Following the money...
Something I’ve learned about investment analysis is that it never hurts to follow the money. That said, here is a bit of random, not so random, venture capital research that connects some of the big players in crypto. All things considered, there is a pretty tight group of VC’s and influencers that occupy a large portion of the crypto space currently. One of those being Andreessen Horowitz, a Silicon Valley VC firm with some $2.7B under management, which includes their $300M crypto fund. Some notable companies in their portfolio are Coinbase, MakerDAO, TrustToken (TUSD), Blocktower Capital (who is also invested in TUSD), Dfinity and Polychain Capital. Interestingly enough they also functioned as ‘lead investor’ in some and at times all, of the funding rounds for each of the aforementioned companies.
Now looking even closer it is easy to see just how interconnected the money is, as well as the interests that will surely continue to align moving forward. For instance, AH’s General Partner, Chris Dixon led Coinbase’s $25M series B investment round. This likely helped earn him his seat as a board member at Coinbase. Dixon is additionally a board member at Polychain Capital, which as we know Andreessen Horowitz was a seed round investor in. Most recently AH partnered up with Polychain as Co-Lead investors in the funding round for Compound Labs, another party that joined in was Coinbase Ventures. Compound is said to be an open-source protocol for algorithmic, efficient money markets built on the ethereum platform.
Regarding Coinbase Ventures, that is the VC arm of Coinbase for those who didn’t already know. Also, I think it is important to note that Olaf Carlson-Wee, the CEO & Founder of Polychain Capital, was also Coinbase’s former Head of Risk and additionally their first employee. Furthermore, he maintains an advisory role with 0x protocol. As does Coinbase Co-founder Fred Ehrsam and Joey Krug the Co-Chief investment officer at Pantera Capital who also happens to be the founder of Augur. And in case you’re wondering, Pantera Capital participated in the seed round that funded Polychain Capital and they hold 0x and Augur in their portfolio, among many other notable projects. I could keep going as there is much more regarding just these ties alone but I think that is enough for now.
Simply put, watching where the money flows can help shine a light on certain aspects of growth and development. Of course not all ventures will be successful. Just as not all successful ventures will start with the assistance of big money. Still, I find these ties to be worth paying so attention to at the very least.