Multicoin Capital: The Outsiders

To drive outsized returns, make concentrated bets. Part of Multicoin’s genius is its willingness to back up its conviction with capital. Many of the firm’s best-performing investments were sized aggressively, contributing to the fund’s outpermance.

The firm has won by taking a contrarian approach. When Multicoin started, the investing landscape was dominated by funds focused on Bitcoin and Ethereum. Founders Kyle Samani and Tushar Jain saw opportunity elsewhere, making contrarian bets on Helium, The Graph, and Solana.

Investing in EOS was a flop…that led to Multicoin’s biggest winner. The firm’s outspoken support for alternative blockchain EOS rubbed some the wrong way. When that project floundered, critics celebrated Multicoin’s mistake. But it was by backing EOS that Multicoin recognized the potential for monster hit, Solana.

A crypto investor active at the time summarized Multicoin’s appeal well: “They were pretty much as smart as everyone else, but their portfolio looked totally different.”

Multicoin has its critics, but founders are extremely positive. In the partisan world of crypto, Multicoin’s strident support of its investments can anger dissenters. Loathed by some as a result, the firm is loved by its entrepreneurs. Portfolio founders are exceptionally positive about Multicoin’s contributions. 

Multicoin may be the highest-returning venture fund of all-time. Firms like Union Square Ventures and Lowercase Capital are legendary for funds with 14x and 76x returns, respectively. Multicoin’s first-ever venture vehicle appears to have them beat.