Debunking Crypto VC Investing 🤓 Investing in crypto as a VC/angel is quite possibly the worst way to "make a quick buck". Starting a project, trading perps, degening onchain, or literally gambling on Shuffle/ Rollbit are probably all better tickets to quick wealth (or ruin, depending on your skill) if that's your thing. You must be driven by something other than a quick buck to do venture investing in crypto. If the numbers are right in the tweet below, this shows you the brutal reality. If you miss a top winner out of 1,000s of deals in the past 3 years you basically fumbled the entire cycle. Even then, unless you sized correctly (e.g. won the right to lead the deal), the allocation may not still be enough for you to even beat holding BTC on your overall portfolio. So why does CT seem to have this misconception that crypto VCs have a license to print money because of "deeply discounted rounds"? This is due to: (1) survivorship bias (2) underpricing of access cost (2) conflation with KOL rounds (3) misconception around hedging (1) Survivorship Bias You only see the projects that get listed at 200x the seed valuation but not the 100s that never even listed before they rugged. I used to be a VC, now I invest as an independent angel. I'm fairly confident my angel portfolio since 2018 falls under top decile of returns in all crypto funds, if not top 1% Even then 87% of all companies I invested in went to 0, or are default 0. Many of these companies I've sunk weeks into helping - that's simply the cost of doing business. And that's within what I'd consider a great portfolio! (2) Cost of Accessing Deal Flow Let's set aside the hit rate for a moment. To even get access to the deals, let alone the right to write a big check, funds literally invest MILLIONS in non-investment related functions. I only was able to access personal angel allocations in good projects after spending 7 years creating 18,000 minutes of free content AND risking my entire career to build one of APAC's first crypto funds in 2018, which gave me a network when everyone left the industry. You need to commit YEARS of prep work to have your first shot on goal, and if you succeed you may have a 15% hit rate or lower. Oh, and you won't know if you're good until 5-10 years later because investments take time to play out. (3) Conflation with KOL rounds So why are so many anons/ CT traders seemingly handed "KOL allocations" that they get to "dump on retails"? CT tend to conflate VC rounds with EXTREMELY PREDATORY KOL rounds. Venture seed rounds have an average lockup of 3-4 years, by which the numbers below may not even be close to accurate. KOL rounds, on the other hand, offer instant unlocks or very short to no vesting. KOL rounds are effectively a deal with the devil - you pay for the social reach of influencers and hand them a ticket to dump on your own community at launch. Look at the highest valued "legit" projects that launched this cycle and you will find that most of their terms are nowhere close to resembling these KOL rounds. Investors are locked for years - not days. (4) Misconception around hedging "Well doesn't matter, VCs are still up big on paper on these investments and can lock in profits by hedging!" This is one of the more common views I see parroted on CT. I know a lot of great VCs I respect, and a lot of horrible ones too - and "systematically hedging VC positions that are up massive" is generally unfeasible. Anyone who earnestly thinks VCs are locking in all the paper gains you see below is not a serious person/ qualified to opine because I can guarantee you they: 1) Have never worked at a proper VC fund 2) Have never read a fund mandate/PPM 3) Have never spoken to an OTC desk about margin requirements of hedging locked tokens in size 4) Have never attempted to hedge locked allocations that are up massive, or 5) Have never made a right investment that is up enough for them to explore 1-4 to begin with -- So all in all, it's not all sunshine and rainbows even for last cycle, but much more so this cycle, in the land of crypto VCs. If you read all the above, and you are reasonably resourceful such that you know you don't NEED to be a VC to make money in crypto, but you somehow STILL want to be one... DM me, I know a few good shops hiring 😄