The Landscape of Fundraising for Blockchain Companies

Transcript

okay I saw so many people are joining this session today I'm so glad so hopefully we will bring some valuable insights to you from our precious guest Peter and Asim and if you have any questions feel free to ask in the Q a sections well and we try to answer as many questions as possible and I think now it's time to start so welcome everybody my name is yasi I'm the co-chair of crypto value Association start a working group and today our topic is the landscape of fundraising for blockchain companies and I'm so honored to have two guests with

me Peter and Asim so Peter and his full name is Peter saddington and he is founder of stars font and stars found is a strategic growth fund for cryptocurrency mining platforms and D5 web 3 and he's a Serial entrepreneur he founded this 10 billion provincial capital to invest in blockchain iot and he also published three books completed three degrees and trained thousands of people in agile and scrum as a certified scrum trainer and he's also a race car driver and the go-karts that um together with Peter I have asked him

with me Asim Ahmad he is a co-founder a partner at antenna Capital so Asim is a very experienced person in the investment world and antenna capital is a london-based investment management firm investing early stage companies using blockchain technology to disrupt existing business models so Asim has over 10 years experience in the investment industry and is a CFA Charter holder and antenna Capital was formed in 2018 and has established itself as a leading firm with a successful track record and institutional grade Solutions and they have invested many successful

projects like algorand divinity Kraken hedera hashgraph origin and many more so today is a perfect opportunity for you guys for startup Founders here instead of working group to ask questions to our two VC guests okay let's kick start so Peter and Asim is there anything you want to add to my introduction oh I think I'm good thanks so much it's always great to help out yassi same yasi that was perfect thank you okay great now let's start with the first question uh looking back on 2022 so what is your opinion on the fundraising landscape in the blockchain

industry the better is it worse or what type of companies get more traction just what is your general overview and experience well I can Jump Right In I can tell you that the 2022 so we're looking back just last year the market was a little bit tough because of the overall digital currency Market in in a hole since we were going through a bear Market we had a lot of dry powder and a lot of venture capitalists that were kind of sitting on the sidelines wondering should we be investing should we be investing during a bear Market well for me specifically I feel like it is always a good time especially in a bear market so for our Venture fund and I'll just

speak specifically about us our Venture fund we invested in over 20 projects in 2022 and so we believe that some of the best Builders and some of the best operators out there are building during a bear market and the reason is is because there's not as much hype going on we don't have to focus so much on the mainstream meeting the hype cycles of big price action but rather we can get down get dirty put our heads down and build and so while many of the mainstream Venture Capital allocators out there were kind of holding their Capital off to the side and kind of benching their Capital we specifically deployed a lot in 2022 so I think it really depends on the particular thesis and the strategy of a venture fund and

especially if you're looking into Deep Web 3 opportunities so I think it really depends times [Music] from my perspective so it's basically um we um we didn't we didn't slow down where Euro denominated so it's not like we were holding everything in uh in crypto and you know we had less to deploy like you know some funds maybe uh did um we we probably deployed in around 10 15 last year um we always look at the opportunity itself um the valuation is something which you look at in the context of market and also the race but uh an opportunity is either good or bad and you know we take it through our usual due diligence from

that perspective but you know what happened I know a lot of VCS were looking to see who the you know I wouldn't say the winners and loses as many just loses really so they were trying to see which markets get destroyed um and there's certain you know Industries which took more of a hit than others you could say like you know nfts and maybe some of the others took a lot more of a hit than perhaps some of the more infrastructure uh businesses I think um talking a bit more about Trends um you know companies were told to focus a bit more the ones who had raised were told to folks more on um generating Revenue finding product Market fit rather than uh you know growth growth

growth it was a you know because you can't you continue to spend those funding rounds need to be you know uh pushed out a bit further runways need to last a bit longer um so it was a case of um you know Founders you know I'm sure the entrepreneurs out there already know that entrepreneurs need to sweat and you know you really do need to not just uh because you need to run a tight ship but it's also how you run an efficient business um and I think some of the larger companies which perhaps swelled up with a lot of fun and money uh also ended up having a lot of costs and these companies in a bear Market where Revenue dried up or what product Market fit was

never achieved or the ones where you know there was a lot of struggle and they're not always small companies and I think that trend has flowed into this year to the point where even right now we're seeing more funding go towards pre-seed and Seed stage deals versus series a series B for the reasons I mentioned such as you know larger rounds require larger allocations from VCS they also uh are companies which are have a higher cost base and maybe not so much to show for it but backing something precedes seed with less money possibly giving the the company like 18 months Runway um is something which VCS find quite attractive right now I think that will

start changing as the market picks up the bigger the further the longer stage the further stage companies will start generating revenue and start being able to show those longer runways as well and both of you guys mentioned that in the last year you found investing 20 or around 15 different projects can you share with us why do you decide to invest in those kind of projects that where are they located what kind of no in which segment among this industry that they're operating and what is so special about them well I'll jump in first here we invest specifically in one particular thesis

which is continuous yield and that's something that our our hypothesis and our investors and LPS really appreciate and so if you think about anything that's continuous yield it's always going to be either in the staking world the D5 world or the yield platform world and what's great about this is that during the bear Market there's such a focus on getting things operationally tight lowering your risk exposure lowering your Opex or capex you don't need to be doing a lot of marketing right you can lower your Google ads and your in these types of things because there's not a whole lot of money to be spent on this Runway and on these operators and so what's great about our particular thesis is we only invest into companies that are creating yield

Platforms in the defy and web 3 space so that they're constantly creating yield or generating yield during the bear Market many of our investments are Global so they're all over the world I think we've covered about five I think five uh five countries uh five continents I guess or five countries uh uh globally so uh it's there's great operators all over the world that are building in the D5 in the yield platforms and these are the areas that we're looking at and because it has not only multiple multiple revenue streams but they're constantly generating yield and this is something that's really really powerful as we move more into the web three space okay I think I've seen for Eternal Capital maybe you guys have a different

strategy on Direction can you share with us yeah what is your approach yeah yeah so I think to give you a few examples we you know we invested in a dow tooling company based in the UK um the majority of our investments are in the US this company was already generating Revenue I think you know it's good to see certain things like product Market fit um you know 18 months Runway already you know those types of things um you know another company they have a it's called space and time which is a decentralized data warehousing solution the round was led by Microsoft Ventures we joined that round as well um you know there's there's a couple of others there's a one recently which is

in the cyber security space um which is basically it's uh going through the a16z accelerator program I think Kraken bench is also joining us on this round this is one with I don't think it's actually been announced but they've probably announced it this week um so again us-based I think what we find generally is even though we're UK based and you know um around 80 of our deal flow comes from the US uh just because the VCS were connected with it's a global economy now these these people who want to grow through Network effect they can't just be good in U.S they need to be good globally and we help with the Europe side of things um so it doesn't necessarily mean because we're here we we focus just here um and I think that's something that

startups need to know as well as it depends what you're doing really but uh you know if you're building a bank in Europe you know you don't really need to care too much about what someone's doing in the US unless they're coming over but if you're building like a protocol or something really you're competing probably so we we look at the opportunities at a global level with that respect as well but we we don't generally you know have a specific Focus to say us we just find better deal for and high quality there and generally I'd say you know it's it's a case of um good good opportunities will uh always show up whether it's a bearable Market um so the good Founders should always be encouraged to to push on and uh and you

know we that's why we want to continue to deploy in such market conditions because it doesn't mean the opportunities really go away if you're looking for the top quartile and would would evaluation for good quality project be lower in such Market condition or it might not be so because there will be other VCS competing to invest in this high quality project it can vary it can vary quite it really is you know I I wish it was a bit like you know the public markets where everything takes a hit together everything goes up together um but it's hard to find like a market beta um it's really

um it's a bit you know it's it's really a case of how much interest it is in a project um and it's a negotiation um and as we see we just need to look at it from a perspective of how much value how big we think they can be within their target market and what kind of return it can uh it can achieve for us and of course you know we want to ensure the team is remains incentivized while at the same time not being ripped off so it is a bit of a balancing act but there's no one-size-fits all but in it talking more generally yes um people have recognized that you know from a fundamentals perspective your forecasts of Revenue have to you

know become a bit more uh conservative uh just because of the market I thought no one's going to believe you or believe you know what you're doing and from that and that's going to reflect in your valuation in most cases so you do tend to see see it go down but sometimes when you're talking about some high profile deals then you don't really see as much of a discount as perhaps the rest of the market I think in most cases you're going to see valuation I agree with a scene completely I think it really is dependent but what I've been finding is that overall valuations have gone down because there's not as much investment Capital that people want to deploy number one their risk averse because of the bear market conditions that number

two and number three let's be honest digital currency as of recent has taken a big couple hits in the kidney and the face uh with a lot of these FTX Celsius Luna so there's a lot of dry powder that's sitting on the sidelines because they don't know where digital currency is going now if we move into 2023 obviously one of the biggest areas is AI right with chat gbt and these types of things so valuations in that particular Arena are going to be exceptionally High because of the fomo the interest the Intrigue and as well the momentum in mainstream media appeal so if you're doing really great diligence and looking according to your thesis whether it's in

defy or staking or it's in platforming or what have you you're really going to have to look at the operators themselves just I'm going to repeat just what Aseem said do they have good economics right are they looking long term are they being are they are they not spending too much in the wrong areas right are they creating the right amount of Runway this is what we're looking for in great operators during a bear Market do they have the grit do they have the perseverance and are they going to go real skinny during this bear market so that they can come out on the other side as a survivor right well you talk about the last sentence it's very interesting what they come out but the survival during this time after this time would you think for startup Founders maybe it's better that

they preserve what they have prolonged the wrong way and then when the market condition becomes better and then they start their fundraising um exercise would you think or they should start as soon as possible just to get as much as money as possible so that they can extend the wrong way with the current operations level I I think it would be easy for both esteem and I to be able to say it depends but during a bear Market you're not going to find as many opportunities from two perspectives you're not going to find as much money from Venture capitalists private Equity High net worth individuals institutions number one you're not going to find as much during a bear Market because they're waiting to figure out whether you know what the outcome of this bear

Market is going to be and number two when it comes to digital currency in the cryptocurrency and Bitcoin space there's less interest and Intrigue and engagement overall from the retail sector so if you're building a platform for retail retail individuals or customers that are in the retail World they don't have as much money to spend either during a bear market and so spending money as an operator or entrepreneur on ads or community and engagement or these types of things it's probably not the best place to spend money what it really needs to be and this is something that esteem has brought up a couple times here already is product Market fit are you building the right functions are you building the right features are you ensuring that all your time and Engineering capacity is

going to building the best polished functions and features that have the highest amount of value to your customers and hopefully you have some semblance of a community you have some semblance of a feedback loop with individuals and entities that can give you feedback on whether your features and functions are good are they valuable but right now you really want to be conservative with your spend because we don't know how long this bear Market is going to last and we want to make sure that our investments especially as capital allocators that our investment into the operators is going to be worth the time yeah I think if someone's got money waiting to come in sometimes you have to be opportunistic and take it in but if you know if you're talking about the general uh view then just like Peter

said you know if you're talking generally and you're going to start fundraising for now then you you really need to look at your roadmap and think to yourself okay if I get product Market fit then then that could be a good time to raise Capital One because they massively increases your chances and two you'll have to give away less Equity because your valuation will have gone up because you've managed to achieve another obstacle and raise a you know a different stage in your business right so talking about product Market fit um I'm very interested in this topic because uh through my personal experience working with different startups and how do you guys those VCS to evaluate the product Market fit since there are so many new technologies new

Solutions coming out to the market that might never exist in the past so it's completely new so how what are the indicators to show for startups like to show to you guys like hey I achieved product Market feed or there's a chance that my product fits into what the users need um pizza do you want to go or do you want me to go first you can go first I'm just taking notes okay well well I think yasi product Market fit is either achieved or not if you if you say that this is where I think my product fits then it's not been achieved so I think it's it is really binary um either you've done it and and then

um the proof should be evident based on what kind of business you have you'd have clients right you'd have you'd be post Revenue um like what kind of proofs for example and yeah a client or post Revenue I think is is the proof of product Market fit you've got someone who's willing to pay for what you built um I if you're if you're at the point where you're saying um I think this person will buy it then it's it's not been proven yet um and you know you you will need to build to get there of course sometimes you need funding to build to get there so that's where it's a case of you know can you get funding can you bootstrap and that's one of those that's basically what entrepreneurs need to spend about chicken leg problems that's right part right otherwise I

otherwise it's just um you know just like being an employee and having an easy easy life but you know if you want to be an entrepreneur I think that those are the those are the some of the the challenges you need to uh to to go to overcome and I think you know as a VC um whether it's pre-product Market fit or post product Market fit you know um we have to uh believe that the team who's in charge you know from a tech perspective can build what they are saying but then also from a business perspective can whether they have the team now or will be able to hire the right team to basically um to actually grow the business once the tech is in place so when you know we we have to look at the team to ensure

that they can actually execute on the roadmap it's all good having a road map but is your team able to actually achieve the roadmap you know it might be achievable you know by anybody you know by certain people in the world but is your team able to achieve what you've set out or is it just you know just going to be Milestone after Milestone missed so these are some of the things we would assess when looking at it and of course if you achieve product Market fit you're you're basically showing people you can achieve your milestones and that's where it gives people conviction it all often comes back down to the team and conviction in team grows when the team has more to show absolutely uh if you if I'm ever I I Echo assume's comments here if I'm ever

approached by an operator or entrepreneur that says we found product Market fit you probably haven't uh product Market fit is something that is is binary you either have it or you don't now how do we know this well you can validate it through customer trajectory right CAC customer acquisition costs are going down you have Revenue you have a trajectory that is growing at some level I like to use and I always like to use a systems thinker Edwards Deming some of you guys have probably heard about this guy but Edwards Deming had a great quote it goes like this in God we trust everyone else bring data I need data right if you've if you are hitting product Market fit show me the data show me your trajectory of growth

show me the community the users the customers that are giving you feedback that are appreciating and or paying for the product or service that you currently offer are you iterating on it are you inspecting and adapting are you improving it do you have feedback loops that I can see and engage with your customers or community that shows that yes you are appealing to them number one you're iterating and improving the product or feature number two and number three most importantly do you have the data to back it up so once again in God I trust everybody else has to bring data I love this sentence I'm going to probably you already tweeted but I'm going to retweet it

so um I have a follow-up question based on what you know you guys talk about if this um startup can prove product Market fit and also what are the other things that they can bring to a table for example the revenue shows that and the roadmap achieved uh what about the team so in those are some kind of factors that you use to evaluate or startup right what are the other factors you also look into to make your judgment for investment um so um so you know so yeah team uh we look at the technology uh we look at the um Market uh business development side

of things in terms of go to market strategy um we will look at the industry and Market size that you're looking to go into to see if it's a large enough uh opportunity for the type of growth you're looking for and also for us to get involved um we also like to look at where we can get involved and if we can help um to make sure that it's a good fit and also if they can operate in a way that we can work with them um because you know as a VC you know we have objectives because we we're managing other people's money uh so we we have our own fiduciary duties so we need to ensure that we can work with people um in a way that because as a VC you know you can have a you know you you can

you can find like you don't need um many 50 X's you just need your 50x right you don't need every single one in the market you don't need to look at everything and say oh I missed this I missed that you just need yours um so we don't necessarily have to work with everyone and we can be selective so it's a case of uh making sure it's a it's a good fit um we also um like to see um teams who you know this comes a bit back to the team but you know it's saying a good team people you know entrepreneurs might look at and say I'm you know I have a good team you need to have a good Network to basically be able to fundraise and to be able to get clients because especially if you invest in a pre-seed

or seed stage deal where it's going to be your smallest round of funding we need to be able to believe that you have what it takes to raise subsequent rounds of and larger funding rounds in the future um relying on us to you know just do that first stage for you and then you know you raise a five times larger round you know two years from now and then you're looking at us to say you know you do that for us you know that's not how it should work um so you know there's many aspects if we wanted to grind into what is a good team Beyond saying Beyond just having a good idea and being able to build good technology I I will absolutely agree here but I'll take it a level deeper uh for for us the

team is absolutely essential but at the end of the day the number one reason why any entrepreneur fails is when the core operator quits and that's super important when the founder not the co-founders when the core founder quits that's when the startup is dead and so a big part of our interview process before we cut a seed check an early stage check is does this individual have two two P's do they have persistence and do they have perseverance right we need to meet that out and so for me I like to tell this to our LPS is we invest in more 47 year olds than 22 year olds the reason is very simple 47 year olds have Decades of experience in this

particular Market segment they've grown some expertise and if we look at it statistically 47 year olds have a higher chance of succeeding in their market and in their startup because they have the historicity they have the experience they have the knowledge and they have the know-how now it's great to invest in a unicorn 19 year old startup entrepreneur that ends up being the next Mark Zuckerberg I've never met that guy most of our successful Investments are in 36 year olds to 50 year olds and the reason is exactly how I what I just said they have the experience they have the knowledge they have the know-how and they have persisted and persevered in this market for a good long time let's get back to your question though yeah so

you asked about what are some other other metrics that you're looking at for product Market fit and viability of this investment one of the things that we focus heavily on since we're in the web 3 space is community are they engaging with the community are they creating Community are they creating feedback loops with individuals entities or influencers in that community that can help them grow not only from a Grassroots perspective but grow from a feedback and Improvement perspective one of the things that I ask operators early on before we cut a check is tell me about your top three influencers in your community I'd like to interview them if they don't have three influences in the community that they can bring to me so I

can ask them questions hey what do you like about this guy what do you like about this product what do you like about this community if you don't have that I it's hard going to be really hard for me to validate that you have product Market fit because ain't nobody buying your product ain't nobody talking and socializing about your product there's nobody championing championing your product outside yourself and so since we are now in this web 3 world which is solely focused in so many ways on community right because Bitcoin started web3 and it is a digitally native asset it was grown by the friends of Fringe of society grown by internet communities right since we're in this world now it is absolutely

part and parcel that every operator out there at least within our thesis has a community that they're engaging with and they have influencers and or people in that community that are leaders that can tell us more about what that operator is doing and how that Community is receiving it and so this is one of those aesthetic nuances that we look into that I think is super important because the community ends up being an extension of your marketing and in many cases it's free right and the word of mouth marketing actually is the most powerful one you got it yeah we have a question from the audience um the question is is this true okay growth P investor care about other things than gross margins which which in

isolation are meaningless so number one profitability Matrix which eventually translate into FCF generation normalized and beta care packs a bit contribution margin number two how a business can defend this for example IP scale slash cost position Brands thickness especially if profitability is about a typical industry level number three economics of growth I can answer that quick relatively quickly a Benedict Orbin thanks for the question the context of your question is growth PE investors so growth private Equity investors are very different in

their thesis and capital allocation than a venture capitalist traditional venture capitalist right a traditional VC especially when it comes to early stage and Seed we're okay with the ephemeral idea that you think you thought you have and the product Market fit that you think you're going to get right that is the risk that we're able to take on your idea whereas a general traditional private Equity investor already has a substantiated industry that they're good at they know a lot about they're trying to help you get optimized and get to a point of profitability so either they can flip it or grow to the next liquidity moment right and so when you ask the question do they care about things other than gross margins which in isolation are meaningless they actually

care about all these things not that's not to say that V traditional VCS are early stage VCS don't care about this as well but in many cases in early stage Investments we don't have ebitdas we don't have capex and contribution margins and we don't have IPS or we're trying to moat some sort of intellectual property right and so in many cases it's it's apples and oranges but I would say that as a growth private Equity investor you're obviously going to care about normalized ebitda IP scale cost position brand stickiness and economies of growth as well as unit economics those are things that you're going to have to care about if you're in the PE world yeah not really much more to add yeah these are not metrics you look at in

Venture if someone put them into a five-year financial model it's really just garbage in garbage out at that stage because it's it's too early to really uh you know to to uh even decipher any of that but you know defensibility of a business model is important um because you know VC works is probably you know the fastest Pace industry where people will always catch up there's probably several people doing something similar to you so defensibility of your business model having some kind of Cutting Edge some IP and you know looking at the economics of growth of what's driving grow growth for you you know it's all you could say most storytelling rather than substance at this stage versus you know the PE stage agreed okay

and the other question is really related to when is the best time to raise funds is there some seasonal to it in terms of which month of the year or bull markets Bill Market well I'll put it this way it is far easier as we have seen to raise money in a bull market because money is sloshing around everybody wants those big games right there's enough narratives and stories from the mainstream media of these big epic unicorns that are getting overly funded uh and they're in many cases over leveraged as we find out later which is why they fail but it is far easier to raise money in a bull market because funds are sloshing around money right it's everybody's winning

every it's everybody's feeling high and mighty because it's in many cases and I'm sure a scene can agree with this many cases as we've seen from examples of FTX which has kind of opened up the hood is that many investors don't do the diligence during the bull market right they don't look under the hood and they're just momentum investing which hand raised like I'm guilty of it like momentum investing is easy right a16 invested we get an opportunity to be on the cap table I'm gonna do it too right they probably have done their diligence so it's far easier to raise in a bull market than a bear Market however in my experience it's the bear Market Investments that are truly the operators that are really

trying to figure out how can they make product Market fit how can they ensure that they're getting to a revenue stream or getting to a profitability that actually makes sense and is less of the story telling and is less of the shenanigans and actual real functions features that provide value to customers yeah I'd say um yeah this is so much more money in the bull market there's you know even individual investors or you know hedge funds VCS everybody's got more money and there's a lot more Venture funds as well now we've got Less Furniture funds and even those that are here I'd say you know there was a point where people stopped around the FTX maybe maybe for most it was just a couple of weeks for some it was a couple

of months um just to understand what the losers will be understand the ShakeOut and the impact on existing portfolio companies before looking at new portfolio companies um but generally whoever's around you know I'd say take some um you know just be you know just be you should take some comfort in the fact that even in a bear Market the VCS over here they're only here because they believe in the long term of the industry others they shouldn't well it wouldn't be but you know we wouldn't be investing in blockchain full-time dedicating our full uh you know uh work life to this if uh if we didn't think that it's going to be another cycle and another cycle and this is going to turn into something big um so you know it definitely take stock

in that and you know um I think the question shouldn't always be about uh how much you're going to you know when's the best time to raise it should also be about how what will be how will I be more successful and I think um because you raised to be successful you don't raise for the sake of raising it's all about business success and I think the best successes are those that come out to the bear Market where only the serious people are doing it um there's a lot more focus on building and when things pick up you're in the right spot ready if you are you know raised in the last cycle maybe you have enough money to last till

the next one but really you know if you if we focus more on success rather than raising then if you do you know if you manage to build now during the spare Market whether you raise to build or you just build in another way by bootstrapping or any other way or partnering with other people um that's going to be I think I I think I think we're in a very good place I'm very optimistic about the stuff I'm seeing and I think you know if anyone is a startup founder right now I'd say it's time to be excited I think it really is a good time now better than last year so you know we can mourn about the the current you know um Market climate or we can see it as an opportunity

right and also in their Market probably most short-term unless they Founders or the projects that aim at short-term profitability probably they will not have the incentive to build and then the time the ones that they really have a product Market fit they're really passionate about their technology their solutions they are going to build anyway and then if they need fundraising they're going to do it so like I've seen that focus on the success not focusing on try to time the market when to raise fund yeah I really like this absolutely I think there's a lot of bad advice online around hey you need to raise money well my first question is why raising money can actually make things worse because now you have more Cooks in the kitchen

now you have people that are in your ear telling you that you need to worry about X and worry about why and worry about Z that you never thought of before and so sometimes raising you just have to realize that when you raise money from someone now you're going to end up sleeping with them uh you know what I mean you you make your you make your bed and you have to sleep in it with them right so now you have new interested parties who might not care so much about your unit econ economics they might not care about the product Market fit as much as they care about the margins or they care about your growth trajectory in certain areas and so it's really the way that I I don't believe in luck I believe I only believe in probabilities and so for me whenever I'm talking with

an entrepreneurial operator I ask them the question if we give you money is it going to increase the probability of success if so then that's what I want to talk about I don't want to talk about let's raise money because you think it's is it going to increase the probability of this particular success of this particular idea in this particular market right it has to be very tactical and has to be pointed and specific um okay and then okay when it comes to how we see or how you guys think right how you evaluate startups there's another question um from the audience what are the most important points in a pitch deck for the first Contact and what are some red

flags for the first impression I can I can hit that very easily the the most important part of the pitch deck is not the pitch deck the pitch deck isn't as important as the story that I want to hear right as a venture capitalist now I might be overly biased here because I'm a Storyteller and I'm an operator and entrepreneur myself so I'm your usual Trope entrepreneur operator had some success became a venture capitalist not nothing new here but if you can't tell me it's Sensational and amazing and engaging story about why you why now why your product

it's not going to capture my heart I want to be involved not not just cutting you a check I want to be part of your story I when when you're winning I want to be part of that and so the number one thing is not to focus on what's in the deck at least for me what's more important is do you have a succinct powerful story to tell and can you give can you convince me that you are the right person in this moment in time for this idea that in many cases isn't that unique right it's not that new but why you why now why your product you have to be able to bring me into the story so that I can see myself as being

participatory in your success so I care less about what's in the deck especially for early stage Investments right if it's a series b or series C I mean you should have some pretty substantial metrics and and these types of things and and trajectories but for early stage tell me a great story and through your storytelling do you actually know what you're talking about but how about I see some red flags that you see also some some key points that you're looking at yeah so I'd say yeah I think there's enough templates out there what's a good deck you know what we see say should be in a deck I think

what we're really talking about here is how to approach your VC more than just the deck itself and this is where I think you know like how not every projects don't like being compared to others but you say oh are you a bit like this person they're like no no we're not like this I have to differentiate myself to show you why I'm not like them I'm a bit different it's also worth noting that VCS are also different whether we focus on different regions different states different ticket size different types of companies um we you know we see different things in Founders um we have different size teams so we Source deals differently we're based in uh you know our approach to sourcing is different some of third-party Capital some run that are on family office

um it's there is no one-size-fits-all for um when it comes to approach most of the things that hit my um my email my inbox you know has called emails they well pretty much everything gets deleted um and this is because of my Approach um and it works for my firm so you know find we miss out on one person or you know some people's deal but this is approach we take so for me focusing on approach more than the deck I'd say the approach for us is we normally work through more of a referral Network or we meet you at an event and you're at an event because you are also building your network which also is a good sign

because you're going to need that in some shape or form whether it's fundraising or Business Development so it's the interactions at events where you physically meet people and think you know what because this is about the storytelling stuff which Peter said and for me no one can approach me in an email and and give me enough confidence that you know this is a credible person and it's all about credibility so referrals through my VC Network where someone else is validating you to some extent enough for you to be put in front of me so I can then as a VC have to you know validate myself or meet you at an event and I speak to you and I feel this that you know that deepness in the conversation from a technical

perspective okay I I like what you're doing I like how you talk about things how you approach things you can tell very quickly I I can usually tell Adam when I'm meeting someone at a network event in the first five minutes if I'm if I can still speak be speaking to this person an hour from now and still be engaged or if I or if that five minutes is the end and I'll you know I'm likely to be speaking to somebody else after that and I think you just cannot recreate that in a cold email approach and I know this means it's not an easy way to approach it's not it's not easy to approach VCS and this is why you really have to be raising you know six months before you're actually raising

it's because you should really be even maybe 12 months before at least building out that Network speaking to people about your idea testing it perfecting the pitch through the questions people ask you in person building the networks having a few people who validate you okay you know uh you know vouch for what you're what you're building and I think that's when we would like to be approached and then you know when you when you talk about red flags when you you can say when we have people reaching Us in that way um there doesn't tend to be too many red flags because I think they've they've horned their messaging they've been you know people have given them some credibility already and you know you could say we've filtered to some extent

um but you know they could be I think when things are said and not explained uh that's always a bit of a red flag because I think this is a um there's got to be um enough of a uh understanding in in terms of who you're speaking to and what you need to be explaining um to an investor um at the point of uh sharing sharing information and um beyond that you know if we went into any of the red flags we'd be going into very specifics and there's lots of different types of projects um uh but you know you normally red flags come up during DD rather than first approach for me I think that's probably a better way to think of it and

then you know the types of red flags that can that can come up during it could be anything really there's a many aspects which we focus on and we score during the process sounds like a dating experience it it's it's not wrong and we had a question in the Q a from Jens who says can you recommend three to five networking events to get in contact with private equity and Venture Capital investors especially on International scale if in a team basically went into that you have to get out there and you have to practice your communication of your idea I always tell a startup and startup entrepreneurs especially early stage is that your first product is not the

product you think you're building your first product is your story can you tell me a good story and in many cases I'm sure esteem can tell you it can has hundreds of these examples of where you've talked with an operator entrepreneur and the idea is great but they're really crappy at communicating it it's like bro I I get your idea what a great idea but you're just really shitty at communicating this right now and you need to get better and so you need to iterate through your your narrative you have to iterate through the questions that you get and learn how to communicate it more effectively and so in the beginning especially early stage your first product is your selling of your story it's a selling of your narrative it's the selling of the idea

and in many cases you use the word uh speed dating here in many many ways you're selling yourself I I agree 100 with the seam here like when I'm sitting down with operator I could if if I feel like after five minutes there's no way that I would enjoy talking with this guy for another hour hour and a half it ain't gonna go nowhere right and so you really have to work on the relational aspect of your communication you have to work on the aesthetic nuances the the details the specificity of your your narrative and your story and you're really going to have to be able to learn how to unpack some of those ideas that you get questions around so that you can give a full package to an individual or an investor to say this is the story I

am the operator this is the idea this is why now this is why it's important and this is why I need you and your money to participate with me and build building out this dream so when I hear all of that in a really succinct and concise way that's where I get more engaged right on the event side yes you just to quickly add on the event side just you know there's there's a lot of free events lots of blockchain meetups if you're talking specifically about blockchain these free ones and then there's the the big conferences that happen globally you know whether you're talking the consensus the uh you know the ethereum do like East Denver's next week um there's there's lots of these things

I think there was one in Barcelona uh last week in March this part is blockchain week it's so much expensive some are not if someone expensive and you're in that City there's lots of side events many are free um when you're at these events you know just give you a bit a bit more Expo you know how how you can actually Network at the events I think this could be useful as well I think it's worth noting that you know always going straight to the VC thinking it's a case of you know going from A to B is the easiest way to uh operate and being that Direct I I can tell you at these events sometimes investors hang around with other investors because you know we there's not gonna we don't want to queue basically our people pitching to us uh it's it's not you know we're not robots

either and nor does it give you the respect and time you deserve as well that's not it's not it's not always the A to B approaches and all his work sometimes you have to go through a few of the channels you could be speaking to somebody at a you know a desk for coinbase or you know a desk for binance and you could be talking to this person maybe they are someone who could hire you know use your product maybe you're building some kind of tool which does some kind of surveillance and they might want to use it you start speaking to these people and if you're speaking to someone who's a bit of an established business through them you could become the referral whichever to a VC so thinking oh I have to go to these uh

networks I need to go to this network to meet a VC and this is why you need to start 12 months or six months before because that shouldn't be the goal that I'm gonna make a VC friend and he's gonna either do me a favor or or by the end understand me you need to be meeting people people need to be understanding you put you know potential clients and people will become your referrals and and and and you become part of that community and then you know that expands into telegram chats and all sorts of different things which I'm sure Peter knows about right you and there's lots of private groups which you know startups don't tend to get into but certain Founders will in in the future and you know they can also share deals with VCS and there's a lot of ways that

VCS work without the noise and that noise you're just adding to noise uh at an event if you just came and expected to have someone listen to your you know VCS don't go there to uh for Speed Dating with uh startups you could say um so so this I I hope this gives some value in terms of understanding how the longer games played and how the networking is done rather than thinking of it as a very linear yeah and I think I I'm gonna add to that like giving cutting a check to an entrepreneur or operator is a relational consideration at least for me and I and I I can already tell for esteem as well that it there is a relational aspect to The

Cutting of a check and it takes time to build any type of substantial relationship for me one of the most exciting things that I receive is an email months later after someone has connected with me and I said No thanks sir or no thanks ma'am um and nine months later they shoot me another email and they're like bro I went underground I built this thing let me show you what I've done and how I've improved it though for me that is one of the best ways of continuing the relationship with me is not by pinging me and adding to as it seems said here adding to the static because we get inbound like crazy all the time I get easily 15 to 20 emails DMS or some type of inbound per day I get a lot of it

through Twitter and Telegram and those trashy trashy platforms but uh but I get so much inbound that it's just my natural response is no no I don't know you who are you what what is this what is this you know coin Shiba Inu thing that you're put you know sending me like I don't want to invest in another dog coin right I don't have a relational Equity with you I don't know who you are and so you know there needs to be there needs to be proof in the pudding Beyond just engaging with us and showing telling us about your idea continue to to to seek us out for sure but you have to be relational in it you can't you can't be transactional because if you be at least for me if you come in you come at me with a transaction it's

like hey Peter I need your money and this is why it's like well I don't know who you are so you need you need to have the relational aspect as part of it as well um I think this is a very very precious point because many people think oh do you know some VC can I get an email and I even get a phone calls you know from some companies and asked me to refer them to the vs I know and I was like no I'm not going to do that so it's very important for startups to know that you need to build the networks and the trust first before pitching anything before asking for money so this is very important yeah like I seems like so much about the pitch deck it's yeah I was just gonna say yeah see that's

that's a good point uh like I can just say like when if yasi ever shares something with me because we we know each stuff we've noticed it for a few years but I'd have a look specifically because of who it came through so yeah see you can be my filter from that one so everybody you can think her instead of me hey I know some people I don't even know them they just called me all day but but that's but that's what that's what to do that but that's what the team is asking Aseem is asking for you to take the time to get to know them so that he doesn't have to and neither do I so I I love that idea esteem yassi you are going to spend the time building relationships and then you tell us which ones you like yeah I'm going to be the your pipeline

filter we have one more question here uh we have a couple more questions here then we are going to the end of the session is what from Cena what is expected from a precede seed round and web three companies to race because uh she's asking is revenue necessary at this stage because in order to build an ambitious protocol without racing uh it's very difficult right so what traction is needed please give some practical advice so I'm gonna I'm gonna respond to this quickly and my response is not going to be super let's just say super encouraging but it's for me it's a reality we now live in a interconnected decentralized world

where there is a multiplicity of communities who love what you are building trust me what you are building is not new what you are building is most likely a permutation or an unbundling or rebundling of something that's already in existence let's be intellectually honest and so because of this reality that what you're building is not necessarily novel and new it's a permutation or it's a a piece of something that's already in existence there's already individuals who love what you're doing you need to find those people sometimes those people are exceptional engineers guess what if you're going to be building something that's an ambitious

protocol plug into that Community find ambitious Engineers very capable Engineers convince them to do Sweat Equity work on your project your program if you're not an engineer or developer coder so that you can start building out the MVP building Out The infrastructural Runway building out the idea with someone who's passionate about it already and so I I I might sound a little tersed when I say this but we now live in an interconnected world where you actually don't need funding to Begin work on it you need to just find it a passionate engineer that is willing to uh you know with obviously with Equity

uh to be able to begin building your idea with you this is not hard stuff and when operators come to me and say Peter I can't find any Engineers I'm like well then you haven't looked sweetie you have a look bro you haven't looked hard enough like great operators great entrepreneurs are never without resources they just have to be resourceful and so there's everything that you want everything that you want to build out there already is in existence let me go even farther there are operators entrepreneurs who are building what you want to build they're not smarter than you they're not more sophisticated than

you you know what they are they're just more resourceful than you and they started earlier and so frankly I find it to be a weak excuse when people say hey I got this great idea I need funding to get started no you don't you need to be resourceful you need to network you need to find people that can come beside you may become a co-founder and you say hey look I got this idea you like this idea let's put our heads down let's start building it out let's start building out a wireframe or low Fidelity uh wireframes or even infrastructure or even a small light MVP or an alpha this is all possible but it requires you as the operator entrepreneur to do the heavy lifting and to do the hard work to

find these people yeah I would just add that you know um and I think it to some it's probably just rephrasing sorry I put my hand up for some reason um so um probably just rephrasing a lot of what Peter's saying but um best tech doesn't always win as well um you need to be resourceful to basically get the business out there to get the tech out there um so you know it's it's a it's a challenge it like you know you gotta sweat as an entrepreneur if you do if it is 100 necessary for you to get that funding that's a challenge if you've got nothing to show on you and you need ex you know a lot of funding like a lot of layer ones do if you think about the the

successful layer ones the ones that have attracted the most money uh at the outset the profiles of those people you know I'm sure there's someone out there with a much lower profile who could possibly have a new approach to a new a consensus mechanism which hasn't been done before it's completely novel um but it's not you know it's not been successful because it hasn't got the funding like these high profile people have managed to raise but you know business is about success it's not about just having the best tech you you're building the best tech for the success but you're building It ultimately for Success so you know it really is a case of you need to be

resourceful and and find a way and yeah I think this also links into getting some early believers networking early explain to people why why your building should be something they should pack it's not just another layer one another another D5 protocol trying to attract liquidity um so yeah there's no word straight forward answer and I'm sure but even when you asked it you you knew it but I hope there's some insight in there that it is a struggle and that's what it is to be an entrepreneur you have to be resourceful and find a way uh because if you don't then you know there's lots of tech that must have died which would never reached out reached our desk uh because they couldn't find find a way and you know it's also I would also say

I don't want to put VC at the center of the universe there's a lot of stuff that doesn't need to need to reach our desk to be successful you don't even sometimes need funding and and um you know it's it's just a case of finding the the right thing when we're not always the answer and yes we miss out you know uh I'd love to be involved in something successful which I haven't been but uh if you don't always need us then you know um don't make your life more complicated than it needs to be okay thank you thank you great great answer if it was so easy if everybody can get funding and to build their project then everybody can be successful right everybody can be a great entrepreneur

because it's not easy that's why only a few made it um so I have one two last questions then we closed the session for tonight we have a lot of questions so thank you so much for the audience also thank you so much Peter and I've seen for the great answers so what are the current thoughts on games in web free okay uh I used to play video games uh and then I grew up no just kidding uh it's okay to play video games in your 40s and 50s uh but uh video games are gonna be huge in in web 3 I absolutely believe that the tokenization as well as the economies that have been proven out already over the last two decades in

gaming is only going to continue to grow now what what do I mean when I say that well we see for example in World of Warcraft or Diablo or fortnite we see hundreds of millions of dollars in economies uh and marketplaces that are in these games alone now these the gold that you can get in Warcraft and the the V bucks that you can get in fortnite aren't tokenized just yet but they will be and so in terms of games for web 3 it's going to be a huge Arena it's not a place that we play so other than that we don't invest in web 3 gaming I'll let us team take it take a shot at that same

um as much as I used to enjoy and I hope I can start enjoying again when I have more time I do enjoy games um I it's not something which we can judge um and you know all of a sudden just because we've been a blockchain BC since 2018 if gaming took off this year it doesn't mean all of a sudden we can you know reskill ourselves and start investing in games on behalf of our investors it just doesn't make any sense for us now we know there's a lot of gaming funds and uh people focus on gaming in their funds and well you know if someone's creating gaming infrastructure like nft infrastructure or you know D5 infrastructure something like that could be of interest to us but a game itself I cannot judge um the big winners and losers within the

gaming industry is something I think it's still very early to determine I think we've seen a massive boom in nfts and certain things which did well probably will get washed out and never do well again and maybe only the high quality art will exist and a few other pieces I think similarly with all the concepts around gaming no one's ever played me uh played uh paid me to play a game before maybe I'm just not good enough but to for me to all of a sudden start to be paid because we've tokenized the world you know it's still a concept I I don't fully get I think there needs to be some economic value some uh serious understanding of where the revenue uh where the money will flow in before it flows out to someone like me for playing a game uh so I think things need to be

understood I think there will be a lot of testing and I think it's up to entrepreneurs to be the uh to do the experiments and to come up with the wild ideas but as a VC we don't have a firm view on what the winners and losers in that space will be right now and and specific games is something which we just like Peter did not consider okay so that concludes all the questions for this session and thank you so much Peter and Asim for being here sharing those valuable insights is okay we also considered this as a online mini conference so is there a way our audience can get in touch with you start to build a relationship with you guys yep very simply you can find me on

Twitter at agile Peter uh I'm not hard to find online for me uh I'd say a couple of my team members on East Denver so I'm throwing them under the bus so go ahead and uh they'll be going there next week uh I'll be in Dubai as well I eat Dubai and uh otherwise you'll see me at some conferences I think that's the best way if you find a way to get hold of my email um and then you meet me in person after this don't be insulted if I hadn't responded to you because it's just like Pete said it's going to be stuck in a pile so I think you know it's it's like I mentioned for for me and every week is different for me it's all about referrals I think a direct message is it's just too too much noise and uh I

apologize in advance for anyone tries because it's just something which is as a you know I'm not a robot it's just impossible for me to give you the the time and respect your messages they have to catch you in person like I think we met at least three four times in different countries I remember when we met it was pre-covered two or three conferences like in a row it wasn't like we met over the Internet so in in any way was it so even though the space was smaller it was probably easier to do it back then um but even then yeah that's if if you want something meaningful and important then you know you have you have to leave

your house and and start attending put a bit of a time and money into this all right then yeah you guys can try to catch your Sim in different conferences uh Peter will be at agile Peter on Twitter also you can catch Peter in different places I guess I'll be I'll be speaking at I'll be speaking at five conferences this year I already spoke at one in January so I'll be at Bitcoin Miami I'll be at mining disrupt uh there's a Switzerland conference I'm supposed to be at in a Germany conference I'm supposed to be at as well so uh find the best way to find me is on online at agile Peter on Twitter uh you can find out where I'll be speaking at okay thank you so much and also our audience share their gratitudes towards

you guys thank you so much and for the startup startup group working group members uh stay tuned we'll have more upcoming events for you guys planned in this year and join our telegram group and in any case if you have any questions feel free to reach out to me or to crypto value Association to be to Nikki and all these guys who is organizing the backgrounds so have a nice evening morning wherever you're located and let's stay connected bye-bye thank you bye-bye thank you