Jason Choi Profile picture
Mar 1, 2018 16 tweets 5 min read Twitter logo Read on Twitter
0/ A Brief History of Decentralization in Venture Funding (a thread)
1/ In the early days of venture capital, funding sources were centralized to a few big players with deep pockets handing out checks to entrepreneurs. (e.g. Rockefeller's investment in Fairchild Semiconductor)
2/ In the 60s - 70s, more VC firms emerged as a response to the market's demand for access to outsized returns. Venture capital deployment was gradually decentralized as GPs were entrusted to invest LPs' money in their disparate networks.
3/ In the mid-80s, IPO markets cool down, and less well-performing firms faded out. The 90s tech boom and bust happened, and companies that survived would grow to become the largest in the world.
4/ In the 2 subsequent decades, bigger funds (e.g. @SoftBank) and bigger deals dominated the market. Capital started to look for breakout companies earlier in the deal process due to capital constraints, and to avoid the rigid competition up top.
5/ Seed funds and micro-seed funds place smaller bets across sectors, ecosystems (e.g. @DormRoomFund , @ContraryCapital) and countries (e.g. @500Startups) to diversify against the higher risk of early-stage investing, and to look for the next breakout.
6/ Venture capital deployment became more decentralized as smaller checks found their ways into more ecosystems and geographies, but capital sourcing still came from the big pockets. #Crowdfunding began to change that.
7/ In the late 2000s, the @kickstarter / @Indiegogo crowdfunding model emerged for everyday investors. However, this resembled "pre-ordering with a considerable risk of delivery failure", rather than actual venture investing.
8/ In the early 2010s, JOBS Act Title III was put in place to allow retail investors to invest income into startups for actual equity. Capital sourcing and capital deployment were hence increasingly decentralized across income classes, demographics and regions.
9/ In 2017, #ICOs began to aggressively decentralize venture funding for blockchain startups on all fronts - for better or worse. Mania contributed to rapid returns in cryptoassets and liquidity never before seen in venture capital.
10/ Beyond 2018, as tokenization takes hold and regulatory frameworks are set in place, retail investors will be able invest in tokenized startup equities. We will see more of the VC economics with public market liquidity which @TusharJain_ wrote about.
11/ Attempts to protect unaccredited investors will be put in place, as complex financial instruments around these assets emerge. This is already happening.
12/ In the future, decentralized exchanges (e.g. @0xProject ) may have a small but important role (assuming there is liquidity, as @KyleSamani pointed out before). But in principle, everyone should be able to invest in tokenized equities for startups on a peer-to-peer basis.
13/ Venture funding for early stage projects will hence be radically democratized and decentralized, in capital sourcing, capital deployment, and value exchange - from big checks written by a few industrialists, to investments of all sizes made by everyone globally.
14/ The arc of venture capital is long, and it seems to bend towards decentralization.
15/ Welcoming all other views that poke holes at this macro-hypothesis [fin]

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More from @mrjasonchoi

Aug 23, 2018
Understanding blockchain technical scaling with <20 min videos (a thread) 🤔
0/ If you're having lunch/dinner/on the 🚽, here are some short vids to break down blockchain scaling from the best that you can bookmark.

Some of these vids are highly unappreciated, with ~100 views. Also good at 1.5x speed.
1/ First, a 20-min clear explanation of what the "scalability" challenge actually is by @thatBano:

Read 12 tweets
Aug 5, 2018
Plenty of exciting stuff in crypto in Asia goes overlooked in the US.

Here are some updates this week from #Asia in #crypto amidst a bear market:
From the Philippines 🇵🇭:

SEC is looking to define all tokens as securities by default. Earlier, it also deemed crypto cloud mining contracts as securities. This increases false positives (non-securities deemed as securities).

Source: sec.gov.ph/wp-content/upl…
From Hong Kong 🇭🇰:

A bike-sharing startup has sold its majority stake in exchange for crypto. It will use its tokens to reward renters and promote bike usage. Convincing HK users to use bikes AND set up crypto wallets...hmm 🤔

Read 7 tweets
Jul 25, 2018
Using in-browser wallets (e.g. @metamask_io) may compromise your privacy significantly. /0
Advertisers can profile you as an eth user, and sites on all opened tabs can detect when you unlock your wallet and provide phishing prompt.

Here's a detailed post from @backus of @Bloom a while back on the subject: blog.hellobloom.io/using-an-in-br… /1
So, what can we do?

Using a different browser than your main one for eth transactions through an in-browser wallet (or using another browser profile) is a viable workaround. /2
Read 4 tweets
Jul 24, 2018
How do we stop money-laundering, drug- and terrorism-financing in bitcoin?

Committee responses at the recent Oversight of New Assets in the Digital Age public hearing:
"Trust FinCen to do their jobs." - @JoshFairfield of @wlulaw
"Rely on other law enforcement mechanisms that work around strong cryptography." - @AmberBaldet of @GrowClovyr
Read 8 tweets
Jul 9, 2018
Takeaways from 4 months of interviewing crypto investors (a thread):

Full summary episode: itunes.apple.com/us/podcast/les…
"Providing exposure" alone is not a defensible strategy for funds.

Fund managers have to take care of events with no public market analogues for traditional investors (e.g. custodianship, airdrops, staking, hard forks) too.

- from ep with @HHorsley of @BitwiseInvest
"Perfect" cryptoassets don't exist.

Investors need to bet on assets with local maxima of value and evaluate trade offs between censorship resistance, expressivity, throughput, latency, scalability, governance, privacy etc.

- from ep with @KyleSamani of @multicoincap
Read 12 tweets
Jul 9, 2018
Privacy is a not a good selling point for cryptocurrencies (compared to speed, low fees, security, decentralization etc), because:

1) Most people seem to value convenience over privacy

2) Public tolerance for forfeiting some privacy is high

Payment solutions are sticky.

As long as existing alternatives provide easier user experience (e.g. Venmo, Paypal), educating the public about the importance of fungibility and privacy in crypto won't be enough to promote mass adoption of privacy coins

Privacy is not binary.

Most people understand the value of day-to-day financial privacy from unknown parties (creepy stalkers), but are ok with a recognized company knowing their transaction histories (e.g. private transactions on Venmo). For most, Monero is an overkill.

Read 5 tweets

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