Multicoin Capital: The Outsiders

Solana has turned out to be one of my most successful investments, generating a 4,000X return. And yet things I now find normal—dealing with pseudonyms, betting on founders halfway across the world who don’t want to give investors any control—are still baffling to my colleagues who came up during the Web 2.0 boom.

Three focus areas for investment: crypto, fintech, and emerging markets . I expect roughly 50% of investments to be crypto-related.

On the speed and concentration spectrum, Generalist capital sits left of centre and plans to invest in ~20 companies over the next 18 months. Reasons for this approach include : 1. Meaningful Ownership; 2. Maintain an e... See more

By definition, you will likely succeed a vanishingly-small percentage of the time, but—as the saying goes—that’s a feature, not a bug. The point is to venture—fistfuls of money in hand—at the furthest extremes of capitalism, hoping to stumble upon that rare, proper intersection of technology and commerciality.By design, most investments will miss t... See more

On a recent Acquired episode, Multicoin Capital VC Kyle Samani points out why VCs have far greater risk-tolerance to make moonshot bets with tokenized web3 companies than they do with non-tokenized web2 companies: web3 VCs can always sell off the tokens, typically after a vesting period of a year. Where traditional VCs see most of their struggling ... See more

In almost all cases, we’re not particularly interested in incremental improvements. For one, by definition if you’re incrementally improving something that already exists, then a lot of people deeply understand the specific area you’re building in. The degree of difficulty for incrementalism is also meaningfully lower when building with open-source... See more

Summary: If you assume the next 5 years of crypto venture funds produce blended 10x returns, then (based on recent investing volumes) these cohorts of token projects will need to produce an estimated $2T of market cap and over $800B of float would enter markets on a 5-10 year time horizon. This cannot be absorbed by retail; it will require institut... See more

the problem was: there isn’t an easy way for a relatively savvy investor to get the type of market-beating risk-adjusted returns that hedge funds and their clients have access to.

In 2018, trading $40 million in capital, Alameda Research had generated $30 million in profits. Their effective altruist investors took half, leaving behind $15 million. Five million of that was lost to payroll and severance for the departing crowd; another $5 million was lost to expenses. On the remaining $5 million they’d paid taxes, and so, afte

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