth support for these teams. That's something that Alliance and most other accelerators can't provide. Uh chain accelerators have a ton of attention but not great mentors or programs or money.

And non-chain accelerators have great programs and network but they don't have attention. So Nitro is an attempt to bridge both of these things at the same time and we've got 320 applications in 10 days and I think 35 companies are already uh significant revenue making not trivial revenue so the bar is pretty high and we are extremely excited about this. >> Thank you. Um I have a couple more questions for you then we'll turn our attention to Spencer. Um but the first question is um you mentioned that you've also opened the door to AI founders. um would love to understand how you see the world of blockchain and uh AI colliding.

>> Uh so I think we it's not like we want pure LLM builders or an AI product that's solving a small SMB problem to come in. Ideally what we believe is most AI players will have at least payments in some form especially if they are building agentic uh apps then there needs to be uh x402 or something else that comes up. Uh if that's the case then we want them here. Uh our aim is actually to just support great founders reach PMF as soon as possible. uh we do believe that greatest of founders don't need tactical support like we don't need to teach them D5 if they're building in

D5 or we don't need to teach them tech if if we need to teach them that then they're not great founders in the first place. Uh-huh. >> Um, and you mentioned you're really excited about onchain social, but obviously onchain social has taken a huge hit, right, with uh the fire caster aqua hire and um all these other apps sort of >> lens >> pivoting. Yes. Um so would love to understand is there a social 2.0 you're looking to fund or what's your consumer thesis? Uh I I can definitely say I would angel invest 25K in anyone who's building something that's permissionless and has an open-source client. Uh it's a protocol Farcaster's biggest problem was

the protocol uh was sufficiently decentralized. It was not technically permissionless in the first place and they killed all the clients by acquiring quiring them. The model to look at here is WordPress. If anyone has studied WordPress, is old enough as me, then you know the core is permissionless, minimal and open source. And the innovation happens on edges. So if I could spin up a Farcaster client and say let's use this for my college alumni today, actually that would have been way better. But somehow rest of the clients just couldn't compete with their core client because core client was always

evolving and uh it was not open source which is antithesis of a permissionless uh social network in the first place and I do believe that the innovation is in the algo. Elon Musk Nikita beer both have said this algo is what is pissing off everyone right now. We know it's polarizing. So onchain social has the best shot at telling me show me less Trump, show me more something else, less ports, something like that is very very possible. Uh just couldn't build it on far caster and I can say I tried it as well with a bunch of people two years ago. It just didn't work out.

>> Thank you for that. Um, so now I'm going to move on to a bunch of questions for you, Spencer. And this section I kind of like to think of as like the hard truths of what's happening in the crypto market right now. Um, the first is about infra. Um, block space is obviously commoditizing and funding for infrastructure has really dropped. Um, is the infra buildout done or do you think there's some missing layers still? Yeah, I don't love the idea of homogenizing infrastructure as a phrase. I think uh as you alluded to, block space is completely commoditized at this point. And I think if you're trying to build a new general purpose layer 1 or layer 2, uh it's going to be really hard

and I think crypto capital markets generally have shown that they're not particularly interested in funding them anymore and the the public's not particularly interested in buying them anymore. I do think though there are a well there's a few exceptions on the chain side. First I think you know application specific chains the most obvious use case being a high performant derivatives exchange like hyperlquid and lighter. I think there still are opportunities there. Um and then two I think there's still a lot of infrastructure outside of block space that still needs to be built out. So um you know on the stable coin side um there's a lot of stuff that needs to happen around you know compliance identity uh like wallet abstraction

um just a lot of a lot of things that still need to be built there and then I think on the market micro structure side there's still a lot of things that need to be built like you know onchain performant order books and defi prime brokerages that can improve capital efficiency and um you know things that can combat at uh toxic order flow onchain which has obviously become a huge problem. So I think yeah base layer or L2 scaling at this point is kind of table stakes and like if your pitch is were really fast and cheap and we're a general purpose chain. I just don't think I I think we're past that in the cycle.

>> Makes sense. Um next hard question. Um the sentiment on all coins um are at an all-time low. uh would love to understand you know how you think about the altcoin market if it might return or what kind of altcoins are really catching a bid today. >> Yeah, I hate to sound repetitive but I also hate the idea of homogenizing altcoins. Um I think there are many different flavors of altcoins. Um I think the industry and I think someone said this on the previous panel if I'm not mistaken. I think the industry is generally moving towards show me the revenue um and show me the value capture and show me the moes. And I think, you know, crypto over the last, you know, five to six years got used to projects

that didn't have great questions to all great answers to all three of those questions launch at multi-billion dollar valuations and then, you know, once the unlock hit, everyone sold. Uh, but I do think there are lots of alt altcoins, I don't love that term, but lots of altcoins out there uh where the protocols are generating real revenue. They have network effects. they're compounding and I you know obviously in bare markets correlations go to one which is what we're seeing uh but I think over time that is going to change and there's going you're going to start to see divergence between high quality names and lowquality names.

>> Thank you. Um so let's talk about uh stable coins, right? Um I would say a lot of people argue stable coins are the killer app. Um, so we also see Stripe and other web two companies sort of come in entering with existing distribution that sort of absorb this innovation. So I'm I'm wondering where do you think the startup opportunity is for stable coins? >> Yeah, I feel like I've heard a lot of people say that, you know, the stripes of the world coming in are kind of going to kill the cryptonative companies that are working on stable coins. And I actually view it the opposite. I think it's validation more than anything else.

Um, I will say I'm, you know, there's this whole trend right now of what I pessimistically call corporate chain. So things like Tempo and Arc and Canton and Robin Hood chain. Um, and I'm like generally skeptical of these efforts. uh primarily because you know if you're if you're Aden for example like I just don't see a world in which you're going to be willing to launch on a chain that's controlled by Stripe or if you're Erade I don't really understand why you're going to want to build on Robin Hood chain and so I think if you want to sufficiently attract a large group of third party developers liquidity etc I think there's value in being neutral at the base layer in terms of where we're

seeing opportunities um I think there's like opportunities everywhere in stable coins. Um the first one I guess I'll highlight is we published a blog post three a month ago I guess and it's called specialized stable coin fintex and basically our thesis there is if you look at the the history of fintech there's really been you know three historical eras and now a fourth one but fintech 1.0 was bringing finance online so companies like PayPal and Erade fintech 2.0 0 was neo banks that you know built specific products for specific customer segments. Uh and then fintech 3.0 was embedded finance.

So you know basically putting fintech into all of the applications you use today whether it's Uber or something else. Um I think fintech 4.0 is stable coins and permissionless finance. And what's amazing about that is I think it's going to take us back to the days of neo banks. But the problem with the first iteration of neo banks was their margins because of the rails that they were built on card networks, correspondent banks, um you know, just like a bunch of crap, their margins were not as good as they should have been because there were so many intermediaries underneath that they ended up having to expand even though they really shouldn't have. And so the amazing thing I think now is we can have specialized fintexs that build specific

products for specific groups of people. you know, it could be 10,000 people, but their unit economics are going to be so good that you can actually build a venture scale business in that way. So, um, that's like one area in stable coins we're excited about. Um, the other area is something that we call more efficient credit. I I wish I had a better name for it. Uh, if anyone has any ideas, let me know. Um, but we're starting to see this trend, and I think it's probably going to be one of the biggest themes of the year, which is DeFi vaults. Um, but DeFi vaults today are really just built in a very cryptonative context. So they're for giving leverage to market makers and doing, you know, juicing, yield farming, and things like that. I think the vault

structure though itself can actually be expanded to non-cryptospecific use cases. So things like financing YouTube creators or uh like what Daylight Energy is doing with financing energy assets. So, um I think creating a global pool of capital with localized curators who can allocate capital in more efficient ways using stable coins is like probably one of the biggest opportunities in crypto crypto today and something that we're really excited about. >> Um well, stable coins everyone's excited by, but what else is interesting new primitives uh in DeFi today?

>> In DeFi specifically >> specifically or well, sure, CFI specifically. Yeah, I I think um this isn't going to be that specific of an answer, but well actually I I'll I'll give you two answers. One, I think there's still a lot of primitives that need to be built out to support the next generation of assets that are going to come on chain. Like if you look at the history of crypto, we created extremely overcolateralized borrow lend protocols because the collateral was extremely volatile and it didn't generate cash flows and uh you know everything was fungeible. So we ended up with a and compound which at the end of the day are great products but I don't think they're particularly useful for a lot of the

assets that are going to come on chain in the future. So maybe orderbook based lending uh would work better and like that's interesting or fixedterm and fixed rate lending still haven't really reached any amount of scale on chain. Um, so I think there's like new primitives that need to be built out. And then on the other side, like the actual issuance side, we're extremely excited about all sorts of traditional assets coming on chain, whether it's equity, private private credit, uh, FX, commodities, uh, real estate, whatever. I do think that, um, I keep saying homogenizing, but I'll I'll I'll do it again. I think homogenizing real world assets into one bucket is generally not useful because I think the go to market

functions and the and like the regulatory frameworks around all of them are very different and unique and they're all going to come on chain in different ways. Um but that's something that we're really excited about and actually we're working on a thesis right now to share publicly about how we think each asset class uh is going to come on chain and like the path dependencies associated with all of them. One more question for you. Um, and this one is really about Deepen because Multicoin was one of the earliest backers of Deepen. Um, how do you view this evolution of realw world physical networks in 2026?

>> Yeah, we uh I think we were probably one of the earliest if not the earliest investor in DPIN. We uh we initially invested in Helium in the summer of 2019 and since then I think we've probably backed close to a dozen deepin networks. Some of the most notable ones being Hivemapper, Geodet, Fuse Energy uh and Arweave and some others. Um, I think Deepen uh is in candidly like a pretty tough spot right now. And I think the reason for that is they're very uh cyclical and I guess flywheel driven in a sense that when token prices are going up, it's a lot easier to con convince

the supply side to join. Um, which then creates a flywheel where you get more demand that leads to increased token price and so on and so forth. um because correlations go to one in bare markets and deep pin assets are down just as much as everything else in crypto if not more. I think we're like it's in a tough spot right now. I will say I think the other challenge for deepen today is there hasn't really been like a northstar success case in the sector where you know if someone's building a company in it it doesn't even matter let's just say logistics they can't look at a deepin network and say oh like you know this company in this sector built a deepin product scaled it to 100 million

of revenue and like I can look at that apply the same capital formation model to my my own sector. Um, and so I think, you know, we have our views obviously on like what could be that north star, but like we're just not there yet, but it is a sector that we remain extremely excited about. Um, and uh we Yeah. So that's that's kind of where I sit right now. >> Awesome. So we're going to do some rapid fire um overrated underrated questions. I'm going to name a sector uh and you just say overrated or underrated. No explanation. No explanation >> unless you want to give an explanation.

But um uh crypto AI >> uh underrated >> uh fairly rated. >> Oh, that's a that's a good addition. Okay. Prediction markets. >> Underrated. >> Underrated. >> Uh Bitcoin L2s >> very overrated. >> Extremely overrated. >> Wow. A lot of consensus here. Privacy >> underrated. >> Yeah, same underrated. >> Okay. Um, gaming >> overrated, but I don't know if anyone actually thinks it's great right now, but yeah, o overrated.

>> Uh, I would definitely say it's underrated in terms of uh market cap that it needs to achieve just to free up the assets from web to gaming companies treasuries at this point. So, the market cap to be acquired is much much higher. So gaming is a really controversial one because if you actually look at like funding data, there's been a ton of funds that still go into gaming still for web 3, which you just wouldn't expect right? >> I can tell you we're not. >> Yeah. Um, okay. Um, decentralized DI. >> Oo, underrated.

>> Underrated. >> Uh, underrated in long-term for sure, but I think most of the projects right now are just not doing >> Strong. Agree. >> Yeah. Um, Social Fi >> overrated, >> extremely underrated. I think, this is my personal bias. Don't think Monet Foundation is so so bullish on it, but I'm extremely bullish on this. >> I'm I'm curious, Spencer, why um social in general is a overrated category for you. Um, I think it really just comes down to what we at Multicoin view as like the primary rayon detra for blockchains. Uh, which is, you know, movement of money,

uh, capital formation and trading. And I don't I don't think that there's really a great place for that for any of those in social. I do think that like there are some interesting things around embedding DeFi and payments into existing social apps. And I know we're going to see what Twitter X now uh does, but I do think there's a massive opportunity there. But like convincing people to switch from the networks they're already using. I just don't see personally why blockchains are like a good reason for people to switch and like what they actually offer that the existing ones don't.

>> Makes sense. Um okay, so this is the same question from the last panel, but um how do you source your deals? is like what is your highest uh avenue for channel for sourcing? >> Uh for us uh I think it's our list of referers since this is the first cohort and generally at Monet Foundation I think when someone comes in with uh with a reference from someone that we know and we trust. Uh it makes everything simpler. It's very difficult to filter otherwise based on uh mostly like founders intent is what we are looking for. Uh smartness is the secondary thing. Uh if they're looking for a short-term thing, then even the smartest

founders, we really hesitate in working with them. So I think references is number one out there. >> And Nitro is a little bit unique in that uh they actually list who they care about as referers on their website. So >> they're on our website. Yeah, they're on. >> If you're looking to apply for Nitro, take a look at who their referers are and get a referral that way. >> We might copy you on that. Eli from Maltcoin is our referer. >> Oh, there you are. >> Yeah. So, >> um, Spencer, uh, how do founders find you?

>> Yeah, I think it's evolved over time. Uh, I tell people this and they never believe me, but, uh, of like the, you know, five best deals we've done in the history of the firm, I think four of them came through Twitter cold DMs. Um, so, uh, definitely VCs, if you're listening, keep your Twitter DMs open. There's a lot of alpha that you can generate from from having them open. I think at this point I I echo a lot of what he said. Um referrals from existing portfolio founders I think is probably the highest signal uh is the highest signal way to get deal flow. Um just keeping a network open. I think at this point we have a pretty big brand in the space. Um so I think a lot of it at this point is inbound but of course we you know we go to hackathons

uh we go to conferences just you know chat with people. Um yeah, nothing too unique I would say. >> Um if you have a request for startup um uh so basically complete the sentence um someone please build X because I will fund it immediately. >> I think I already said that. I already said that. Uh for sure please if you're bringing onchain social take an angel check from me uh at any point in time. Um it well it's funny because the founder in the crowd right now listening is doing somewhat similar to this but uh if you're building uh a instantiation of

DeFi vaults for real world use cases uh I'm extremely interested in funding that. >> Awesome. Um I just want to conclude with um Pine basically announcing uh the deadline and the Nitro application process since we just had him announce it this week. So for founders in the room looking for some accelerator funding, tell us how you can apply. >> Thank you. Uh we have uh we have nitro ACC.xyz or if you search nitro accelerator on Twitter, you should be able to find it on one of the Monarch handles as well. Uh the deadline is pretty far. It's actually 14th of March.

The reason why we did that is because we want live products for sure without you can deploy it on any chain feel free. I think 50% of our applications are Solana startups at this point. Uh then B and then Monad. So don't worry if you've deployed on any chain. We want you uh get 100 users with retention. If 100 users are using your app on a weekly or a daily basis, we are extremely interested. So shipping and retention are the only two things that we check here frankly. And uh apart from that get any references as many references as possible. They're all listed on our website. Everything is listed there. And uh what I would say is super excited to have founders who are building something

very long-term, right? We want this to be a group of people that grow together. That's the only thing you can get out of it. 500,000 is a bait. Frankly, uh if you need $500,000 to survive or to grow, then you're going to get rejected. If you don't need $500,000 and you're coming in for the network, that's where the most chances of selection are going to be. So our headline is you don't need an accelerator. If you do, absolutely. Then we have a lot of competitors I can refer you to. Please join one of them. They'll give you money for sure.

>> Thank you both. Thank you for all the insights for being here. Again, Spencer from Multicoin and Pine from Nitro. >> Thank you. Thank you, Tina. >> All right, we're going to um take a few minutes to turn the room. Up next is