Meet the Blockchain VC, Pt. 7

Transcript

welcome everyone here today at meet the blockchain VC webinar hosted by crypto Valley Association in took we are quite the big Association and we're very happy to having you here I think the crypto industry here into is becoming more and more important even during not so easy times I think it's very interesting to talk by um that was now elected by consensus magazine the most important part for crypto companies and crypto Ventures I'm very happy now to welcome

Auntie Pete from Eco test VC Capital to have us to have to have you with you and I'm also very happy to welcome the mail zahaze from cointelegram have in participating in this in this in this webinar um maybe I think we there is I I prefer to let Auntie Pete introduce herself maybe the melsa you had also a few words to welcome our participants sure well I'll go ahead and let Andy introduce herself and then I'll say a

few words uh for the participants yeah so I'm Andy Pitts I'm a founding partner at ego death Capital so we're um a venture capital fund based in the U.S um investing in companies that are building in the Bitcoin ecosystem but investing in companies all around the world awesome pretty much for hosting me it's great so it's great to be here and to speak to your to your members may I just quickly ask one question before you emails it because I think it's a very interesting name the echo death Capital maybe can you quickly explain us a bit why and how he came the teacher that you've chosen his name yeah so we were doing a lot of thinking

around what we wanted to name the fund we wanted to do something a little different something that would be really kind of recognizable and interesting um and we were thinking about what Bitcoin represents and this sort of transition to a new system and and um kind of releasing the one way of seeing the world and kind of this change and this concept of ego death came through in medicine it's a sort of a concept in meditation or spiritual practice of releasing um the ways the habitual the patent the conditioned ways you have of seeing the world and being able to release that to see um reality and to see things as they truly are and we felt that that was um that was kind of Representative of

Bitcoin of releasing kind of like the old way of doing things and seeing this kind of much better way um and there's so many also uh we sort of keep learning new things it also represents a lot around how we approach um from a values perspective how we operate as a team how we approach things in general it's not about an individual it's really about remaining open-minded I think the creation of Bitcoin by Satoshi was kind of this ultimate Act of ego death that he created it and then left and you know didn't take any credit for it so there's sort of been many layers which ego death kind of works as a Bitcoin VC thank you oh yeah thanks a lot for that I I um I wanted to just say a brief

introduction to the meet the blockchain VC panel so basically we have these calls quarterly um and we invite esteemed VCS in the space uh like Andy Pitt to join us and um in addition to the quarterly meet the blockchain VC uh panel discussions that we have for the investor working group at the CVA we've also now made a telegram channel for everyone so that we can keep this discussion going uh in between these panel discussions so I'm going to go ahead and Pop That telegram channel in the chat so that anyone can join us um and then also I just wanted to introduce myself as well everybody knows

me because I am co-chair with with Martin but I'm the director of research at Queen Telegraph and I'm also managing the the Bitcoin only active active strategy for zeltner and Capo based in Zurich thank you perfect so I just jumped directly into in in into our question we have prepared a questionnaire as many of our listeners know it's always kind of the same fashion so that we can really compare how um our BC Services we're hosting here um how how they differentiate between them and now maybe the first question to

Andy why do you invest in blockchain and where do you see its biggest potential so we invest um as I sort of said only in Bitcoin um so Bitcoin is being um we can go into that I guess a little bit later the biggest potential is really creating a new Global Financial system that's uh decentralized that's um Democratic that's uh open to anyone um and really replacing this old system which is very segregated which is very kind of country specific very much controlled and centralized by by large organizations by governments um and so really building this whole new

system from the ground up for kind of everyone in the world to take to be a part of is how we see it and now you told me you're you're not only investing into Bitcoin you're not just a Bitcoin whale I mean that's my my question do you invest in your protocols in blockchain infrastructure projects in applications so we don't invest in Bitcoin directly we only invest in companies that are building technology for the Bitcoin ecosystem um so that's a little different to so we don't invest in any tokens or new protocols or or anything like that we're investing in companies that are very much kind of look much more like

traditional Delaware C Corp technology corporations um so they might be more analogous to companies like a Paypal in the traditional Financial ecosystem or it might be a company that's using um the new Bitcoin rails Bitcoin and lightning rails um for a specific use case so um we do think that potentially in the future uh some companies May IPO via a kind of maybe a Bitcoin a tokenized method um but really at the moment we're focused on companies that are building much more kind of real world application um type companies I mean the let's say the the the the the

recent during the last year we had kind of a roller coaster also with Bitcoin and we had lots of challenges also um did you and you race you found you started I think in September of last year so maybe if you could explain us a bit did you refine your investment intelligence process since you started or maybe also previously that you've started yeah so we've always had a very very diligent process so I spent nearly um eight years at Goldman Sachs um just a little bit on my background I guess as well as the fund I started my career in emerged in Acquisitions um moved across to leverage finance and then

um moved across to New York so I was in Australia moved across to New York and sat on the trading floor in a principal investing role there um we had kind of a mini Fund in a way on the floor we were always kind of identifying designing and then taking principal positions in very large structured uh credit transactions both on the funding side and the deployment side um so got a lot of experience taking very very large transactions principal transactions through the Goldman Sachs um Capital committees uh so you can imagine you know if you're taking a multi-billion dollar principal position through um full Capital committee it's a very very diligent process and a very very structured process so that a lot of the

process on that I've brought across into the fund um obviously it's a very very different way of thinking it's much more upside focused but in terms of the process the level of diligence the way that we um that we run transactions I've brought that across um so certainly um I think the collapse of FTX has made us particularly diligence around anything that's kind of an exchange anything that's holding custody and we're actually doing a diligence process on a company that is effectively custodying assets right now and it's really like an order we do have a huge amount of extra diligence for anything like that and really hold any company that is custom users funds to a very very high bar um because it's from a maybe even if it

they're not required to by a regulatory perspective um we would hold them to the higher bar as though they were being regulated by say like a US regulator interesting maybe one last additional question regarding to to now your background I think you're not the only one from a Goldman Sachs alone in your company or are you I'm the only one from Goldman Sachs in your death Capital yes yes thank you excellent well thanks a lot for kind of the the introduction on on your background and then kind of your your you know the way that you do due diligence and um I guess you kind of already touched on this a little bit but the kind of the Bitcoin versus ethereum

or you know other coins so do you see the world more as a Bitcoin World Bitcoin Centric or ethereum-centric or what how do you see those those two uh Assets in the future so we we do definitely as a team see that Bitcoin is really the only truly decentralized and truly secure cryptocurrency um and so as we think about an entire system being built on top of a cryptocurrency we really want that to be built on top of you know something that's secure and decentralized and why does decentralization matter well if you don't have something that's decentralized you get it's basically reflecting the old system and will be

co-opted if something is decentralized it prevents manipulation and prevents things being kind of um co-opted by a certain personal Organization for their own um outcomes and that's the whole point of decentralization so um while there's been a huge amount of EX you know experimentation Innovation on ethereum and other ecosystems and we we really as a team look at what's going on in the other ecosystems and there's so many amazing Builders and entrepreneurs and projects um but really from a long term we do as a team have this piece is that um everything will be on Bitcoin now historically that of course couldn't happen so um historically as I'm sure you all know

there's this Bitcoin this cryptocurrency trilemma the trade-offs you can only have trade-offs between decentralized security and scalability so originally ethereum was very much decentralized and prioritizing that and over time there was this pressure to increase scalability at the base layer which led to and also these kind of environmental concerns where they're real or not we can go into that um and that led to this kind of shift to proof of stake and if you look at how proof of State works it's it's extremely centralizing um it looks a lot more like the existing Financial system of having kind of basically three key delegated nodes that everyone is delegating to you're placing a huge amount of trust in those

delegated nodes and so that does make it challenging from a long-term perspective for ethereum to actually remain decentralized and to actually have the whole point of having a blockchain in the first place um which is decentralization and so that's why we really but and we're at this inflection point in Bitcoin which was really the thesis around starting the fund that now you can actually build things on bitcoin so what we've developed what not me personally what people in Bitcoin have developed is scaling for Bitcoin that sits at the layer two levels so keeping the decentralization and security of that base layer like that's what you want it's really solid base layer that's hardened over time being tested and

tried and now you have scalability and functionality at Layer Two level really predominantly through the lightning Network and now that you have scalability it's just kind of coming coming to maturity now with scalability and functionality of lightning now you can build these kind of really interesting scalable businesses on top of Bitcoin really for the first time and that was very much a piece of the fun that there would be this wave of companies building on bitcoin and and we wanted to kind of really be the leading fund investing in and supporting those companies oh yeah that makes a lot of sense to me so you kind of touched there on a little bit of of proof of stake versus proof of work and earlier you mentioned that you're not investing in tokens so I was

curious you know kind of there's a a debate right now you know will Bitcoin be able to take some of the defy away from ethereum um and we saw like over the last four or five years we saw a lot of other coins pop up and say okay they're an ethereum killer they're going to get dexes and they're going to get all these tokens on top of them and so a lot of coins saw these like kind of huge pumps and then huge let's say dumps but um if Bitcoin was able to take some of that you know defy activity over do you think that um like what are your thoughts on things like Stacks that have a token or like versus RGB like how do you feel about these these different you know approaches to building on top of

Bitcoin yeah so there are very this I guess four key scaling solutions that sit on top of Bitcoin there are um slightly more but there's lightning which I mentioned there's also liquid which is a side chain which is run by block stream Stacks is another one um RGB is another one um uh we do think that there will be a shift of defy and particularly I think things like nft activity across onto Bitcoin and we're already seeing that um so stocks hasn't managed to get a lot of traction so far um there's been a lot of building but in terms of actual users and traction it's not um it's not really getting there and how we see the world going is really

um a shift from from tokens and side chains to basically you can just do that all on the Bitcoin main chain or on Lightning which lightning itself is also decentralized so we're just starting to see that now which is very interesting um but for instance you can already I'm sure you've all come across the huge blow up in ordinals for instance um but you can inscribe nfts directly onto Bitcoin there's also Taproot assets coming out by lightning to be able to do nfts and tokens on top of Bitcoin on top of lightning so we're in a more scalable way we're already seeing people talking about using brc20 and ordinals and interpret assets to build things like the x's and exchanges

um now whether they whether we would invest in those with a different question we're really looking for for for teams that are building products that really I guess contribute in a really positive way so some of the sort of um maybe trading of tokens um we're really looking for teams that are building something really of value like real world use case value for Society for Humanity um and I'm not sure personally that some of the um kind of activity around D5 is necessarily being constructive um there's been a lot of money made and money lost um but we really focus on what's building a real world you like a product

that's that has a real real world utility today that we can see really having real world utility and building is something scalable in the next 10 to 15 years it's interesting but maybe could you give us also some concrete examples yeah I mean if I just look at something like Solana for instance I think I think you have Solana and then you have you know all of the different cryptocurrencies um and then you have even if we just take um the example of um Luna and then you had people it was like this really exciting thing and Pete had a friend came to me in 2021 like you can you can stake one of these

cryptocurrencies and you get like a 20 return and then you can like put them into a liquidity pool and liquidity farm and I was doing all of this I mean like we all got into it and but at the end of the day all it is is like gambling and Ponzi schemes with some potential use case at the end um I mean Solana like potentially had this use case um but really once you got into like liquidity farming and staking and investing in 300 you know returns it just lost all sense of a real world utility and it all kind of worked well while there was this excitement and Buzz but it was very much um like kind of the Tulip Mania on steroids if I can call it that and so

while that's interesting and we love some of the tech that's being created by it and we love the Innovation and you know this sense of excitement and creativity um that really a lot of crypto has done and I love that personally um houses are fund we're really looking for things that have this more kind of sustainable long-term long-term um model I guess [Music] um maybe I mean just an hour of what you explain but what what what is now I mean you told us your Bitcoin centrica I would say an application on it what's your thoughts about a multi-chain world do you think will there be a

multi-chain world or will everything be built finally or eventually on on on on on on on the Bitcoin and maybe ethereum Network yeah I'm really open-minded um I think historically a lot of reasons people because they could get um financial support for building on those chains because of the initial coin offerings well not Ico anymore token offerings that were done um and so there was this financial incentive for Founders to build on on different chains um I think really what the last year has

shown is there's a huge amount of fragility in those new chains and so if it really Founders that are looking to build something again that's like real that's deep that's um sustainable they will look to build on on very solid base chains that aren't going to have problems in those base chains you know the outages on Solana or you know a new chain that maybe will lose its community over time um and so I don't know if it'll be a multi-chain world I'm very very open-minded um to that it's very very possible you'll have different base chains that have different use cases um you know certainly that was very much Bitcoin and ethereum Bitcoin was really like store value money ethereum was kind of

um a computer engine where you could do smart contracts and build all these interesting applications so that was sort of the original creation of ethereum and and I really I can definitely see that is as a world we may potentially have um but I am very bullish on a lot of that being able to be built on Bitcoin now now one more question before I hand over again to to Demers me being a lawyer you're being based in the US I mean the last few months there were lots of discussion about the the SCC acting into space which agencies acting in the space how should U.S regulation

develop maybe I would like to see how you would like to see development where it worries you or where you see the biggest challenges speaking of you being active in this field in Texas and in the US and maybe some personally um experiences but also your thoughts about it yeah yeah unfortunately I started to deal with U.S Regulators when I was at Goldman Sachs and I learned firsthand that they're a mess um and I think in general just it's it's just the lack of regulatory regulatory Clarity here is crazy um I think Europe and Switzerland do obviously a much better job of that

um it's and they're definitely we have a comp I have a company that's in Switzerland and they're working on their Mica license and it's just you know it's great it's all clear this is the steps and it's great um so in the US I think regulatory Clarity I would love to see obviously Bitcoin has been much less impacted by the recent actions kind of not really impacted at all I would say um we weren't necessarily surprised by the recent actions although I do absolutely have sympathy for companies that um we're not doing anything that was legal and all of a sudden they're being prosecuted because there was no regulatory Clarity like it's just ridiculous um

one thing that really concerned that does concern me that I would love to see in Bitcoin is an understanding of non-custodial so in the existing regulatory Financial landscape the whole concept of non-custodiality doesn't exist so everything is really geared around um anyone who's custodying someone else's funds having this fiduciary responsibility and their and that imbalance of power and the risks inherent in the sort of fractional Reserve Central like banking model creates so much risk there needs to be regulation um when it's non-custodial you don't need that at all if someone is custing their own funds in their own wallet like that

doesn't need to be regulated but at the moment it's just this whole New Concept that's the the rules just like don't encapsulate and this has led to um an issue in Bitcoin so there's been a new a new sort of lightning facilitates micropayments so lightning Network being the second layer on bitcoin facilitates micropayments um and so apps have basically Incorporated that which is amazing like anyone can just have their own wallet and all the app is doing is facilitating one user sending a micropayment to another user they're never taking custody of users funds it's one wallet to another but the app store has taken issue with this because it's not explicitly legal it's not explicitly

illegal and so the App Store having their Monopoly power and you know as I'm sure we've all had to deal with making very very arbitrary decisions has just said we're not going to allow this um which that's really frustrating so that's kind of one really big thing in the Bitcoin world I would love to see regulatory Clarity on and regulation around is is non-custodial wallets yeah I think wasn't there a Bitcoin payment lightning payment app that just got taken off of the app store yesterday or something which app was that I forgot which one it was yeah there's been two so one there's been a new so Bitcoin is the decentralized transfer of value and there's a new protocol for the

decentralized transfer of information called Noster um which is being really supported by Jack Dorsey and that's um there was an app built on that called demos which was kind of like a social app incorporating kind of you could zap someone um this instead of just liking on Twitter you could zap someone like a few stats and it would it didn't have a wallet on the app I would have my like wallet of Satoshi or any other kind of wallet and then it would just go directly to the wallet of whoever was receiving it which is amazing like it was great um and the App Store basically was like this is not allowed by giving you 10 days to remove the feature or we de-list you so they removed the feature

um and we've also had issues like one of my company like relay which is based in Switzerland got deleted from the App Store with no warning um even though they're completely regulated they have all the right licenses in Switzerland they're completely in compliance with European laws it's a non-custodial solution um and they just got deleted they managed to like work really closely with the App Store and it's up and running again and it's kind of fine um and then there was another non-custodial wallet called Zoo switch got delisted as well well yeah it really seems like um part of either competition or part of choke point 2.0 or I'm not exactly sure but that that's really a Pity I'm also

invested in relay um I've known Julian for five years and I joined uh relay as an investor in 2020 um so I think I think we're in good company there I saw the updates when uh Julian announced uh that that uh you know you guys were coming in and I was so excited because I've always been a fan of both Jeff Booth and Lynn Alden I've uh you know for the last two years I think I've watched every single podcast that Lynn Alden has done and I've read Jeff's book and yeah so I think that that was it's huge and really kind of hits on that point that you were discussing earlier about being non-custodial like that's you know it is a totally different setup than what we

have with other apps in traditional Finance where they are taking custody of the funds and and yeah and different Services we use in traditional Finance so yeah those are all great points um I just have a couple questions about uh kind of like the fund and and kind of your approach so um is it okay for you to kind of discuss kind of the size of the portfolio and and um maybe a little bit about the different companies in your portfolio yeah of course um so we so our approach has the funds for our first fund is investing in seed And precede um we tend to take larger checks into each company and then we're very very

supportive proactive we spend a lot of time kind of supporting those teams so we have five portfolio companies to date um we'll probably have another five to seven out of our current fund so we're very actively looking for Investments at the moment um I'm pretty excited about the quality uh in the last few months um so I'll go through our portfolio so really is one of them based in Switzerland so I've learned a lot about Switzerland I also have some family history in Switzerland and go there every year so um it's really nice to have a company there as well um so relay is a really it's a Bitcoin only on-ramp in Europe um so it's really an alternative for people who only want

to be Bitcoin focused um to buying on a coinbase or something like that where you go on and there's all of it's really complicated there's all of these different currencies um and it's also non-custodial so direct into non-custodial and it's really about building a community and and giving people this app that they want that if you want to recommend to your friend to buy Bitcoin you can recommend really and we see that being as really a key part of the global infrastructure and in the US you sort of have a few companies doing something similar if we think about Swan or river or Unchained um you have kind of a few um and so relay is really taking that position in Europe um we love the brand that they've built so far and and yeah you know Julian he's

great um another one so Breeze is a is a one of our portfolio companies Breeze is effectively like we all know Alchemy on ethereum they basically abstracted all of the complexity in deploying smart contracts onto eth which really facilitated a huge amount of development on each um and obviously they were very very successful as a company and so we really see Breeze in a way as the Alchemy of lightning so they basically they're they've been a leader in lightning technology for years and recently doing this pivot to building an API so obstructing all of the complexity of building on Lightning which is very complex um so that anyone can integrate lightning with you know a single line of

code onto their app um onto their company into their website um and it's also non-custodial which we think you know it's discussed is is really well positioned for various reasons and so that's a great company fetty is another interesting one and stop me if I'm going on too much um it's fine so fetty is um so we all know like we all want to do self-custody right like everyone in Bitcoin is like you should just self-custody everyone should be the reality is it's very difficult um so self-custody like first party custody is like difficult for even like me who's you know really deep in Bitcoin um hard for me to recommend to my friends the onboarding it's hard and

third party custody-owned exchange is as we've all learned like very insecure and so fetty is basically bridging that with what's kind of like a second party custody model um so it's kind of a community you and your first party contacts can build us kind of a self-custody with social backup with social recovery where you effectively like have an app built to support that and it's built on top of something which is called um a fediment and a fediment in a way is um so if we think about Bitcoin was built from these generations of like ecash and ecash was the precursor um and one of the ideas around ecash was a charmian mint um which was put forward actually before

Bitcoin but no one ever implemented it and so fediment is actually an implementation of an ecash model so each Federation under 30 becomes like its own little bank and then they're interoperable um via lightning and what he saw was this really allows for self-custody or second party custody to to scale in a huge way globally so people in developing countries um instead of it can help them to for each Community every village um to use Bitcoin and custody their Bitcoin um he's working with activists around the world who were really kind of suffering from Financial oppression

their bank accounts are being shut down by the state if they were protesting um you know things like that so there was this huge demand from activists to be able to use Bitcoin but the technology wasn't there so this is a really interesting idea um and working very closely with the human rights foundation and where kind of the focus is really on the global South um and that's a yeah it's a really interesting very interesting team and they're also obstructing the complexity so the app is like super simple you just open it and you can transact they're like abstracting the complexity of xiaomi and mints and all of that which obviously most people will have no idea about and then sonota is really is totally different again sonota the team came out

of the energy Industries they have Decades of experience and energy and saw this big problem where you know you're getting energy constantly but the payment is you get a bill at the end of 30 days which is payable in the next kind of 30 to 60 days so it creates this huge lag and what that means is it creates both a cash requirement like a kind of working capital requirement and credit risk for energy companies and what they're providing as a solution which is um basically like using the lightning Network to settle payments much quicker so daily hourly weekly you know whatever whatever the solution wants um which allows for a huge reduction in credit risk and cash collateral

requirement for energy companies um and allows just this kind of seamless flow of payments for for energy really kind of opening up a lot of hopefully innovation in the energy sector because which has been held back by these issues um so yeah I'll stop there um it's a lot Oh Martin did you want to yeah I wanted to say something I forgot so we switched to micro so nope there's also based in Switzerland right sonota yeah no they're based in the US they're based in the U.S we only have one Swiss company so far okay good aha hopefully we've also confident uh yeah I think that I I so you gave a really

great explanation of fediment because I was talking to Matthew mizinski's of Porkopolis and he was trying to explain like the economics of how it like of what fettiment was doing but but that's a that's a great like background on you know the the the charm mints and everything like that in case we wanted to like understand it better but that that's been that's really fascinating and then also I think I think one of those people from and now how do you spell that the one that does the lightning Network payments for the energy companies the nurses okay I think I might have met one of them at like consensus or Bitcoin Miami recently but um yeah that's a great use

of lightning Network as well that was so fascinating to hear how that works but yeah thanks a lot for letting us have a sneak peek into your portfolio at ego death maybe Martin I'm not sure if you have uh some next questions lined up oops you're muted I just say the microphone I think it's easier because of a petty then it every time um how it may be also if you if you act as an investor I'm just wondering are you always or are you leading back investor are you co-investing so we do like to lead but we don't need to

um so we have led or co-led every deal we've done to date except for Wolf which is an incubator we invested in which didn't have a lead um but we're more than happy to co-invest as long as we like the lead and we trust that they're kind of doing everything properly so if we can yeah first for a good lead we'll we'll co-invest okay what's what's ticket size you you you're doing so we've invested historically between one and one and a half million but we can go lower as well so if it's something in an Emerging Market where the valuations and government Capital requirements are just lower or it's you know a really early stage we typically aren't first check-in so we look for some build some traction um we were the first check into sonoda

but they really kind of done a lot of work um while they're in their day jobs to develop that company um so we can go as small as kind of like 250 500k for the right opportunity as well and maybe also there's another question how do startups usually find do you find you or do they do do you wait to get approached or are you prospecting yourself so we're lucky I think the brand we've built in the last year um you know a lot of people building in Bitcoin now do want to work with us and so they will come to us whether it's via an introduction or and we get a lot of submissions on our website and we're really really happy to get people just submitting on our website and we'll

respond to them straight away um we get a lot of meet people through we get introduced by Founders we've already existed in invested in so mostly it's coming to us that said we're always very proactive and going out to the conferences speaking meeting people kind of constantly talking to everyone we can in in the industry and building relationships so that we know every project that's being built and can get the right introductions um if we see a project that hasn't approached us yet yeah maybe one last question before I hand over to the mails um I've heard before we had invest in one Swiss company I mean then um you you want to basically you wanna you wanna really help to resolve

issues problems which are important to the world and also to the southern part of the world you've mentioned before so my question do you invest worldwide yeah we we invest worldwide so so far we've invested in Switzerland we have one portfolio company so Breeze is actually based in Israel um it's always fun because then you need to engage local Council and learn a whole new set of laws and sitting on a board of business company like so it's definitely a little extra layer when we invest globally but something we're very very willing to do and recognize Bitcoin as a global solution that we need to be Global

um as well and I I really like Switzerland as a jurisdiction I think to demelzo your point at the start around it being a really really important place for crypto and we really really see that we think Switzerland historically uh has always had this focus on self-sovereignty and sovereignty around money um and that's something that's very very in line with the values of Bitcoin and crypto um and the way that from our you know Julian works very closely with the regulators and so we've heard how constructive Regulators are how proactive they are um so as a jurisdiction we really like Switzerland and we're certainly getting feedback from companies we're talking to

that are thinking of um red domicileing into Switzerland so I definitely see and that was a something we really liked about relay was that it was based in Switzerland um we see that as definitely kind of an advantage and really really well positioning them to kind of go into Europe good to hear yeah yeah yeah I think was it Obama that said Bitcoin is like a Swiss bank account in your pocket or something he said something like that a couple of years ago I mean uh looking back on it I think he meant it in a bad way somehow by looking back on it I think I think he was he was quite right um well okay so discussing okay you you're able to invest globally

um and you kind of discussed the ticket size so in terms of like when you're looking at a team um behind a startup or or a company that's already gained some traction what kind of qualities are you looking for I was listening to a podcast you did a couple of weeks ago or a couple months ago where you mentioned that you are looking for a team kind of versus one person that does everything because you also had a background in being an entrepreneur I think that was kind of I tried to do that it doesn't work yeah so maybe if you have a little bit like what do you look for in qualities of you know team members yeah we're definitely looking for people like we always call them like tier one

entrepreneurs we really want to invest in the best um and so we really think like are they the best person in the world to tackle this problem um and to build that they're trying to build or can we support them you know bringing advisors can we like help them to get there um we really like teams that have some sort of relevant experience in in what they're doing so the Sonora team they have this amazing energy industry experience so they're like really the right team to go after that or OB the CEO fetty has he ran the first Bitcoin exchange in the UK he has so much experience in that Andy has these amazing connections to the global South um and he's hiring this amazing team and the tech so it's just like teams that have really

I hate to use this is a very cliched thing proof of work so they kind of have demonstrated in some way that that they that they're people of doing what they say they're going to do um so typically when we have a team come to us which maybe has just a pitch deck um and isn't doesn't have a huge amount of experience or hasn't tried to build anything yet we're not really going to invest at that point in time but if we think it's an interesting idea and team we might say keep us updated we might be interested in your next round once you've proven to us that you can build and get some traction um so we are typically looking for companies that have some some sort of build and some sort of traction whether

it's a basic MVP it doesn't need to be users the traction could be in um kind of feedback they have from potential customers if it's a SAS product or Lois or pilots in place or something like that um yeah that's like the key things and then we have our whole you know diligence memo and um you know all of the typical things you look for like at the right Market size that's often lacking for a lot of teams um often people are trying to build a tech that's in such a problem so we're really like okay what's the problem that this is solving have you gone out and spoken to your customers what's the feedback like those sorts of things where I think often entrepreneurs

um you know like to just build a product but what's the go to market like how are you actually going to get it if they had to be about is it 10x battle why will people want to use it um those are the types of questions that we're asking so um on that point and before I passed over to Martin are there so you're looking at decks for for your next round of Investments are there anything like you get together with Lynn and Jeff and and your your co- Founders and you say I wish that Bitcoin had this company or I wish that there was this you know product being offered but you're not getting that from any of the decks you have seen so far like is there any like product out there that you think Bitcoin

really needs one thing that I really want to see that I've seen a couple of people send a deck for but I have we haven't invested and is like a proper nft platform for Bitcoin um so at the moment uh we have ordinals but you also have Tap Root assets coming up on bitcoin I love nfts like I know a lot of bitcoiners don't I think they're very cool I think it makes so much sense that you have digital art and collectibles and um and so I would really love to see a team that's obstructing all of the complexity of doing an ordinal and making it really really easy for a B2B for SAS because so many brands are really exploring nfts and I would I really want to see them on top of

Bitcoin because it's the most stable base layer blah blah like I've spoken about and I love them so I want to see them in our ecosystem that's one company um there are a few other kind of areas but I think that's like the one that personally I really want to see but we do sit down and like map out the landscape and think okay what needs to exist what hasn't been built yet but then entrepreneurs come to us and we can never have thought of the things that they come up with good yeah this would now maybe for us I mean you're you now you you started your founder um a year ago or and and of course you're in in in the industries it's much

longer so I'd like to know from you if you could maybe tell you what's your best and your worst investment experience um I have to say Swiss documentation was challenging um but uh we learned some lessons there um we haven't you know we haven't existed long enough to have a bad experience yet um we haven't um had a company fail or anything like that and that will come for sure we're not you know we're very realistic about that um I think the best one has been fetty fetty has really just executed on everything they said they would and

they're just doing everything so in terms of if we think about all the things that startup needs to do they've built the team someone called them the Avengers of Bitcoin they're like who is the absolute best person in the world to fill that role and then they go out and convince that person to join and that's like for an early stage startup when you have 10 to 15 people you need every single person in that team to be like the best person for that so he's obi's done a great job of that um they also really thought about ux of the app they've just they hide you know the top ux designer um and they've just so they took this really complex protocol and they just made this app which is like beautiful and easy and simple and you just want to

use it um they thought about they go to market and building like high high level Partnerships so they've just been doing like on every front everything right um and I think that goes to sort of the experience of the founders and they had three co-founders and each of them was sort of like just the leading people um so I think that's really been a good lesson in like what to look for in teams and and for their ability to execute I would say something that I've personally learned over the past year is um you know we go through this really really deep diligence process we identify the risks we identify you know the potential challenges with the business every business has obviously a huge amount of risks huge amount of upside and we we're so so thoughtful the

diligence process and then what maybe we didn't have the best process around was we came up with all of these issues with the company and we didn't have that a process to like work with the company on fixing those right away um and I think that's where we can get better of figuring out um we've identified in our diligence process these problems not necessarily problems areas for growth whatever you call them and like being very upfront with the founder like these are the things we want to really work with you on you know once the investment is done from day one so that you have the best opportunity to be successful and get your next round um and often it's easier for people on

the outside to see that than it is for someone who's like kind of front of every day on building a business perfect now one last question from my side before I hand over again to the mails and could you tell me what you wish you had known earlier um that's I think one thing I didn't necessarily that's been a big difference is um between what I was doing at Goldman where we would take principal positions but we would basically hedge them so you would effectively pick p l you know when you executed it and then you would manage the book

and you'd have p l ups and downs over the years but effectively like you do a transaction and it's done whereas in Venture it's like you invest and you don't really know if you're successful for like seven to ten years I mean we get markups and we you know we can see that this company we're getting them to series a quickly all that stuff but I I would say that's definitely one thing which I didn't fully think through when I dove into Venture is like it's a very yeah it's a very long process to really know um if you're successful or not and so we're just figuring out along the way and taking those wins and celebrating and um figuring out how we put in place

benchmarking and all of that but um yes it's definitely definitely different yeah that's a that's a great insight for for kind of everyone out there in this space that's you know also making investment decisions and um so yeah I guess like looking at the past six months and then kind of as we kind of move into the next I mean I guess we're getting close to the next halving and um we're also kind of combating interest rate hikes and so like what are you telling your LPS about kind of the you know current market conditions like do you think that we're gonna be stagnating

for another couple months or I mean Bitcoins had an impressive run since the beginning of the year anyway so I don't even know if you would consider Bitcoin in a you know quote-unquote bear Market but um yeah where do you see Bitcoin go in the next couple months yeah I I think it as a fund I would say we try not to necessarily make investment decisions based on a view of where the Bitcoin price will go we really try and construct a portfolio and invest in companies that we think are building technology that will be useful regardless of where the Bitcoin price is I mean obviously if it goes to zero like it's not useful but um and you know it's a possibility so I

think there's a lot of Dynamics um that could potentially really push the price up a lot and we certainly think that will be the case but I really don't like to speculate I don't get too caught up personally in the Harmony and whether that that drives um drives price um I think it's much more macro I think there'll be like a potentially a next wave of adoption where that comes from um but honestly I don't have anything really great insight to say here so you're kind of like dca'' in with your Equity Investments regardless of uh the the current price of Bitcoin so to speak so

in three to five years wherever Bitcoins are that you're You're Gonna Keep building yeah and we we sort of see that our portfolio companies to an extent are Decor related from the Bitcoin price so it's an investment in the Bitcoin ecosystem um that you know there will be a degree of correlation with the Bitcoin price but also a degree uncorrelated and so as a lot of our investors think about it from a portfolio construction perspective they don't want to just buy Bitcoin um and so they really see this as an interesting investment to sit alongside um their their direct Bitcoin exposure yeah that's a great that's a great Point kind of the the difference is between buying Bitcoin Equity or I mean Equity of companies building the Bitcoin space

or Bitcoin itself um you also mentioned that a lot of your team or some of your team members join conferences from time to time and and learn about who's building on Bitcoins so do you have any conferences in in the next couple months that anyone from ego death will be yet or yeah I'm going to one in Nashville next month which is the big I think the building on Lightning Conference held at Nash at the Bitcoin Park in Nashville um so that's going to be I think there's around 500 people kind of building and lightning that are coming it should be a really great conference um there's bit block boom in Austin which I think I will be at um that's more around mining though uh and then there's a few conferences in in Europe in the fall I'm not sure if and

that's there's also tabconf which is the developer conference which my business partner Nico will be at in I think September and then there's some really great Bitcoin conferences in Europe um there is one in Switzerland actually which I'm not sure if you know about look at it's it's in Lugano um and it's in October Plan B so that's going to be we're just kind of figuring out of someone from Bitcoin from our firm will be there um and I'll also be personally just in Switzerland probably the first two weeks of September um spending some time with really and kind of various other reasons to be in Switzerland foreign

would be great to see you here in Switzerland now I have a few questions from the audience and maybe some there are some new uh other people listening having questions to you please please um put them in the F and a section here um so first question from Elizabeth she wants to know if you invest in Platforms in web 3 platforms um what would you do you define as web 3 platforms like platforms on which someone could token or um I guess I'm not sure what the definition would be I guess anything that's techno like we would invest in anything that's

technology in the Bitcoin ecosystem that's building on one coin or Bitcoin adjacent so in on Noster for instance we've we haven't invested in the master ecosystem that's this kind of decentralized information protocol but we definitely would invest if and when we get comfortable with it um so as long as it's not sort of a token and that's just we have some concerns around sustainability of kind of token issuance if it's a technology company Building Technology in the Bitcoin ecosystem we would definitely consider it and so there's definitely web three applications coming through um and uh Christina has a question asking um if you know any company that can

develop a voting system to use and political elections using blockchain technology so actually one of uh we have someone who's just implemented in the election in Guatemala that happened over the weekend Carlos I'm just pulling up he is let me just see what I can find but he implemented something where basically the actual the voting was was stamped on the Bitcoin blockchain um using timestamps so yes that's a for basically election monitoring um to make sure that there's no like fiddling of election results by the by the government I'm just trying to find

I can send you some information about that later I can't find it right now okay yeah good and then we have Francis here um which is the thing that you've talked a lot about blocked about Bitcoin and asking if you are investing in startups that develop around tokenization not just in crypto and not on lightning um so we we invest in anything in Bitcoin so it doesn't have to be on Lightning it could be on the Bitcoin main chain directly so relay isn't a lightning company um and on tokenization we're not against

tokenization I think we just have a lot of the same concerns honestly that the SEC has that they're basically unregistered Securities there's a you know a huge one-way of information huge not not the right disclosures not the right incentives so in general we're very very if we were to think about token issuances on bitcoin which we definitely see happening potentially in the future um but we really would hold them up to a very high bar in terms of disclosure standards um regulation you know we don't know what that framework will look like yeah absolutely yes I mean from my side these are basically the question I think it's very

very interesting what we have learned from you Andy it was it's really great to have you here I think you have a very clear thesis and a very um also you know well developed approach and um I think we learned a lot from you and it would be great to stay in touch and hopefully we see you when you come this late summer to to Switzerland and maybe I would like to hand over to the malesa for the closing worlds words thank you very much definitely not the very best

thank you Martin and thank you Andy and um yeah so um crypto Valley Association we we do an annual conference as well we just did it about a month ago so maybe next summer uh you know we could be uh able to be honored enough to to welcome you or somebody from ego death and uh you know get get the the viewpoint on bitcoin I I don't I can only think of like less than I can't count the fingers on my hand of Bitcoin only VCS but I think it makes total sense because that is the like you know the the main the main uh crypto I mean it's the the number one cryptocurrency and it's the one that has the the best chance of giving people Financial Freedom and and uh and then and all sorts of other

uh freedoms like with Nostra with information freedom and everything so so very very exciting to hear from you Andy today if people wanted to follow you you know you know follow you on Twitter or get in touch with you what would be the best place for them to you know Reach Out yeah I'm just dropping my email I'm not huge on Twitter I generally retweet things mostly from our portfolio companies um I do occasionally post something or write an article I wrote a big article about nosto um but you can follow me on Twitter at one Andy Pitts and they're number one and then Andy Pitt I just dropped it in and you can also email me Andy eager.capital um dropping it in the chat more than happy to kind of hear from anyone and if you forget all of that that we have a

form submission on our website um which we respond to kind of almost every submission that comes through um so thank you so much for hosting me it's it's been great and I hopefully would love would love to meet you when I'm in Switzerland um later in the summer thank you thank you Auntie thank you demilsa it was great to chat with you and all the very best and have a wonderful summer thanks so much bye bye everyone thank you