Charlie: [00:00:00] Welcome to the WT3 podcast. This is the Venture Capital Insights episode. We are focusing today on how to raise capital, attract investors, and demonstrate why is capital utilization. Also, when to raise. Today, with us, we have Jason Fang. Thank you for joining us, Jason. Thanks for having me. A trailblazer in your space in the blockchain realm.
Co founder of Sora Ventures, Asia’s pioneering cryptocurrency backed venture capital firm. Thanks for having me. Under your leadership since 2018 when, just a year after I started in the space sore, invested in key blockchain vested ventures, including Miri and alpha slot, raising 30 million in assets, no mean feat.
You started your blockchain journey in 2016 at Ven Vhi Capital. You played a crucial role in bridging the Ethereum Foundation with the Chinese community. Beyond this, your investment success. You mentor emerging tech talents [00:01:00] at, at the Alchemist Accelerator and Startup Bootcamp. As the CEO of Sora Foundation, Jason drives blockchain community development and education, also serving on the Blockchain Institute Chicago’s board.
We feel that you really, embody the spirit of innovation and blockchain and setting the stage. I mean, we just talked about your schedule. You’re flying, speaking, flying, speaking, flying, speaking, and then back in the space of a month. It’s just incredible. I mean, how did you get started in this space?
Like, what, what was the catalyst for you to, to jump in, in 2018?
Jason: Yeah, no, I, no, I, first of all, you know, I appreciate you guys for having me here. You know, like the, a big part of the industry in general, is a lot of the early days people who got involved. So I got involved in 2015 and the way I got involved, similar to a lot of other investors is they had some kind of like dev or engineering [00:02:00] background.
So I was doing, full stack iOS, just before I, I joined Fimbushi Capital and I also finance degree. Which is kind of quite unique, you know, I basically, if you, anyone goes a finance degree route, you should go straight into banking, you know, and then several years of banking, go straight into MBA.
And then after MBA, you do private equity, like a very standard route, but I ended up doing like basically, startups. And, and I ended up learning how to code, ended up doing a lot of that after I graduated. And that gave me the opportunity to really understand, how blockchain as a whole, functions.
So I knew Bitcoin as early as, 2012, but I didn’t start trading it until I really realized kind of like the benefit, the value that, you know, blockchain is. It’s, it’s kind of like, at that time it was still early. It was, it was basically mostly Bitcoin blockchain. But when I joined the industry and started investing on a professional level, there are some [00:03:00] applications of Ethereum blockchain, and there are some kind ofm, documentation in terms of what Ethereum blockchain could do.
And so you really do need to have a lot of these, you know, deaf background in order to start kind of understand. Why is it even meaningful? Why, what does it mean to be fully decentralized? Like how do blockchain like visually look like, like how does the logic look like, why is it a unique, right?
There’s a lot of these details that without the deaf background or the engineering background, it’ll be really, really hard to get involved with this space. There’s really two types of people in our space. Like one, we, you know, are mostly traders and speculators, and there’s one who are more on a deaf side or more on the tech side or genuinely believe in attack.
No, I like to say I’m more of the other ladder, which is, you know, more into the tech side. And so when I got, you know, recruited to Fimbushi Capital, like was one of their early employees there, was in charge of the U. S. market, which at that time, like 90 percent of the deals at Fimbushi was coming from the U.
- So [00:04:00] I play a relatively crucial role in terms of building their first set of portfolios and Fmbushi. You know, when you did that, you kind of realized that it’s like, you know, there are certain, certain, industry that works really, really well with blockchain. There’s certain industry that don’t work really, really well with blockchain because of just how conserved the industry is.
And so, When I started Soar Adventures, like, one of the things I did was, you know, I, I really aimed for, in my opinion, the low hanging fruit. At a time, we call it entertainment. And entertainment referring to, in today’s world, is really just game fi, NFTs, metaverse, social fi, a lot of those things.
These terms, but back then it was, they’re, they’re basically non existent, right? There’s, so let me just call them entertainment. So it was 60 percent of our fund investment entertainment. Some did really well, some didn’t do so well, but the part of venture investment is you, you know, it’s always the larger wins.
This is when this one deal that gives you a hundred X, that kind of covers a lot of the losses, right? And that’s how venture business works. So in, in this, [00:05:00] in this kind of like environment today, like we’re looking more on You know, we have, we have several funds, you know, but if I’m one was mostly entertainment, which was, you know, 2000, then, 2018, early 2018.
And our second fund now is, which we launched, early last year. That is on something called ordinals, which is basically Bitcoin utility. And that is something that we started investing when no one said no one was investing and that’s, that’s really kind of our thesis here. We, we’re not only investing in early stage startup, but also in investing at early stage, narratives.
And generally in our industry, you, you’re really trying to bet on these early stage narrative. Because the idea here is, the industry moved really, really fast, right? Like Bitcoin utility today is one of the hottest topics around web three. But when we first started investing, it was like, people were doubting on us.
Like people were saying, is this going to be a real thing? You know, historically, everything that had Innovation around Bitcoin end up going to zero, or it led to a bunch of [00:06:00] wars between, you know, miners so on all it was all negative feedback, but regardless I I think there is some credit to, to building a fund that, you know, from 2018 and it’s still alive, it probably means that it’s, it’s not purely just luck, right?
I mean, luck plays a huge part. And I’m more than happy to share some of the stories that I’ve been through. But I think ultimately there is that, that element where it’s like there’s skills involved, there’s experience involved, there’s a visionary part involved, there’s an understanding of what’s technology involved.
There’s an understanding of the user, the industry. The, the dev, all that involved, there’s a lot of components, but a web three, in my opinion, it’s one of the hardest, most difficult industries in the world because, you know, whereas like in private equity, you’re trained to really just focus on one, one industry.
Like for example, you’ll have, you know, you’re, you’re in PE, you’re going to be in real estate, then you specialize in PE real estate. You’ll do relatively well. And Web3 is like, if you’re Web3, you got to know everything. You got to know marketing, you got to know the secondary market, you got to know primary market, you got to know market making, you got to know, [00:07:00] tokenomics.
You got to know, marketing. You got to know community development. You got to know Chinese ecosystem. You got to know the English, the, the, the Western education, Western ecosystem and the culturally very, very different. And so like, it’s, it’s not something that anyone can pick up easily. And that’s, for that reason, like there’s a lot of, you know, You know volatility in this industry because in the world of trading is it’s about like how much you know It’s a difference in knowledge and web3 is one that’s been amplified at a whole new whole new level, right?
And so which means that you know, it’s it’s early it’s very volatility But it also means there’s an opportunity to make money, right? And so this is what really what we’re trying to do is we’re trying to identify things that generally people don’t see and then you know over time It’s the course of several months, you know, the industry pop or the narrative pop.
And that’s when we capture a lot of that alpha. So that is basically my business.
Thomas: It’s, it’s very interesting, Jason, because in a sense, like what you’re doing is de risking in very like, you’ll, You de [00:08:00] risk it by, by getting information. And in a sense, we’re sitting in a similar business, obviously, like we’re doing tech, Charlie is doing like a business ops and marketing.
We’re doing the same thing. We’re, we’re getting as much information upfront of a project in order to de risk it as it grows. So we get the most success out of it. The client gets most certain. It’s not that different for, from your perspective, except like you’re, you’re going on a. Potentially risky early narrative, where, where the payoff can be huge.
But you’re de risking it by getting as much information and perspective as you can in order to, well make it a success, right?
Jason: Yeah, I think it’s, it’s a bit of both, right? So, for example, like when we looked into entertainment, This was like, again, early 2018, our industry was going for a phase of something called ICO initial currency offering to something called STO.
Yeah, exactly. Right. And then there was a [00:09:00] correction in the ICO. And then a lot of people would say, what’s the next big thing? And it was some people were saying it’s the STOs. The security token offering,
Thomas: especially
Jason: in Asia. That was like the biggest thing after ICO, like all the VCs were betting on STOs, everyone was like, this is going to be the next big thing.
Right. It’s like, it makes a lot of sense. Right. You think about it, it’s like. Blockchain was always meant to kind of disrupt the traditional finance, but and so like when they saw like it was disrupting something and then now it went to traditional finance and that that that CEO narrative made a lot of sense, right?
But, you know, being in Fibushi and being working, I guess, worked in and seeing a lot of things, even at that time, it was only like, you know, two or three years. It did feel like it was. Like, you know, five, six years, I’ve seen a lot right in the sense that, you know, I have a pretty good understanding of what is a backward, step, what is a forward step.
Right. And, you know, the one thing we did not touch was STO where everyone was talking about STO. We’re looking at something called NFTs at the time was called 721s, ERC721s. And we were looking into, gaming of [00:10:00] 721s. Like at that time, it was, really very much like on chain gaming. There was not a lot of volume.
And in fact, at a time, a lot of our investors were saying like, Hey, why are you investing in NFT? Like it’s literally less liquid on NFT, like OpenSea compared to like the STO market. Like you should be going for STOs. I’m like, No, I feel like SDO, in my opinion, it’s like a step backwards. I don’t think that actually makes a lot of sense, right?
At least not now. Right. I mean, you know, worked at Fimbushi and it was like a lot of investments that we did, we had to do a FinTech blockchain element with a finance element. And it was like, it didn’t work out because it was a struggle, right? It was, it wasn’t just the fact that you need to be a really good entrepreneur and being able to sell your product and be really good at innovating product.
It was also the fact that your customers were willing to take this risk. Right. And. The world of finance is incredibly conservative and it’s incredibly hard to penetrate because there’s all these rules I’ve set up already, right? So it’s like really, really difficult. And, you know, eventually STO didn’t work out, but then, you know, the NFT [00:11:00] part worked out really well for us.
Just to give you like some, some, some idea of like how, Diversify our NFT portfolios that we did was it wasn’t just gaming. Cause we didn’t know what NFT was going to be. Right. We, we knew NFT itself was going to be innovation, but we didn’t know like if entity was going to be like, just pure gaming. So we invested in things like NFT emojis, like, Oh, really?
Yeah. That’s great. The most random, the most random thing, right? Every emoji is an NFT and you can, you can put a string of emojis together and that’s one NFTs. Yeah, and and then we invested in companies that did like NFT for artists and then we did like NFT, at the centralized peer to peer network using NFTs, a bunch of stuff, right?
So, and the gaming, of course, gaming, and it’s like, it became very obvious, like, you know, like at one point after a couple years that, okay, NFT was, you know, Gearing towards more of the game by stuff like a lot of gaming stuff, metaverse stuff, right? But initially like [00:12:00] knew no one like knew what what entity was gonna be right?
It was all this means that’s happening And so, you know like fast forward to today and last year when we when we looked in the Bitcoin we were like We also have some like understanding that this would be big because you know Bitcoin, you know had a value at which is You could you could If you move any NFT from Ethereum to Bitcoin, you know, in that case, we call, we call them ORNLs, then every digital art on Bitcoin will hold all the properties of a blockchain.
Whereas like, if you’re, if you, any NFTs and, you know, previously, it’s, it’s all basically stored in either a centralized server or a decentralized server like IPFS. Right. So it’s like, it’s, it’s a string. It’s basically a string talking, like that leads to the, the, the, the asset. Right. So it’s like, it’s half baked.
Right. And, and so when, when we saw orinals, it’s like, at least I’m digital arts that we’re like, Hey, this is quite interesting. Right. And then those slowly after a couple of months, there was the discovery of a BRC 20. [00:13:00] Which is like an enabling basically the fungible token off of Bitcoin assets. And then after that, it was just, it blew up, you know, it got listed on Binance and the rest is just basically a lot of new innovation around the coin layer one, a lot of people go into Bitcoin layer two, it’s a lot of this stuff happening, right?
So. Our fund went from, you know, 25%, as a mandate to invest in Bitcoin just a year ago, to now telling our investors like, Hey, we’re going to invest 7 percent of our asset into Bitcoin because we’ve built the momentum. We feel that the industry is mature enough for us to be investing in that category.
But the most important part is that, you know, a lot of, a lot of the audience, in the Bitcoin world today kind of recognize as one of the leaders and, and, and being Very, very upfront about our value investing, about what we like about Bitcoin, what we don’t like about Bitcoin, why we like it, why we don’t like it.
So it’s not just like, Hey, reinvest in the entire ecosystem around Bitcoin, but we’re also very, very picky about what we invest and why we were very picky about that. So like, it’s important as a fund manager, you’re not only just [00:14:00] fumbling because people are excited about stuff, but you also have to be rational.
You also have to be logical. Right. You also have to be, not shortsighted, right? You gotta be, you gotta be, be, be visionary in terms of like, you’re betting on this because you feel that that’s going to be value created on the Bitcoin blockchain. So like, these are things that we feel very, very strongly as a fund manager.
Charlie: I mean, this is, this is what we’re hoping to, to sort of harness some of that visionary. Peace for our, for our listeners, for our viewers to say, essentially say, it’s like, what is it you’re looking for? What was you’re going to say, Thomas?
Thomas: No, I was, I was saying like, it’s a, it’s a thin line you’re walking.
I can imagine. I mean, and to your point, like, you know, I think our listeners, like here, just probably they’re like, holy shit, Jason is probably a superhero. But, and, and what I mean by that, because it’s a very thin line. You, you gotta do, like, as you said before, you need to know everything about everything.
Making the right decision at the right time. I can imagine that there’s a lot of one stress involved and you’re not always [00:15:00] making the right decisions. Right? Like, I, I assume that there’s, there’s moments that you’re like, shit, I could have done this differently. Yeah. Or, yeah. I, I actually, the FOMO in when people, like, when, when this, this started happening, like, and, and, and the other way I think, oh, I, I went in and this is where I lost capital.
Right. I think there, I, I assume there’s those moments too. That’s the dark side of the superhero, I guess.
Jason: We wereh, very, I guess our fund is not big, right? Our fund too is only 50 million, which is like small compared to a lot of larger funds in the U. S., but there’s benefit for being a small fund. Small funds also mean that you’re catching early narrative.
You’re looking for things that have, you know, 50 X return, 100 X return, whereas larger funds, they don’t really care too much about the 100 X return. They want, for example, you invest in 10 million USD into a deal. If it flipped two X, it’s still 10 million. Right. But for us, when we invest, we’re putting in like 250 K 500 K check size.
At most, we’re probably putting 3 million [00:16:00] into, into a deal. We’re expecting like a 10 X return. Right. Right. So even a 10x at 3 million, it’s only 30 million, which is, you know, it’s, it’s comparable to, you know, like it’s different product refer, it means that you have different strategies, but for us, because we’re a small, it also means that we, we got to be very smart about like where we capture alpha.
And when we initially, when we, when we did our fun, it was 25 percent Bitcoin and a 25 percent decentralized science, which is another thing that is like relatively new. I’m not sure if you’ve heard of it. The short term is called the side. Right. But the, the, the narrative is that it came out from the fair foundation.
Vitalik is actually one of the guys who really has been pushing the side. We, we managed to invest in one of the, second company from Brian Armstrong, which is basically focused on the side, it’s, you know, the, the idea of the side is basically, leveraging a lot of the Ethereum applications that have been built in the past, like NFTs, DeFi,m, a lot of DAOs and then applying that into the world of science and research.
And, [00:17:00] and that was a narrative that we were extremely excited about, but all of these two narrative, it was very obvious that we capture majority of our wins on, on, and momentum on Bitcoin. And then quickly decide to like, okay, well, if this is the case, then we should probably pivot mostly on, on Bitcoin because it makes a lot of sense.
Right. If, if you found moment you have found the pace and you’re found your position in the industry. You just go for it, right? Whereas most people say, Hey, you shouldn’t put everything in your, in your own in one basket. I would probably say like Web3 is one of those things that you’re already in consider to be a high risk product.
And look, the history of Web3 Bull Market, they always capture one narrative. It doesn’t capture most of it. If Bitcoin price goes up, everything will go up, right? But there’s just always this one specific category that always like gets a hundred x return. Like for example. The early days of ICO. Right? A hundred x like crazy.
The early days of Defi. Mm-Hmm. Right. A hundred x like crazy. The early days of NFTs a hundred hundred x like crazy. You, you meant it like the early days NFTs, right? Like four A. You you’ve been [00:18:00] retired right now. Right. So it’s like a lot of these things that in our industry is like, it, it, it’s always targeting this one new narrative and it’s, it’s never the same narrative twice.
And so like when we looked at this, we’re like, okay, well, we’ll pick up a lot of momentum on Bitcoin. Let’s double down on Bitcoin, right? And D side might be a, D side might come in later, but at least like, you know, for this current product, you know, Fund 2, we think it makes a lot of sense to be investing in, in, in, in, in Bitcoin Oreos.
And then maybe from Fund 3, we’ll, we’ll double down more on D side. Like these are some of the strategies I think. A lot of fund managers, when they start, it’s like, okay, the mandate is 25, 25, 25, 25. But for us, it’s like, when we realized that there’s something that’s bigger than that, we should definitely pivot and then should kind of like focus on one thing that actually makes sense.
Thomas: It’s, it’s a product market fit for, for the fund. Like, Very, very specific. I, yeah, very specific for sure. Yeah. And, and I, I mean that’s, that’s probably also why, why it works like it works, right. At at least for, yeah, for, for, for soa. So, yeah. [00:19:00] And that’s great. I mean, you know, I, we, we and our podcast talk a lot about product market fit over different industries, and it’s one of those things that are always very important for most of our guests.
Found it right. You as well. Like, okay, what, but what is, what are key key factors, for startups that you’re looking at, for product market fit, like how, how can they validate their product market fit in, in these markets and in these narratives? Right. Because as you said, like. Every, every bull, the narrative is different.
And I don’t think that, every startup should follow a bull narrative because obviously they want to grow past the bull, but how do you look at, and how do you validate product market fit with these startups, that you’re looking at to invest, for instance,
Jason: Yeah, so, you know, if you’re web two entrepreneur, like a lot of times your product market fit comes from the user experience and the user base, right?
You want to grow your, your, your, your user base, but actually in web three, you don’t need to actually [00:20:00] grow that. You’re your user base. You want to grow your community and token holders, which is a very different from the users. The users are the people use your product. The token holders are the people who want to speculate your product.
Yeah. Right? And so again, the best way to look at this is, you know, in any market in web three, you should always be focusing on the community first and a product second, and people will probably argue differently, which is like, especially in web two, if you come from a web two perspective, you’re always like product is number one, and the marketing is number two.
And Web3 is very, very different and Web3 because the, the, all the a hundred X, a thousand X projects that actually do well, it’s not because they built a really good product. It’s because they’ve raised so much money. They have a lot of cash in hand. And you know, they’re listed on Binance. They’re listed on OKX.
They’re listed on all the topic changes. They have so much, much, so much money to burn. They’re able to pivot and find that product market fit later on. The majority actually, I’ll probably argue like 99 percent of our investments. [00:21:00] Have all been through that phase where it’s like if you actually did well and you’re able to build something today It’s not because you decide to do that on day one It’s always because you pivoted halfway in and then because you list on binance You have so much cash now that you focus on building products that actually make sense If you actually just raise money to rate to to build product majority of the time you’re kind of screwed because you’ll realize it’s like Like you build this product, but like no one knows about you, right?
You build this one product, but like no one’s using you guys. Like there’s so much distraction that’s happening in our space. There’s so much, like many things happening in our space. Like people have opportunity costs, right? Most people in our industry, even today are not here for utility. They’re here for the speculation.
Like I think the ratio, I think Metallic a couple of years ago, like just five years ago, he would probably say it’s like, Utility is like 1%, 99 percent is speculation. Now, I think it’s definitely like utility has grown up a lot, but even those utility are, are driving forces to speculate. So it’s like, no, D5 for example, it’s like they’re using the D5 [00:22:00] products, but it’s like to make money, right?
Gaming products. Yes. They use a product, but it’s there to make money. Right. The to earn model. It’s like, they’re, you know, like step in, they they’re running, but then they’re running to make money. Right. It’s like everything that we do is ultimately boils down to making money. Right. And so fundamentally that means like in web three, it’s always going to be speculation, it’s always going to be a token holders that that comes number one, and then your utility that come number two, right?
So that’s a logic that’s like fundamentally very different from like web two versus web three. And people don’t understand. I know you have a lot of web two, entrepreneurs to come into this space and not degen enough. They don’t understand this concept. It’s the rates, a bunch of money to end up building this product.
And then they spend zero on marketing. They spend zero on community development. And they spend zero on like. Talking to you to the community and they spend zero of even identifying that picking up on what’s hot and the marking in the market, then a lot of times they’re basically screwed. So, so it’s important for us to even invest in, in, in, in, in, in [00:23:00] entrepreneurs who are sharp in the space who understand the space.
And when the time comes, they pivot. Some of the best deals that we’ve done in our space are not the ones who start off with like doing this one thing and then they end up actually doing the one thing, even Binance, for example, like when Binance came out to do their ICO, they, you know, CC came out on stage and pitching, like telling people, like what Binance is going to be, what BNB is going to be.
Like half of the stuff that they’ve, they’ve, they’ve done in the BNB, it’s like, has totally irrelevant to what’s happening in today. Right. Totally irrelevant. Right. The only thing that’s actually actually made sense was the exchange business. Right. Similarly with most of our investments, like some of them started us doing like pure, pure real estate and then end up doing pure, pure artists.
And it was the NFT boom that basically made 30, 50 X for them. Right. So it’s like a lot of these things that we realize is that like, you know, You know, investing in the team is way more important than investing in the product. And that is something that’s like fundamentally very different from, from web two and web three.
And so when you’re looking for a product market [00:24:00] fit, you shouldn’t be looking from a user perspective. A user is also important, but you know, depending majority of the product, again, majority of product in this industry is all driven by your token. Token holders, like how many tokens you have, how big your community, if you have a larger community, then a lot of times you means you’re also listed on top exchanges, exchanges, what these community training, they’re your token.
And only then can you convert a portion of that, into your, your, your, your product, which, you know, end up being a lot of utility. Of course, there are exceptions to that, to that statement, which is like, for example, I
Charlie: was going to ask Jason, just, just to dip in here, what would you say are the key KPIs that you’re looking for?
Like if, if they’ve got. XYZ like they’ve got great in web two times great cost per acquisition great conversion on the website You you you’re happy to put more ad spend in in this in essence Like one of the kpis you’re looking for for product market fit. Like if you see that green light, what’s the next thing?
Jason: To be honest, there’s a lot of wash like there’s a lot of [00:25:00] like fake data in our industry That is like pretty easy to produce. Yeah, so I I generally feel that In In the Web 2 world, like KPIs is actually a really important metric, right? Like you, for example, you go to YC, they will always ask for like, at least you need to have like, you know, 100K or 10K user base, right?
So you’re going to hit a certain amount of users in order to even get money from, you know, accelerators. But the whole idea here is, in Web 3, it’s totally different. It’s totally different because you can spend money to get users. For example, you can just buy users on, you can buy followers. You can buy, engagement.
You can also buy, users in the sense that, you create a earning model, for example, like step in, right? You, you get people to run, you get people to do something, they earn the token, and then in the process, like you create users, like, is that a KPI that you think is worth, because they hit like 100k or 500k downloads.
Is [00:26:00] that something that you think is worth investing? In my opinion, in the Web3 world, a lot of people say yes. I’m sorry, in the Web2 world, a lot of people will say yes, but in the Web3 world, it really depends. Right. So, I wouldn’t, I, whereas I love to answer a question where it’s like, are there specific metrics for KPI?
I’ll probably say that it’s, it’s probably more of other things. Like, is it, what, what narrative are you in? Right? Like, if, for example, if you’re in the Bitcoin narrative today, you’re incredibly hot and probably going to get a lot of money from investors. Whereas if you’re like. If you’re in the, let’s say, something that’s not hot today’s market, like STO, like you want to do like an STO today in today’s market, you’re unlikely going to get any, any, any users, even though if you have KPIs, right, even though you have like really good KPIs, you’re unlikely going to get any user base.
And the reason for that is because you’re, you’re betting into something that is not hot. And this is actually quite similar in the, in the web two space as well, [00:27:00] which is like. Web2 money is a lot slower. It’s a lot easier to predict. For example, like in 2011, it was kind of the edtech error, right? So like, you know people if you did the edtech in 2011, you could have got easily gotten money from Silicon Valley and nowadays It’s like it’s like AI, right?
It’s healthcare. It’s it’s web3, right? It’s like there’s always a trend and the larger that narrative the longer it takes right but in web3 it’s It’s like really, really fast. It’s like a, a, a, a, a, a web two narrative, but everything on Sarah was, it was like, everything was a lot faster, like four times more faster.
So, you know, it. If you go for one narrative that’s hot you probably have like, you know, one or two years to really fundraise so the idea here is you know I think going for the right narrative is more important than going for the right kpis now once you hit that, you know Narrative and it really depends on like who your investors are Uh how legit your team is how like I said, like how many holders you have like how how big your community is Yes, some of them will always have [00:28:00] some fake elements, you know to it You most of them will probably Have like fake element to it, but you know, our industry is like mostly about like fake until you make it But big part of that is that’s that’s our industry and so yes, it is it is why it’s very hard as a vc to be making money in this industry for most vc, right?
There’s only going to be a handful of really good vcs that will end up making money for their investors A majority of the vcs don’t even make money, right? So for example We have friends who are running funds. Majority of the funds are not that great as an investment. And so we try to be the outlier, right?
So if what we’ve learned is that you’ve, if your friends are all the larger funds, they’re not making money, then by copying them, you’re mostly not going to make money as well. So it’s, it’s very important for us to like, innovate and like, as a fund, it’s like, Tell your investors, it’s like, yeah, we’re not a general, like, we’re not a generalist fund.
Like, so, so if you invest in us, it’s like, you’re not going to have exposure to a bit of everything. Right. Cause all the other funds out there is a bit of everything. And the end result is that they’re not doing so, so great. Right. So, but [00:29:00] we’re a special niche product where it’s like, if you want Bitcoin exposure, that’s us.
If you don’t want Bitcoin exposure, that’s not us. Right. There’s hundreds of funds out there that you can invest. You don’t have to invest in us. Right. So,
Charlie: Interesting because you’re, you’re like looking at competitive analysis for, for your fund. I mean, when, when you’re looking at an investment, what, what do you focus on when you’re in evaluating a competitive landscape for a web three project?
Yeah. Is, is when you’re looking at that, do you say, okay, you’re, you’re a new entrant into a space that’s been around for four years. There are some incumbents, but they’re bigger and slower, however they’ve got a bigger community. And the following, like how do you sort of evaluate that landscape when you’re looking at a Web3 project?
Jason: Yeah. I think the most important thing here is. Regardless of, what you’re investing, there needs to be, again, you don’t want to be investing when the market is, is, is formal and it’s incredibly hot. [00:30:00] Well, most people will be able to, Hey, it’s hot. That’s why I want to invest as a VC fund. We do the opposite, right?
So it’s like when people, if things are like, for example, like the last bull market, while everyone was investing, we were exiting. And then when, when people were like struggling and like figuring out like, Oh shit, like It’s Bitcoin going to 12k and 9k, that’s when we start investing. That’s when we started investing.
So, because during the bear market, a lot of the entrepreneurs will, will, will have like the real entrepreneurs will come out and the market will naturally filter these, these, these entrepreneurs. And so, and so your entrepreneur raising in the bear market, it shows you have balls, right. And like that, in our opinion, it’s already like a competitive edge.
People will not agree. Like people will be like, Hey, you shouldn’t fundraise in the, in bear market, I can tell you that if you fundraise in a bear market and web three It means you have balls and a lot of investors really like that. Yeah. At least I will invest more aggressively in the bear market because of that.
Right. Other things, especially in the bull market, the bull market, [00:31:00] I’m like, I’m very conservative in the bull market. I think bull market, it’s like whenever everyone is investing, I’m doing post management surveys. And once there’s a peak, I exit. Right. So it’s like, we always do the opposite, right?
And when people are not investing in that cat narrative, like no one’s investing in Bitcoin, we’re investing in Bitcoin, right? When people are not investing in like entertainment, they’re like, we went for STOs, we’re investing in entertainment, right? So, so I, I, again, I’m not saying that you should do things at the opposite, right?
I mean, people are selling to buy. But there is a lot of logic to why, like the things that we invest, right? I can be, and that all has to do with timing. So, whereas again, web two, there’s a very, very clear framework to like, what are some of your KPIs, what are some competitive edges. In, in web two, in web three, because you know, a lot of times it has to do with timing, it has to do with narrative, it has to do with, your, your resources, but resources can be filled in quite easily with, with the right investors.
Like, for [00:32:00] example, we invested in, in what we call Bitcoin layer one, like, one of them is called tap protocol. Because of us, like, you know, we’ve basically got them to integrate with a lot of changes. We have brought in really good communities to build on top of their equal system because we have gotten a lot of, you know, value out that we can add to the equal system.
Right? And these are things that these are people we’ve worked with a long time that these are resources that we know could could add value to both parties. And so a part of my job is, Is allocating a lot of these, resources among each other. So for example, we have 30 plus portfolio companies in that they call layer one space, a lot of them will actually end up working together.
And if they don’t end up working together, we can make the intro and they end up talking to each other and then they end up doing something together. Right. So that’s a benefit where it’s like, even though I said company by itself, it doesn’t have like a lot of competitive edge, but just because you’re working with the right investors, you’re able to kind of fill in the gap for a lot of these things.
And so that is quite awesome. [00:33:00] So,
Thomas: so how important is team in that matter? Because like, you know, when we’re talking about competitive analysis, like we team is team is number two team. Exactly.
Jason: Yeah.
Thomas: So because team composition is from our side, like when we look, when we started a project, when it comes to development, right, like we’re, we’re a development consultancy.
Well, we looked first. It’s like, Hey, is this team actually capable of, of. Okay. We can build it with them or for them, but are they actually capable of, of understanding what needs to be built, how it needs to be built, how they need to, envision the next steps, right? Like for us having a good CTO or having an, an very good non tech CEO that understands what he doesn’t know is really important for us because that, that’s why we say, okay, we measure that.
When it comes to success, that’s, that’s a big measurement for us from a development side, but, you know, I’m very curious about your, your pieces when it comes to team composition, in, in, [00:34:00] in projects that you’re looking at the companies that you’re, you’re investing in, like you say, it’s, it’s number two.
What are the things that you are looking at, in a team and what kind of competences, you’re looking at for different roles, maybe even.
Jason: Yeah. Yeah. So team is number two, because I think timing is number one. If, if you have the strongest team ever, but the market is going down, it’s going down nonstop.
Bitcoin is going down. Everyone’s going to crash. Like you’re all coin, we’ll, we’ll crash as well. Like, that’s just like the fact, right. So it’s like, unfortunately, right. The, the, some of the best teams are, like I said, right. The sharpest people who are, they have have some, you know, they’re like in the thirties, forties, ideally the thirties, thirties are usually the best in my opinion, because they, they, they’ve already seen, they’re not like as, as, as new and, green as a lot of the early entrepreneurs, like they’ve done several.
Startups before the start companies before so they have a very good fundamental understanding of like company like building [00:35:00] companies and they’re also like that also has a a tech technical or engineering background so that maybe they don’t go anymore But then they have a very good understanding of the technology of the innovation around blockchain that’s really really important because some of the best ceos.
I would probably say if they’re very very technical usually they’re also like the world’s fair. Like if they’re very technical, then it also means that you’re, you’re not very BD focused. You don’t have a very strong business sense. Right. No, the world is so fair in that sense. It’s just like very, very technical.
Like they suck at BD. You’re really, really good at BD. You suck at tech. Right.
So some of the best, you know, entrepreneurs is about finding the middle ground. Like the CEO, you gotta be good at both. Right. You’re not. Extremely expert, like you’re not specialized on either side, but then you understand both of them. In my opinion, that’s like the best. And then you have a CTO who’s just like all the way to like the technical [00:36:00] side.
Right. It doesn’t even need to meet any, any of your investors. Right. And then the rest of the basement, every,
Thomas: every now and then say, hi, it’s like, yeah, my son, what is that? Okay. He
Jason: goes, he goes offline for three days and he come back. So, you know, like, Hey, I’m back guys. I got this new update. Yeah, let’s let’s let’s like let’s let’s let’s let’s do something about it and let’s test it out, right?
It’s like yeah, like like that in my opinion is is the best. And then of course, I think The ceo in my opinion needs to uh needs to have really good experience in terms of working with third parties So like for exchanges, um investors, I mean one of the most important like, um parties in our industry is the exchanges you know, Yeah, the exchanges, unfortunately, they’re, they’re like the most important component in our industry.
And so like, if you get, if you get exchanges like you, then they’ll, they’ll, they’ll list you. But if not, then, that is going to be a lot harder, a lot more work for the investors. The other part [00:37:00] that we’re seeing, like, very interesting right now is like, The, the exchanges also like to, to, to find, find, like to, to basically work with, entrepreneurs who, who are flexible, a sense of flexible referred to like, you know, they might, they might want to like, Hey, can we adjust some of your tokenomics?
Can we adjust some of your vestings? You know, you might have CEOs as like, you know, Very, very firm and like, very, like, does not want to be flexible. Like, like that’s, there’s a lot of CEOs are like that, right? They’re like, Hey, we can’t do that. We could, then, then they lose the opportunity. Right. I mean, exchanges can, they have hundreds of deals, thousands of deals each day.
They don’t have to list you. They can list anything. They’ll probably be a win for them anyways. Right. So it’s like, then you just be left alone. So it’s also important to invest in, entrepreneurs and CEOs who are flexible and they’re willing to work with, with, with things like what’s, what’s, what’s out there, right.
Utilizing your resources, your resources and your opportunity. Like that’s really important. Like part of being sharp is part of [00:38:00] understanding that there’s an opportunity to be captured. And that opportunity might be your next a hundred X and those who see it versus those who just ignore it. Huge difference.
Charlie: Yeah.
Jason: Okay.
Charlie: Yeah. In terms of web three, obviously this is, this is why both myself and Thomas are in the space. It’s like an incredibly fast industry. In the early stages, so we’re talking the kind of, checks that you cut, what is it that Web3 startups in the early stages have to have in their pitch text for aid for you to be interested, but also to demonstrate that growth and scalability potential to investors like yourself.
And, and to add to that, like, are there any sort of milestones that indicate traction that you’re looking for, where you’re like, this is interesting?
Jason: I think there is, obviously in Web 3 are very, very different. In Web 2, I’ll probably say like somewhere around like, you know, a hundred K to start. Or, you know, some people will say, well, depending on the accelerator, right?
[00:39:00] But, you know, generally you want a hundred K. Users, but in Web3, because the onboarding process is a lot more complex, you know, it also depends on what you’re doing for, except for example, if you’re doing a a 10 K NFT project, you’re looking like 10 K. Within a 10 K NFT project. You’re looking, generally looking around like 4,000 to 5,000.
That’s like the sweet spot. So you have like 4, 000 users, right? If you’re looking at like more of like a, a, a product, like a general web free product that has fungible tokens, the address you, you want usually want is somewhere between like, you know, like 10 K to, to, to, to 20 K ideally. Some will have, some might have, you know, like 4k, 5k, because they’re listed and all the tokens are all like all the holders all put kind of like put their, tokens in one address, like for example, exchange address.
It’ll show like you 4K, 5K, but if like realistically there was like no exchanges at all, then they all kind of like separated and all distributed, then you’re looking at somewhere like 10 K to 20 K. Yeah. That’s like, that’s like the, [00:40:00] the level where you start talking to like VCs in general. So
Charlie: that’s starting point,
Jason: that’s a starting point, right?
That’s a starting point. Yeah. If you have like a couple hundred, if, if
Charlie: you,
Jason: if you have a couple hundred, it’s not, it’s not good enough.
Charlie: Okay. If, if you’ve raised already, let’s say you’ve raised like half a mil to a million. And then you’re on your way to hopefully in, in web two terms, becoming a scale up what, what, what kind of traction are you looking for that?
Jason: Yeah. So, you’re in a race already. Actually, to be honest, it’s like most of these numbers won’t even show up. Up until like you actually complete all the race because the whole idea of web three is that you raise a bunch of money Your token is not listed yet. So your token is not even distributed yet, right?
So you know, there’s there’s not going to be a metric where it’s like, you know Like let’s see how many token holders you guys have first and then we’ll we’ll we’ll pitch in or put in the money, right? It’s usually the other way around first where it’s just like You raise that money first and then and [00:41:00] then you had the token issue reach and was like we call it cge, right?
Token generation event. Yeah, so, um realistically, so that’s The number for that we’re referring to. What I mean by, you know, 10 K to 20 K, it’s really realistically when you’re talking to like exchanges, right? It’s like you, you, you, you start talking to exchanges, then you, they like, Hey, how many address you want?
I mean, from an exchange perspective, they always want more, like the, more the merrier, right? So some of them have, like, if you hit like, you know, the, the a hundred K mark, then you’re like really, really good. You hit like the 500 K mark, like 500 K address. That’s like really, really, really good, right? So it’s like, these are like some of the metrics, but like to entry, it’s like, you know, like probably like 10 K to 20 K, right?
Like from a VC perspective, it’s, it’s slightly different. Like I said, like the VC perspective, we look at other metrics, right? We look at. Things like the team, the tokenomics, the tokenomics is really important too. It’s like, tokenomics is, is one is like your [00:42:00] understanding of the narrative and the industry, like where we are, we’re at, like, for example, you don’t want to be giving your tokens, to your investors during that, during the bear market, you get your tokens to the bear market.
You’re gonna get a pretty wrecked, right? So,
Thomas: and it happens, it does happen all
Jason: the time. It happens all the time, right? Like, in, in 2018, like everyone, like the investors got all their tokens in like mid 2018, mid like thousand 19, they all got wrecked,
Charlie: right? Yeah, yeah. You’re investment hard way.
Jason: Yeah, yeah, exactly.
So you asked me like, what are some of the metrics and how can we tell that if this entrepreneur experience or not? You look at a token omics, right? You look at tokens, they’re able to identify like, what’s a good time to be giving, investors? Investors eventually will have to exit. It’s either now or like later down the road.
You might as well put a time that it’s like the market is full, right? So like like these are things that it’s incredibly important for us as investors to identify if [00:43:00] this is worth investing or not the second time like things are like you’re investing how long is investing right and If your narrative is about launching
Charlie: Yeah, like your narrative is Of the tokens versus your equity piece or or when when you actually put money in.
Yeah.
Jason: Yeah. Yeah, so um These are all things that we look at from a Metro perspective, like other things, like, like I said, with users, followers, you know, some people come up to me and be like, Hey, Jason, we’re incredibly interested in, you know, working with you guys. And look, our Twitter account has 200K followers.
When I look at it, I could, I immediately know that there are, a lot of the, the Twitters are bots or like they’re, they’re, they’re bought. Like they went with a third party platform. That is pumping followers in or getting people, there’s like events going on and doing giveaway nonstop. And so like there’s people engaging on it, but.
Is that a good metric? I mean, like, if you’re pitching to like, like, like [00:44:00] web three investors who just got into this space or new to this space, they’ll be like, Oh man, this is amazing. Like, we should totally invest. Right. But, and I’ve been in this space long enough. So I know like, this is, this is not like something that can get me excited because you know, if I want to do that, I can, I can do the same.
I could hire a third party company and a marketing company. This is what I pay them to do. I don’t know, I’ll get them 10 K every month or 20 K every month. And their job is just to make sure that my account is, is growing and, and getting a log engagement, whatever I post. So it’ll be a 10 x or whatever.
It’s, it’s, it’s out there. Right? Like versus like if, if we didn’t use the marketing company and they only need to do this for like, maybe five months or six months because in this period of time they’re using that, that that golden period to fundraise. So a lot of investors fall for that. It’s like, this is why I feel like.
I don’t, I don’t necessarily, suggest founders, you know, spending too much money on it, it’ll work, it’ll work. Sometimes like depends on, on who you’re talking, like the type of investors you’re talking to too. Right. But, people will do it [00:45:00] regardless. And I think for most investors, for most project, if everyone’s doing it, you can, I don’t, I don’t suggest, you know, pumping too much money into this, but I think, you know, put in a, it’s like a small amount that it’s not like zero, right.
You know, I will probably say like a Twitter account. Generally that I looked at, the amount that I like is somewhere about like 10 K to 20 K, 30 K. And in my opinion, an eight. 20K to like 80K, there’s not, not much of a difference. And I can easily just spend like five minutes scrolling through a lot of stuff from, from, and I can have a pretty good, like, if you look at the comments too, it’s a pretty good understanding.
And then you click on the users, right? The, the quality of users is to do like a couple of times and you, you immediately know if these are real or not, right. You immediately know. So, so, you know, spend some money on marketing, but don’t do it. Like don’t overkill it. You overkill it. Then. You the, the ones, the the VCs who do know what’s up, right?
They’ll be like, like, why are you doing this? Like, are you trying to scam my money? Or something like that. You’re making it too intentional, [00:46:00] right? And that actually raise a red flag, right? So, so qua
Thomas: quality over quality for that, for that point, right? Yeah. Oh,
Jason: for sure. For
Charlie: sure, for sure. Yeah, for sure. How significant is, so this is the last piece on contraption metrics, really like how significant if you are, if you are evaluating.
Hey company. So, and then, you know, percentage wise, just for practicality. So how significant is user adoption versus that community engagement piece? So like we’ve got, you know, 20, 000 people on our disco, 15, 000 people on our Twitter. We’ve got five to 10 K users versus partnerships. So we’re teed up to work with say Polygon or someone like this.
How, how, like what, when you’re looking at a company, how important, and it’s really essentially defining where our founders are, our viewers should spend their time, is it going to conferences and trying to try to drum up partnerships? Is it really diving into the community and answering every single question they have [00:47:00] on your product?
Or is it trying to build your social proof?
Jason: So my, my word of advice is always fundraise, spend the money so you get listed on a good exchange. Don’t spend all your money on building products because building product is, is, I mean, there’s a saying is that you’re never done. You’re you’ll never, you’ll never, never, never be done coding, right?
You’ll never be done like building. If you’re a developer by background, you’re always like, there’s always improvement. There’s always. Things that can be built on top of your existing code base So there’s like a never ending job basically and so if you just keep spending money you can basically call for 10 years Like non stop if until you basically run out of money, right?
So you shouldn’t be spending like 100 percent of your time Not, I would probably argue not even like, you know, 70 percent of your, of your, of your budget into coding and building product. I think if you’re spending a fair good amount of time so that you get the attention of the community, attention of, of, of the audience, attention of [00:48:00] the exchanges, I think that’s, that’s important in our space, specifically in Web3.
Right. And, and the idea here is like, why do I think, it doesn’t, there’s no point of overkilling and putting your, your Twitter account 200k because, it just, it’s just, you do it too much. Then people will understand that you’re just here. You’re very short term, right? You’re just, it’s too obvious.
Thomas: Yeah. Yeah.
Jason: Yeah. It’s too obvious. So, you want to find that balance. And I think that balance is usually like 20k, 30k. I think that’s pretty good. If you, if you do over that, then it just means you’re, you’re, you’re, you’re, you’re, you’re BD, you’re, you’re BD is like 80 percent or 90%, which in my opinion, it means that you’re never going to build a product.
And once you get listed, you’re going to dump your own token. And then we’re going to get ragged. Like our investors are going to get ragged. So that transit is really, you asked me like, what are some of the best teams and best, best entrepreneurs I looked at? It’s like. It’s definitely not the a hundred percent beating team.
It’s definitely not the a hundred percent tech team. It’s like a balance. Right. And the same thing, you can kind of identify [00:49:00] that through this, how they engage and built their Twitter account. Yeah, so it’s really interesting. It’s like, people don’t realize that it’s like your Twitter account. The way you build it is a really good, it’s a really, really good.H,, I guess a for like, it is kind of like a foreshadow how you wanna build your, your, your, your, your, your token and your, your, your, when you get listed after tge because, you know, if, if you’re really strong on BD then you know, you, you’re definitely gonna have a lot of shill. You’re gonna have a lot of, you know, partnerships.
But even these partnerships can be really shady. Like you remember the early, early days in 2017 and thousand 16 Connect. Big connect, right? , I, I wanna say like big connect, you know this like the early days of Ethere right? It’s like there was a Chinese Ethere there was Japanese Ethereum. You remember the Chinese Ethereum was like, yeah, it was Neo and, and
Thomas: oh and yeah, and right.
It was like,
Jason: and Neo, oh
Thomas: man, it was early there
Jason: and then, and it was so relieved. I [00:50:00] lost my
Charlie: shirt on Neo. I did, I on Neo and that that. Yeah, that took a little bit off off the back that
Jason: did That was the funniest thing ever. It’s like, neo was like they made an announcement It didn’t look good. It’s really smart.
I mean like the people who are like showing a neo it’s insane, right?
Thomas: Yeah,
Jason: they said they were they said like neo was working on the chinese government or something like that. Yes That was the narrative.
Thomas: Yes. Yes. Yes This is the skyrocket to like like 80 bucks 90 bucks or something because I I know at some point I got out You Like, but it went to 150, 150.
Yeah.
Charlie: Yeah. So I, I, I jumped at 70 cause there, there was that announcement Jason just mentioned and it went to like one 50 and then it just tanked to like 70.
Thomas: Yeah. I
Charlie: mean, this is a great transition to the next question and I, I’m going to push the narrative long, so I’m mindful of everyone’s time. So in, in terms of a fundraising strategy, so we would gearing [00:51:00] here to try and give our viewers as much value as possible, like try and, you know, De mystify this industry for them.
Should you share some insights on an, like an effective fundraising strategy? Like when is it optimal to raise funds? What, what should they aim to achieve before even thinking about trying to talk to someone like yourself, like initiating a funding round, like what’s, what’s the way around this? Like what’s the best slickest way you’ve seen someone just coming into the room and just being like, okay, we’ve done all this stuff.
You just, you’re like, shut up, take my money. And this might be
Thomas: a very hot question because at least from, from the clients that I’ve been working with, we hear this very, very often, like how, how do, how do we like raise, like strategically the best, right? And they’re asking a development consultancy. I’m like, well, you should probably talk to somebody who knows more about this.
So this is a really like a hot piece that, that we definitely now with, I think, a bull or coming bull, I think that’s a piece where, you know, we’re Yeah, [00:52:00] people really like to know this. That’s beautiful. YouTube, you know, arch.
Jason: Yeah. No, no. I mean, that’s a great question. I think the, the answer is there’s, I, I kind of break down three parts, right?
It’s, it’s, first of all, it’s the timing part, which is like, in any fundraising, it all boils down to timing, of, of like, you know, like if the bull market, then obviously you fundraise the bear market, then you obviously try to avoid fundraise. But that’s why I say like, I, I really, but then there’s also the argument, which is like.
Like I, like I mentioned, I really like entrepreneurs who are fundraising during the bear market because it shows it at balls. Right. But again, this is like for the general public. This is like for the average Joe, right? If they, if they just want to fundraise, like, definitely fundraising in the bull market.
This is a majority, like you, you remember like FTX with their fundraiser in the bear market. But then of course, like. Like FTX is like a next level. And so like they have, they don’t care about if it’s bull market or bear market. They just do whatever they think it’s right because [00:53:00] they have a lot of substance.
Right. But most entrepreneurs in this space will not have that level of substance to begin with. And so generally the idea here is, and you will see that, that trend, very, very, very obvious, which is during the bull market. Some of the very mediocre entrepreneurs will come in and start fundraising like crazy.
Yeah, that’s a timing is important. The second part is the narrative. Right. Which is for example, like, like, like, like I said, right, right now, Bitcoin is hot. Like, so Bitcoin people are doing Bitcoin layer two, Bitcoin layer one. Like these are some of the hottest thing in the industry. Like some of the layer twos are worth like, you know, a billion in validation before you’ve been listing, right?
Restaking is hot. No, all that stuff is hot because, there’s the, there’s the added layer and the narrative that people can benchmark against. And so like, there’s always going to be money that your people are going to be chasing because the narrative is hot. And so that’s really important. It’s like, even if you don’t end up doing something that is within this narrative, start with that narrative and then pivot later.
Thomas: Yeah, right.
Jason: Yeah, [00:54:00]
Thomas: right.
Jason: Yes, exactly. And the third part here, which I think is really important, is that, when, when you’re, when you’re talking to, h, you know, when you’re, when you’re, when you’re talking to a lot of exchanges, always make sure that there’s a room for you guys to, to give some advantage to the exchanges, exchanges, regardless, I’ll be very honest.
It’s like, regardless, if you’re talking to them early or you’re talking to the late at the end of the day, and you end up listening to the topic changes. They’re going to take a slice out of it. They’re going to take some like some shady ass deal. I don’t admit like, you know what I’m saying? Right.
It’s like, I’ll just allocate X amount on that early so that you can take, you can give exchanges that early discount or whatever they want. Right. So,
Thomas: and it’s, it’s always, to that point, I think there’s, it’s always, at least from, from what I’ve seen, it’s always a bigger chunk than you think it will be, a
Jason: hundred percent, right?
A hundred percent. Like that, that is a very
Thomas: important [00:55:00] thing to mention because people like, Oh yeah, no, it’s like. It’s like 500 grand. It’s like, well, that might be more. It might also be less. It depends on the exchange. It depends on, on, but it’s always more than you think. So allocate more and reserve more than you think.
Right?
Jason: Yes. Yes. So, so these are kind of the three points that I think it’s important when, when, when it comes to fundraising is like, you always have to allocate a bit more than, than you want. You know, because exchanges might cut, might, might, might, might, Might want some discount. And if they’re not going to get discount from the venture side, they’re going to get discount when you, when you listen, they change.
So at the end of the day is you’re still going to give exchanges that, that benefit. It’s just like a thing in their industry, right? A lot of people like are very like stubborn about it. Like, you know, they don’t want to do that, but it’s like, And if you don’t do that, then other people will just not work with you.
So you might as well just be prepared to give out a bit more to exchanges rather than, you know, investors, like regular investors.
Charlie: I mean, this, this topic segues perfectly into the next question, which [00:56:00] is, which has been asked by our viewers is, basically your tokenomics, like how important at the front end when you’re raising, are your tokenomics, the utility of the tokens?
In the valuation of Web3 projects, what are some of the common pitfalls? Like if you see a tokenomics model and it causes a red flag and it causes everyone to run for the hills, like what are those things that people should avoid, how can we add value to the space and say, like, guys, just, this is the, at least the direction of travel you want to be traveling in when you’re.
Thinking about, tokenomics and then, and then further, like, how do you evaluate those models? Like, do you actually go deep into the numbers? Is it, this makes sense? I’ve seen this before. Yeah. I mean, I know suddenly when I was working in finance, it was, this makes sense. We’ve seen this before, but I’m going to throw analysts at it and make sure, right?
Yeah. And Web3, because of the pace, I just don’t think that’s, that’s feasible every single time. So it’s, there’s got [00:57:00] to be some general trends where you’re like, okay, Here’s a marker that shows this person’s thought about it. They know what they’re talking about. They’ve had, they have at least some business sense in terms of being able to put together a spreadsheet that actually functions like, what are you, what are you looking for in that?
Yep. No, great question.
Jason: So there, there’s. There’s no fixed framework around tokenomics. Tokenomics is actually the third most important on my list. So, like I said, timing’s number one. The timing also kind of, you know, slash narrative. That’s number one. Two is the team. And the third is tokenomics. And you’ll be surprised, the last one is actually product.
Product is the least important, yeah.
Thomas: Well, it makes sense in this list, honestly, because if you have a great product, but the rest is garbage thing, it doesn’t matter how great your product is because actually your product will be garbage. There’s no scale.
Charlie: That’s what we say, you could have the best products in the world, [00:58:00] but if, if, if it’s come out of the wrong, the wrong time and nobody knows about it.
It doesn’t matter. It’s just a great product that no one uses.
Jason: Yeah. Yeah. I mean, I think the point here is, you know, a lot of people think important product is important, but it is important. But, I think the point here is do not be discouraged if your product is not popular and like, do not be discouraged if there’s no users using your product.
That’s the point. So in that sense, like product is not important in the sense that if you’re, if you’re people are not using your, your product, then you can always pivot. And you can do something else, right? That’s the point here, and which is very common in Web3. But going back to your question about tokenomics, I think there’s, there’s, there’s a couple things I think we look at when it, it, it, when it, when it talks about, like, tokenomics.
Like, one is, Like I’ve mentioned before, like, do they, are they actually offering clear tokenomics when we invest because a lot of projects, don’t even have tokenomics when we invest. And this is also a very common thing in our industry, which is like, [00:59:00] they’re doing an equity plus token warrant raise.
And then they just don’t have the tokenomics figured out. The question is, in what situation? Do we, is that acceptable? And in my opinion, anything with a valuation lower than 30 mil, that’s interesting.
Charlie: Interesting. Yeah. Yeah. Okay. And this is, this is post seed. So they’ve already raised a bit. First, this is like
Jason: the first round or first one and a half round, like anything below 30 million, I get.
Anything below 30 million because right now if you look at majority of things that’s happening right now in our industry Everything starts at like 70 million 80 million 100 million. So again, i’m referring to this current time I mean, obviously the bear market then we might be going for like anything below 50 million, right?
um every different times call for different metrics, right, but the whole point here is Uh referring to the benchmark in in today’s world. Then anything below 30 million we can accept with no tokenomics Because in our opinion, that is, it just means that they’re early. And by having a, when [01:00:00] you’re early to point that you don’t have tokenomics, it having tokenomics actually puts you in a spot where you can’t, you can’t, you’ll be stuck because the whole point of tokenomics is that you want to be as close.
Your tokenomics should be as close as to TGE as possible. If you’re designing a tokenomic that does not work with the time you launch, that’s going to be an issue. And that’s basically the risk here, right? So a lot of people have like tokenomics and then. They launch within a year and then they realize it’s like shit like that doesn’t even work out So they end up changing tokenomics.
You’ve seen that a lot in the past, right?
Thomas: Yeah. Yeah
Jason: Or just went go for it and then investors get wrecked. We’ve often seen a lot of that in the past, right? So the idea here is from an entrepreneur perspective is like it’s okay to not have tokenomics If you’re a super, super early, but okay. So the question now is when should you have tokenomics, right?
So I think anything above like 30 million, 50 million, you should have tokenomics. Yes, exactly. You should have very clear, [01:01:00] understanding of when you TGE, you should have like, how many, if you had any cliff, do you have any, like what’s your best thing? What’s your lockup? What’s your distribution? It’s a monthly basis, daily base.
How’d you achieve all this? Like, is it done through airdrop or do the user have to mint it? If they minted, do they, do they, if they’re not, they don’t, they don’t mint it. There’s a state automatically, like stuff like that. Right. And that also,
Thomas: would that also include like the utility economics behind like the token, like how it’s being used in, in, in the platform, all these kinds of things that you want to see that too.
Yes. Right.
Jason: So that part of, of the utility on the tokenomics, we usually. Leave it out until even closer to TGE.
Thomas: Yeah.
Jason: So the way it works is like, you always figure out the distribution for investors first. And then once you have that, I mean, usually it’s like. There’s, there’s like, for example, you have like a portion for, for investors, you have a portion for community, you have a portion for the actual product and the actual product side.
Like we will work with them after [01:02:00] we invest, like a lot of times they don’t even have too much clarity on how that works. And so it’s really, really,
Thomas: really, really hard to, and challenging to, to build. A good utility, tokenomics, at least from like, we’ve worked with. There’s not many people out there that can actually do it.
You need to have a finance background. You need to understand how I’d say today’s world works, both in web two or web three, depending on where you’re, where you’re launching it, right?
Jason: Utility token is by far one of the hardest things to do. That’s why people love meme tokens.
Thomas: Oh, yes.
Jason: Meme coins are the best, right?
Because you have no roadmap, you have nothing, you have no expectation. There’s, there’s, there’s, there’s only upside. There’s pure speculation. Yeah. Yeah. And pure speculation.
Thomas: So, so Jason, to that point, because like, You know, I think that there’s, there’s two things that are really important. Like one is tokenomics.
I think the other part is utility. And then I think people sometimes mix that up. Right. And, and I, [01:03:00] I know I’ve done it in the past as well. And I think it’s really important to look at tokenomics. Like, as you said, before TGE and then the utility of, of the tokenomics comes kind of after, yeah. But I think the hardest, like, how do you ensure that skills?
Because so if we’re looking at like. So far, we’re talking about a lot about timing and narrative, right? And every time there is a different narrative, every, let’s say, three, four years, there’s a different bull, different narrative, right? Having tokenomics scaling towards that narrative or towards what is, what is important, or where it’s going to be important is really hard.
So at some point, you, you will need to diverge from the narrative and the timing where you say, okay, well, but this is, this is our utility. This is our perspective that we believe in is going to be. Doing well for our users, et cetera. It’s like, there, there is a, there’s a critical point. And I think it’s a really hard point to find, right.
As somebody, not
Jason: really, not really. Like, I think a lot of people care is find it hard because they’re not able to drop the web to [01:04:00] mindset. So I, like I said, if you build a product while figuring out, like, Building your your token market cap and everything. It’s gonna be tough. It’s gonna be really tough But if you just focus on one thing and then once you get listed and then you focus on building like integrating a product into your Token, you’ll be a lot better like so much better.
Like I’ll give you example, right? So, you know, we We we invest in this project and then initially when they were looking to launch a token they want to do gaming, and then, and that was like initially the gaming element and then after a while they realized like, oh, gaming is not a large enough narrative to get money.
So then they have, they have to build on, they want to build like a layer two, like, like their own, basically their own blockchain, right. And then where they can scale a lot of gaming products on top of it. Right. And so that of itself, like, again, if you, if you. Same same topic which is token utility But if you apply the gaming [01:05:00] token into that if you apply the token into that actual game There’s no way like there will be worth billions today, right?
Thomas: Yeah,
Jason: the exact same thing. Same team, same token, utility is if they actually apply that token into the entire network because people can build on top of that network, then the token becomes like a mega city, right? And it becomes much more valuable. A narrative expands. And so in this, in this situation, no, we’ve told them like, Hey, look, it’s actually okay to not have utility in your token because you haven’t found your product fit yet.
So just focus on building that narrative first, like focus on building, like, you know, the, the market cap, if you need to focus on building a narrative first, and then after you build a narrative, then focus on launching the biggest narrative for your token. Right. Which is in my opinion, is your own blockchain.
Right. And that’s, that’s what we’ve seen in this industry, which is like, if you are able to build your own blockchain, like, that’s why I’m so bullish on Bitcoin layer one, because all the Bitcoin layer ones are [01:06:00] essentially the Solana, the near avalanche, everything on Bitcoin. Right. Whereas like these side chains are, they’re competing with like, they’re basically competing with a lot of shit coin tokens at blockchains.
Right. Which you need. So much money, like you need so much money to, to, to, to compete with each other. You’re basically like an EVM, and like your, your own EVM and you have to build everything from scratch. But if you’re building on Bitcoin narrative, it’s like, it’s non existent. It’s like. It’s a low hanging fruit.
Like there’s, it’s, it’s entirely new. And it’s like basically the old, like the early days of Ethere right? There’s Ethereum and there’s a bunch of like protocols out there. Like you’re, you’re basically in a market where it’s like, it’s, you have a benchmark and then there’s all these stuff that’s happening under that.
And it’s a Bitcoin layer two is competitive because you’re in that you’re basically competing with like all the Ethereum like blockchains out there, which is a market that’s been around for like, what, [01:07:00] since 2017. But, but Bitcoin, it’s entirely, Bitcoin is entirely new. It’s like, it’s just like, they just, we just discover Ethereum and now let’s try to do something like let’s do a fork of Ethereum and then do something new.
It’s like, so again, reproducing the avalanche, reproducing the near reproducing the Solana, reproducing the things that, that have occurred today into this industry, but. Benchmarking on something, which is in this case, we’re benchmarking to Bitcoin.
Thomas: So, to that example, I think that’s really interesting. So, let’s say, you know, the narrative is chosen, the timing is set, you know, like, in this case, a blockchain bull, tokenomics is set up.
We have now raised. Where, where are those, where should those proceeds go, right? Like, what is the use of all that cash that we just raised? Like, let’s say that we, the valuation is above 30 million. So we have great utility. Where are we going to go? We don’t have a product yet, right? Like, how do, how do we, how do we [01:08:00] distribute those proceeds?
Where, where are we, we are strategically throwing money at? We already talked a little bit about it. You know, you said like product last, so how, how does that look from a percentage perspective? Is it marketing 60%, you know, What is your perspective on this?
Jason: Yeah, it depends on the market. It was like bull market.
I’ll probably say spend a bit more on our marketing. It was bear market. I’ll probably say, say, spend zero on marketing.
Thomas: That’s like zero completely. Not just somewhere. Where does that money go then? Does it go to a product or
Jason: Any marketing you do during a bear market, it’s going to be completely wasted.
Thomas: Yeah, I tend, I tend to agree, but where does that money go then? So let’s say, I think we have two good examples, right? So let’s maybe start with, with, with the bear market. So, okay. Bear market, no marketing. So where, where does the money, like we raised in a bear market successfully, which is crazy. Super happy.
What are we going to do now? Not spending it on marketing. That’s one.
Jason: Yeah, so [01:09:00] if there’s two ways to do it, right? If you have, you’re in the bear market, you should be spending your money either in R& D or product development.
Thomas: And by R& D, what do you mean by R& D?
Jason: Like R& D as opposed to like, like, like, for example, you know, a lot, like a lot of companies are like spending their money on building infrastructure, or researching around infrastructure, right?
So, not necessarily spending all the money on developing the infrastructure, but spending the money to research and to figure out what the narrative. So, more building, like, Like the decks, like the, the content, like the white paper, the, the stuff that you can like, the full market comes, then you can like show this to investors and raise a bunch of money.
Right. So like that type of stuff is much more, in my opinion, much more important, like there are these, right. Then the product development, but if you already have a product, then you can obviously innovate on top of your product. Right. Like for example, like during the FTX, you know, [01:10:00] FTX actually did build a really incredible product that solve a lot of, you know, the funds issues with the OTC and all that stuff.
Right. So it’s like, then you can innovate on that. But again, the whole point here is they were smart about it too, because, You know, during the bear market, they were also spending some time on R and D and they decided to launch FTT, right? Yeah, same thing with our, some of our portfolio companies that did really, really well.
It’s like they were, they were investing a lot of R and D into, pivoting into, figuring out how to utilize, you know, NFTs. And so they spent a lot of time building content. And then when the bull market came, They, they, they pitched it to new investors and pitch it to, to new partners and people loved it.
And it, you know, it went like 30 X. So it’s like, these are, some of the most under, like, like, I guess a lot of people don’t usually do, but I think it’s incredibly important, even for us, like, you know, it’s a fun, like when we’re during the bull market, obvious, obviously we’re, we’re quite [01:11:00] active, but bigger bear market.
We’re, we’re spending a lot of money and time into R and D preparing for the bull market for the next bull market. Right. So, and then, yeah, sorry,
Thomas: go
Jason: ahead. And then that ultimately led to our decision to invest in Ornos and B Side.
Thomas: So, so bears bear, spend your money on, on, on research, do a lot of R and D, less product, no marketing clear.
So what about, so now the bull, right? So we, we raised a ton of money in the bull. Everybody’s happy. Everybody throws money at everything. Where, where are we going to spend our money? Is it, is it now marketing?
Jason: And it’s mostly marketing. Yes. Marketing, product, just enough products that they, you know, they, they changes, like, you know, you guys have the capability and the tech and the enough capacity to actually build something like, there’s, there’s something that’s really interesting about this industry.
It’s like, there’s like a, you know, there’s like a lot of scam, like there’s a lot of [01:12:00] scam and there’s a lot of memes. Right. The way I define a scam is like. You tell people you can do this, but you can’t actually do it. And there’s a meme is like, you just tell people, there’s like, you’ll never, you’ll never achieve this.
You’ll never have a roadmap and never have any utility. And, and it’s people are perfectly fine with it. And in my opinion, it’s like memes are not scams, right? I think it’s the, it’s the, it’s the utility tokens are mostly scams, right? It’s like, they tell you that, you know, they’ll draw a picture. It’s like, and again, like the early days of ICO, right.
It was like. It’s like you, you’re, you’re basically selling a dish before the restaurant is even built. And at, at end the day, the, the, the customers will never even taste that dish.
Thomas: Right?
Jason: Yeah.
Thomas: So, to, to that point, yeah. Memes are very transparent. Nothing will come out of it, but, and if you’re okay with that, you know exactly what’s gonna happen.
Right. That, that’s, that’s, I think the, that, that the, call it the value of the meme, token.
Jason: Yes. But yeah, to answer your question, I think the bull market, you’re definitely spending a lot more money on, on marketing for the exchanges. So you get listed, [01:13:00] spending a lot of, of, of building communities so that people get excited about your product.
But again, like product, you can have like the worst product ever, and you can still get a bunch of users involved because there’s like a two arm, like framework or model involved. Right. And that’s like the unique part of, of our industry, which is like, People generally accept doing like things that are stupid and boring, but then at the end of the day, if they make money, they’ll do it.
Yeah,
Thomas: this is very true. And it’s not, that’s make my product heart bleed a little bit. I’m like, guys, there’s such a nice product. It’s like, no, no, no. We’re, we’re degenerates because we can earn something from this. Yeah.
Charlie: Yeah. I’m going to dip in here and. Rapid fire the last three of the 10 portion, because there’s just been so much good stuff coming out that I haven’t wanted to, to interrupt and, and, and shove us along, but really the, the meat and where I’m really excited to get to is, is the brainstorming component.
So I’m just going to [01:14:00] rapid fire these bullet point them back at me and, and we’ll jump into the brainstorming piece. What is the question regarding them? Yeah. So there’s, so there’s three. So the, the investor value adds beyond the capital, what’s a green flag for entrepreneurs, when you’re looking at an investor and advisor for a web three startup.
What, what are you, what, what are generally like the bullet points, the criteria is green flags for an investor?
Jason: Yeah, so I think a good way to look at it is, you know, obviously there’s branding component. There’s a lot of investors are also quite generally quite, equipped with the knowledge to build tokenomics.
A lot of investors, that’s like the general kind of like That’s just general skill set, right? They’ll be like, Hey, take our money because we have good brand. We can help you with tokenomics. We can basically be the consultant or the advisor without actually, you know, taking additional tokens or USD.
[01:15:00] And so we’re like, you know, we’re the expert in, in finance and tokenomics. Right. And even in fundraising, right. It’s all that stuff. But beyond that, it’s definitely the, you know, the, the investors that can provide a lot of, community, like real organic growth, in, in, in your product and, you know, I’ll, I’ll give you an example.
So. No, we, we invest in again, like in a lot of Bitcoin layer ones, like part of our job is to get a lot of good developers, a lot of good projects built on top of that chain, and not that protocol in order for them, for the community to see that just alpha going on, right. There’s like, you’re basically building alpha for the, for the, for the retailers, for their community.
Right. That’s important. I think that’s important because, if there’s no alpha on, on, on, on the protocol, then. People are not going to want to build. There’s not, it’s like a chicken egg thing, right? It’s like, you got to have community users or users or followers first before you can, before you’re able to kind of [01:16:00] track like more developers into equal system.
So that’s what we do a lot. You know, we, we, we try to not just from a. A product perspective, but more from an equal ecosystem perspective, like a Bitcoin layer one is so early right now, like we don’t even care if you’re just building on BRC 20 or tap or runes or rings or whatever, right? As long as you’re building on Bitcoin layer one is a win for Sora Ventures.
And so the way that we do it is we’ve hosted a conference. So, you know, last, last, last year we did a conference called Sora Summit in Taipei. end of the year. And this year, we’re, we’re bringing it back again, two days. We’re flying in DJs. We’re expecting more than a hundred speakers just on the Bitcoin side.
It will most likely be the largest Ornos conference in the world. And so if you guys ever want something crazy, where it’s like everything Ornos and, you know, You know, you can get runestone and stone everywhere like that is the conference to attend it’s going to be end of end of end of year So like these are things that you know for a fact that like it’s [01:17:00] tangible right?
It’s it’s there right? It’s like
Thomas: real
Jason: it’s real and so like when an investor is able to do something like that It not only shows that they have they’re willing and able to bring in a lot of resources for you But more importantly, it’s like they understand That, you know, they’re not like this one individual who just are here, you know, just to make money, but you also care about, the, the equal system.
And that is very important because every investment firm, almost any, every, every investment firm in our industry in web three, they’re all call ABC. Everyone’s called ABC. But it takes a very specific trait, like a very positive, like a very unique trait and character. To be a true BC, you know, like for example, you know, in the, in the, in the web, in the traditional finance, in the world of finance, there’s BC, there’s P’s hedge funds, right?
Hedge funds look at numbers, right? P’s they look at numbers, right? They look at a lot of tractions, look a lot of things like VCs [01:18:00] is by far the ones who generally don’t look at numbers the most out of the three. Right. But in, in, in our industry, there are going to be VCs who, who only care about paper money.
Who doesn’t even care about if you’re going to make it or not. They just want to get the paper money, you know, the five X, 10 X on paper. And from their perspective, they’re okay with, you know, investing in high valuations because they’re able to get a two X return, but it’s going to be like a 10 million return.
Right. And there’s going to be VCs like us who cares more about like the a hundred X return, the 50 X return. Right. And then just like, but then they’re all called VCs. Right. That’s a funny thing. They’re all both VCs, but then they have entirely different business models. Right. And there’s also VCs who are just like, we’re just here to pump and dump.
Right. And there’s like a lot of that. Right. And there’s this only VC, there’s also VCs who are like, during the bull market, they’re like, we’re in, we’re in, we’re investing everything and then spray and pray. Right. And then during the bear market, they’re like, We’re not even here, but hey, they’re also called VCs, right?
So it’s like, there’s [01:19:00] so many types of different investment firms out there. They’re called VCs, but entrepreneurs do not realize like, like these VCs are, are not actual real VCs. Like most of these VCs are just here to make money. And so in order to be a real VC, you got to be a giver. You got to be a very genuine giver where you believe the VC model is.
In order for you to make a dollar, your portfolio company will mostly have to make a hundred dollars, right? So you’re only, you’re, you’re only getting the X amount of a small amount of a profit based on the overall success of your, of your portfolio company. Like that’s how the VC model works, right? And what business does it require?
Like anyone to be like, Hey, you make a, you make it a hundred X for your portfolio company and only get like 1%. Right. So you have to be a true giver. You have to be a true giver. You really, like, genuinely enjoy watching people succeed. And it’s a process. You make a bit of money to stay sustainable. But, like, that’s how the VC model works.
Not a lot of people are like that in [01:20:00] our, in our industry.
Thomas: Absolutely not. I mean, this, this is one of the first times I hear the narrative of how I personally look at VCs so well explained by somebody in the, in the industry, because it’s very often the other way around, right? Like, Oh, for sure. Yeah, that’s the biggest, I always joke with Charlie and with some of my friends that are in the same industry is like, you know, VCs are necessary evil.
But they aren’t if, if you’re a true giver, because now, now they become support, now they become help, right? But very often it’s, it’s, they’re necessarily evil because you need their money, but they, they will not add any value or they steer you actually in the wrong way.
Jason: Especially in Web3, you know, especially Web3.
Thomas: Yes. Especially Web3.
Jason: Yeah, I tell my friends who are in this industry, they, they, they look at us as like, Oh, you guys make a lot of money. I might. You guys don’t know like how complicated and how complex and how shady this industry is even after so many years, right?
Thomas: Yeah,
Jason: it’s it’s 99 [01:21:00] percent scammers regardless of your project or VC and you’re 1 percent the giver
Charlie: Yeah, there’s a lot of takers in this space.
A lot of takers, 99
Jason: percent takers, right? A lot of takers. Some are takers, like extremely cost scammers, but generally they’re 99 percent takers. 1 percent giver. Yeah. And so it’s, it’s really, really hard to look for VCs who are genuine about what they do, who are genuine about growing ecosystem, who we actually enjoy watching people grow more than themselves.
Charlie: Yeah,
Thomas: very hard.
Charlie: Totally.
Thomas: Makes, makes my, by the way, sorry, sorry to say this, Charlie, and then I’ll leave it to you. But that makes my heart as, again, development, super happy to hear this, that there are people out there that do this, right? Because that is something that, you know, I’ve seen my clients past and present and future clients somehow getting rugged by, by their VC.
And it’s just really nice to hear that there’s just people out there like you, like Sord that says, well, screw that. We’re not like [01:22:00] that. We’re actually the complete opposite. And, and the whole stigma. Regarding our, our Particular piece in the industry called VCs is really bad. And we are aware of that.
And we’re actually looking to change that because that’s, that’s kind of what you’re saying here. And I think that’s beautiful. So that makes, makes my heart like really happy here. Yeah. I
Charlie: have no worries. So question nine, post investment expectations. So what are the. What are the post investment expectations?
Like what do you want to see? You’ve just put in a ticket, 250k, 500k into a business. What do you want to see? Is it reporting, governance, strategic involvement in the startup? What’s your expectation?
Jason: I think it’s important that they, well, it depends on what stage of the company is in, right? But like from our side, after like literally after they’re done with fundraising.
So, so, so our ventures have a bunch of media company that we invested. So, so for example, we’re, we’re invested in Bitcoin magazine. We’re investors of blue blockchain, [01:23:00] which is the most, the biggest like media company in Asia, we’re investors of crypto slave, we’re investors and, and we were investors in the block, a bunch of these media company, we have about seven.
Profile companies in the media space. And generally we don’t make money from the media company. So I guess equity, and if you’re in the media business, you’ll know very well. It’s like, it’s, it’s. It doesn’t go 100x. It doesn’t even go 10x, right? It’s like you make some money and you’re able to sustain for this business for a long time Generally when you invest in media, you’re never going to get any form of returns and so like it’s like it’s never like a great business to invest but we do it Anyways, because we’re probably the one of the few funds ever in the industry that does that where we can invest some money into media, but because we feel That media is one of those business that is so important.
So, so, so important, for the industry, and you should be backing them because They they play a very important role in the industry in the sense that they’re the ones who are providing a lot of news They’re providing a lot of education I report a lot of content for for people who are new to this [01:24:00] industry and they’re like the bridge Where like people just starting to learn about something and they want to get it right.
And this is important for us. So this is why it’s important. The second part is, you know, we, we also want to be working quite closely with the ones that we have like a lot of trust, like high trust, where, for example, like we’re not going to You know, if we don’t believe that this project is legit, then we’re not going to obviously share it with our media portfolio company, but generally when we do share it with them, they will always announce it and they’ll always announce it in advance.
So like, these are value add, I think will also help our portfolio company get more exposure, right? So these are some of the things that we do for portfolio companies. So it’s like, you know, if you get money from Sora Ventures, you actually don’t end up spending that much money or you don’t even need to spend that much money on media and exposure because we can do that for you for free.
And that’s kind of like our perk again, going back to being a giver. Like, this is like the most immediate giving opportunity where I think a lot of funds will, will might be like, Hey, we can do this for you, but we’ll want, we’ll want this, we’ll want this leverage. [01:25:00] But for us, it’s like, it’s almost a guarantee.
If you take money from us, we will do a lot of media exposure for us, for you guys, regardless. It’s just depending on like the distribution and level of the quality of, of, of, of, of media platforms. But from the project’s perspective, it’s like, You know, once you have some media exposure out about the round, it’s often, you know, usually it goes to the questions like, you want to do another round, you want to do a follow up round, right?
Again, we depends on the stage, but, you know, generally when we invest, it’s like we’re investing in the pre seed and they’re kind of round one, round two. And so there’s always going to be a follow up round. And, and that, that’s the question. It’s like, They raise just enough money so that they can raise more money in the, in the following round.
Right. And then once we hit race and following the following route, it’s usually about getting listed and working with changes. And so this is where we start, you know, making some intros about like working with like larger funds or exchanges and start talking with them. Right. And then if you’re changing are interested in you to generally invest and working with them, but regardless, they’re on, they’re on the radar.
[01:26:00] Right. And that’s, that’s really important because like they can start tracking like the growth of this project. They start knowing, like, it’s, it’s not like, it’s obviously there’s always zero to one experience, like this growth, this entire, this basically you want to have exposure to that. They know what’s, what’s going on.
And so. It’s important that the project from the project perspective. They’re all always giving like updates to exchanges and these are something that we expect them to do But on the product perspective, of course, I think it’s the guy to have some up some some upgrades, right? You can have no product before you you even launch.
You’re you’re if you do your first round, you can almost have no products or have like an MP MPP, right? But once you finish a round you should at least in the next round You should have some products that actually make sense. So users are are trying it. There’s ways where you can use it It’s value add to a community and like all that makes sense, right?
So The guy spent some much more time in between kind of like the first round, the second round to be building a product. And then once you hit the second round, you finish the second round closing. That’s when you scale your product, [01:27:00] right? You try to scale your product if it works. So a lot of times in the process There’s always these, these opportunities for retailers to get involved.
Like again, we’d like to invest in Layer ones. So like in between there’s all these like, like, developers or, or, or other projects that are building on this layer one, and there’s always this alpha that’s happening. Right. And the profile company that we’re working with are either supporting them, in the process and then while.
Basically sharing alpha in the sense that, Hey, you know, whatever you guys built on top of us, like this is going to be the first phase of utility. And then once we do an upgrade on the protocol, then there’s going to be more alpha being built on top of these existing utilities. So these are things that could get people excited and to learn more, and then they’ll get their friends to join.
They’ll get their other. Communities to join and then they’ll be able to expand. And these, these are things that we definitely feel that it’s important because you don’t have to have like, amazing product. Like in Bitcoin for example, is very, it’s insanely like, it is insanely, [01:28:00] I guess, simple because, you know, Bitcoin does not have a lot of the tools and the, features just like Ethere right?
So it’s like even like just. Airdropping is a like cheap airdrop on Bitcoin is like, it’s like a huge thing
Thomas: because,
Jason: because, you know, one of the most problems, like most of all problematic about Bitcoin is like the fees are incredibly high. Right. And so it’s like, if you’re able to, airdrop to a lot of like users, but for a relatively cheap price, like, That is a feature people want and that, you know, like if you can stake on, on, on your network on Bitcoin, that is a feature people want, but like staking on Ethereum is incredibly simple, right?
But it’s like staking on EVM based stuff. It’s incredibly simple, but it’s like in Bitcoin’s world, it’s like, that’s incredibly hard. It’s like unheard of, right? Nowadays, you want to stick, you’re basically on a side chain that’s built on IBM, so it’s not effectively a Bitcoin layer two, they call it Bitcoin layer two, but it’s effectively not Bitcoin at all, but like, that’s how like, I [01:29:00]
Thomas: mean, to that, to that point, actually, I mean, you know, you’re not talking kind of like about longterm vision and impact, right?
Because like, we’ve been. So far, we’ve talked a lot about like short term, like, or shorter term, but this is kind of like specifically when we’re talking about Bitcoin, it’s like, you know, building a staking mechanism, building an airdrop mechanism, those are, those are long lasting impact, Oh, for sure, for sure.
So, I mean, from that perspective, how do you look at, at, at longterm vision and impact? Like, are you specifically like as a, as a VC, or are you looking at these, these things? Because like, you know, we talked about narrative and timing, but some of these things are lasting, right? Like, and these have a lot of impact, both, I think, in the Web3 community, but also, I think, in onboarding, end users, right?
So, you know, how do you look at, and then I think there’s a piece to tokenomics as well, utility that we discussed, like, You know, scaling your utility, [01:30:00] over the years and over the narrative and over the timing, I think is a really important thing as well. So how do you all tie that up and looking at a long term vision of an impact of a startup?
Like how important is that for you? And I think for, for, for the industry, right?
Jason: Yeah. I think in terms of scaling of utility, it should only. It will always be different in the sense that when you first started, it’s always going to end up being different after like two, three years. And that’s totally normal, right?
This is like, you know, like I like to say, like, you’re, you’re really just finding product market fit as you grow, as you build your, your, your product, and that’s like a web free thing. It’s like, you know, it’s like, you’re basically always, you know, start raising when there’s like nothing. And then as you go, you start to find product market fit.
I think what’s important here to note is that, Within this journey of, of, of building and, and look, you know, basically envisioning what’s, what’s going to be valuable. There’s always going to be case studies in our, in our industry, where you can benchmark and learn from, like, for [01:31:00] example, that you can look at Ethere you can look at, you know, like a lot of the existing EBMs and how they grew.
And there’s a, there’s a lot of stuff that’s happening within the EBM space that, you know, like, especially for, you know, Even for Solana, for example, like if people ask us, like, what is the limitation for Solana? And I’ll say the limitation of Solana is equally the same as this limitation of Ethereum. If there’s no innovation on Ethere there’s no innovation on Solana.
If Solana will innovate as, when, Ethereum innovates as well. Is it, no, they claim to be a different, a better version of Ethere but realistically in terms of the core features, life saking, like, you know, like a lot of these upgrades that’s happening in, on, on EVM components, it’s like. at the end of the day, they’re just benchmarking Ethereum.
So there’s innovation on Ethereum. There’s innovation throughout the entire ecosystem. And so I think what’s important, but then it’s important, like if you’re building on Bitcoin, for example, then like, there are so many things that on Bitcoin that is not even achievable today, like that narrative it’s, it’s Maybe like three, four or five [01:32:00] years.
And that’s why we’re so bullish on Bitcoin. It’s like, Bitcoin is basically an embryo. It’s like zero, like absolutely zero. And then like, we’re going back to 2008, like probably go back to 2016, basically on a mysterium days. Like, you know, so it’s like, it’s a long, if you want to say like how, how long I can probably say maybe 10 years, maybe 15 years is possible.
Right. And then how, that’s a
Thomas: big bet to make as well, by the way.
Jason: Oh, for sure. I mean, the only bet I’ll probably make today is Bitcoin. I mean, if Bitcoin goes down 50%, all your shit coin is going to go down like 90%, right? So it’s like, yeah, so it’s like, we’re investing into the future of Bitcoin because the future of Bitcoin is secure as a future of three, right?
Thomas: One
Jason: of the things that a lot of people are concerned about is the halving, right? Every time there’s a halving in Bitcoin, then there’s always articles that says like, you know, miners are to go out business. There’s going to be, they couldn’t be less than less decentralized. And that’s all bullshit now, because We’re investing in Bitcoin utility because [01:33:00] now there’s or no fees have gone up because of or no, right?
Yeah, I looked at the on chain data every day like it’s like there’s activity on on Bitcoin, right? A lot more than people expect there are so it’s like these are genuine data that will can be scaled to secure kind of the entire Bitcoin network, which, you know, most likely, most, mostly to secure kind of the profitability of, of, of miners and then which will ultimately secure the profitability of like the entire Web3 industry.
Charlie: This has just been fantastic, Jason. So thank you for, for taking the time, but we’re going to bypass the, the brainstorming piece. Cause I think we’ve basically done it in the 10 questions and I’m mindful of time. I would say this,
Thomas: Charlie, like, I mean, Jason, I could talk for hours, with you because I, your, your perspective on all these things so far, Some of these things have been eye-opening.
I’m, I’m in this industry for the last six years as a builder, and as project manager at BD doing all these things. But talking to somebody that has such a say, call it a peer view [01:34:00] of, of what, what investing means and, and being a VC means in this industry, I think is it, for me, it’s, it’s been incredibly enjoyable, to, to listen, spend,
Jason: and a real
Thomas: pleasure,
Jason: you know, likewise in the sense that I, I think it gives us the opportunity to see that there are VCs who are.
You know, in the past, you know, when I started first investing, you know, for store ventures, I will always feel like it’s important to formal, right? You’re always important to capture what’s hot in the market. Nowadays I’ve been in the industry for like eight years where I’ve been like invested. You know, I’ve been running my company for instance, since I was in 18, honestly, I’ve seen so much in this space.
And sometimes it’s like, like the, the, the most, the most important thing you got to realize is like, there’s always a hundred X opportunity, like a hundred X opportunities in our, in the web free market. And so like you never, you shit FOMO into something that you don’t understand. Right. So, nowadays, like even we, we have like, you know, meetings with my colleague and my colleagues will be knocking my, my, my, my door and be like, Hey, [01:35:00] we got to invest in this company.
It’s like, it’s hot as hell. It’s like, you know, all these big firms are investing on like what’s the valuation. What’s the, and then within five minutes, I’ll be like, this is not worth investing. I understand that. Like if there’s a valuation, it’s going to probably going to go up. I understand that this is backed by some of the top firms and topic changes, but, You know, in my experience of investing, it’s never about chasing that ultimately gets you to win.
It’s never like that. In fact, I think that will lead to a dead end because it means that you’re not an independent thinker. You’re not, you don’t have your own thesis. You can get distracted easily. And one of the reasons why I live in Taiwan and why we moved to Taiwan over Singapore and the most majority of people, if you’re in Asia, you move to Singapore, right?
Thomas: Right
Jason: is because the same reason why Warren Buffett is not based in New York. Distraction, right? When you have a lot of distraction, you can’t make independently when you have a lot of noises around you. News in general, even been in finance world long enough news in general is one of the worst. [01:36:00] Media out there, to, to, for, for people who read news, it means like some, like all these news has been out for a little further within people who are in this industry hours ago.
And so when you’re selling the news out there, it’s already, it’s secondary stuff, it’s secondary data, you feed into the audience and they get wrecked. Right. So news is one of the worst data in my opinion, to go for, if you’re actually like genuine about. Getting involved with finance, right? So like that same way in crypto, like crypto is the same way.
Like if the news comes out for something probably 10 hours ago, it was sort of being like the market where you kind of took in already a small amount of players already kind of like knew the news and there’s only inside trading already going on. Right. So it’s like, it’s, it should not be like our initial, like if you’re an investor, especially you want to independent, you want to be an independent thinker and then to have Your moment you have your own style.
It’s important to not get formal. And nowadays we miss these opportunities on these, you know, big culinary too, we don’t feel a thing. Like we’re actually quite, and we see so much, like [01:37:00] we were so transparent. We know exactly what’s going to happen. We, even if it’s a 10 X for us, it’s like, Oh, that’s nothing.
Cause you wouldn’t, you can make a 10 X on there. Like we can make 10 X on, on the pickle layer one, you know, every week if you want to. Right. So it’s like, it’s like all the trains like that every week. So it’s like, At the end of the day, you want to have your own style and investing, just like as an entrepreneur, regardless of you’re running a VC fund, regardless of you’re starting a new company and web three, regardless of you’re ready to pivot into two new narrative, you should have your own style.
Thomas: Yeah, that’s, that’s, that’s big. I it’s, it’s one of the reasons why Charlie and I are doing this podcast, together, pretty much the same, same reason, like carving your own road, carving your own, your own style towards what we believe is right. And what we believe is important rather than what the whole market says and what the, what is being echoed on conferences.
And, I think that is so important. And also I think towards our, our, or listeners towards our clients, having your own style and, and be a bit stubborn [01:38:00] in, in believing in what you’re doing is not a bad thing. It really gives you, an edge, and, and the right people will see that too, I think that’s a very important thing to mention as well, because I think Jason, when you guys started, people were probably also like, Oh, that you guys have a bunch of crazy ideas, right?
But as you move forward, they also see the success because you carved your own path and they’re like, Oh shit. Yeah. That’s actually. It’s real. How did you do it? Well, by being a bit stubborn and by carving your own path and being brave, I think, in the sense, right. Charlie,
Charlie: I’m going to, I’m going to move on to the last segment of the pod.
So this is called your desert Island essentials. Something we came up with, or I came up with that basically says if you had no bags, you’re starting again from scratch, beginning of your career, no bags. No black book of contacts, no reputation. What would be with the not, but you keep the knowledge you have now, what would be the five.[01:39:00]
Things that you bring with you. Program, book, course, tooling, something practical that you can share with our listeners that they should probably do.
Jason: Yeah, I’ve heard a version of that before. I think, you know, like, generally speaking, if I go bankrupt tomorrow, I can definitely make it back. I think as long as you keep the knowledge, you keep the experience, like, you can just, the one thing I will need is give me my t shirt and my underwear.
Yeah. Yeah, I’m quite genuine about that. You gave me that close, and I think I’ll make it back quite well.
Thomas: Okay, so, okay, so, but again, we have, we have four more, more pieces, so it’s, it’s very clear you’re close. That’s an important thing. And to that point, I think everybody needs that, right?
Jason: You know, there, there is a couple of books.
I think if you’re referring to like things, I think are, are, are, are really, really good. And that, you know, at various different life, I guess, part of your station, different, your entire life, it helps a lot. [01:40:00] One of them is. I’m a big fan of actually modern philosophy. So, one of them is the Prince by, Nicola McAvalli.
Right. Okay. Yeah. And I read that book a couple of times. And I read it in high school. I read it. Philosophy is interesting because philosophy answers a lot of questions that a lot of people cannot usually give a response to when, as, as you progress in the business world, there’s, there’s mentors they can talk to, but even sometimes mentors cannot give you a lot of the advice.
Or proper advice. And so you go to books, but then of the, all the categories in books, it’s a generally, I think the most extreme case is religion, but, you know, generally within religion, I thinkm, philosophy, especially modern philosophy is a very practical approach to solving problems and perspective on life.
And so I, a lot of problem solving and a lot of understanding of things that the book from the Prince talks about [01:41:00] can be really applied to the business world, a lot more than a people would expect. It’s like in the, in the East, there’s like the art of war and the West, there’s the prince. Actually, the irony is the, he himself actually wrote in a book called the art of war, which is exactly the same title.
But it’s, it’s, it’s, it’s published a different time, time, timeframe, different year. If you didn’t know that.
Thomas: Yeah. So, so that’s your number two. What’s your number three? I’m not going to make it as easy. My laptop,
Jason: my, my, my laptop, my laptop, you got to give me a laptop, right? My laptop, my wifi, right?
I’m living this out, like wifi. Those are important, right? You gotta be connected to the world, right? You gotta be, like, this is all about making money, it’s all about digital, like, everything is digital in today’s world. So you gotta have laptop and all these things, communication, Wi Fi, that’s important.
That’s like, that counts as two, right? Yeah, I say that because honestly, like, I’ve asked myself [01:42:00] this many times, like I’m in this business where I consider myself to be like high risk, like if I do end up going bankrupt one day, can I make it back? And I’ll say yes. Yeah, I feel very comfortable that if, if I, if you just give me my, my t shirt and I’m Underwear on my jeans and I can easily make it back.
Thomas: So I’ll, I’ll, I’ll, I’ll count it as to, if you agree with me on, on environment, because you just mentioned, Hey, we moved to Taipei,h, instead of Singapore. And together with Wi Fi having a laptop. Yeah, well, but I mean, like, so no distractions, right? Yeah. Like, yeah. Yeah. So if we put you on a, on a desert Island with just Wi Fi and an electricity outlet.
Jason will be happy, right?
Jason: Yes. Yes. No, no distractions. Yeah. Yeah. And, it’s every, every business person will have their own Bible, their version of the Bible. And that’s, for me, it’s the Prince.
Thomas: So, so then we have one more man. That’s hard.
Jason: I mean, I, I don’t want to say like, I don’t want to say things like [01:43:00] how, like a, like a shelter or anything or water like that, because that would be the most boring response.
Thomas: Yes.
Jason: Yeah, but you know if anything I think I guess it’s really hard to to do this with on the island but you know, like one of the things i’ve always thought about like the way I look at money is that money is Really a tool that you’re you’re borrowing from society and so, you know, whatever money like let’s say you go to your island you make your money back So what do you the money like it’s useless on the island.
So I guess With or on the island or without the island i’ve always thought about this is you know at the end of the day You you don’t need a lot of money in this life. And so whatever money I make I do want to like donate away To to other people in society and to make good use good use of it Actually, i’ve started donating to high schools already like institutions.
And it’s like, uh part of that is because yeah, I mean my my understand money to me. It’s just like it’s like it’s a temporary tool. It’s a When [01:44:00] you die, there’s like, it’s, it’s, it’s, you’re not going to be able to bring with you. And if you have kids, if they’re legit, you can provide them with the best education from you, from around the environment.
But if they’re not legit, even if you give them a lot of money, they’re just kind of wasted. And if they’re legit enough, they’ll be able to make more than you can. And so, you don’t actually need a lot of money. to start a family, to especially the, you know, have kids who are like really, really smart, and very successful.
In fact, some of the smartest people, I think, who, who’s like, who entrepreneurs in the last 200 years come came from, like, really, like, medi like, like, basically, like normal families, right? It used to be the fact that it, like, a lot of rich comes from their family. And that was like the old generation, right?
In Europe and in Asia. But even in Asia today, it’s becoming less and less of a thing. And, and so, my, my fifth item is that if there’s a way that we can send that money out and distribute that money [01:45:00] out, that, that would, like, ultimately there’ll be use for, you know, existing, like there’ll be a meaningful purpose for making money.
Thomas: That’s, I, I will say it is, I think I’ve never heard that from somebody who runs a VC, like that take on money and I love it. No, I think it’s great. Like Jason, I come from a VC
Jason: is part of part of this job. Like, you know, VC is just giving money. Right. And so if you make more money, you get more money away.
Thomas: Yeah, but this, well, this whole episode has been a bit about giving and supporting, which, which is, I, I will say I’ve been very surprised because I would not have guessed that at the beginning of this episode, which I think is, is really cool. You don’t
Jason: follow my Twitter then? You don’t follow my Twitter?
No, no, I
Thomas: will need to, I will need to, man. Yeah, yeah, yeah.
Jason: If you follow my Twitter, you know, like, I like to give a lot of stuff.
Thomas: I’ll, I’ll subscribe as soon as we can. Yeah,
Charlie: yeah,
Jason: yeah.
Charlie: So Jason, where can people find you? How would you, what would you ask? Like, what’s your call to action?
Jason: [01:46:00] Oh, you know, I’m following me on Twitter.
I’m always active on Twitter. I’m, you know, I, people can find me on Twitter all the time. I’m very open to DMS. I’m, I’m, if I’m not checking, it’s probably because I’m on the plane or somewhere, like most likely on the plane. Right. But generally I’m always checking my, my, my Twitter. Yeah. I went to my Twitter.
Is this, is this Jason Sorovici?
Charlie: Got it. Fantastic.
Jason: Yeah.
Charlie: All right. Thank you very much for today’s episode I hope you guys got some value out of out of this. I mean if you didn’t you’re the problem I know I had Yeah, I know I did too and with that we’ll see you on the next episode. Thanks very much.
Thank you. Goodbye
