Oddbean

idk if I can name names yet… I’ll ask the founder I agree there’s not that many good equity investments yet which is, I think to your point, why there aren’t any funds that can do larger checks. It’s a bit of a chicken-and-egg thing. Maybe the market grows up and today’s seed funds have winners which let them grow AUM and write bigger checks, but it’s so extremely inefficient right now my eyes are bleeding. :P Early stage equity investment from an illiquid captive-capital/blind-pool can’t typically allocate more than 20% to liquid assets at the manager’s discretion. So the actual hurdle would be alternative illiquid equity investments. Maybe these LPs should just be all-in bitcoin, but if they’ve already decided to invest in a fund of illiquid technology ventures the hurdle is the alternatives from that asset class. As an independent with your own portfolio you have more latitude so everything gets priced against bitcoin.

“So the actual hurdle would be alternative illiquid equity investments” I disagree with you here. Anyone who is trying to find equity opportunities in Bitcoin companies, has generally speaking done their research, owns Bitcoin, and wants to support its development. If the equity opportunity doesn’t have the ability to hurdle Bitcoin, then why not own more Bitcoin? Yes perhaps you’re right from a fund management perspective, with existing funds under management, to compare illiquid But for raising a btc focused equity growth fund, you have to be able to beat Bitcoin Let’s say this is an opportunity / problem, how would you solve it?

Yeah, I guess I’m talking more about existing funds. There are plenty of funds with a broader mandate than bitcoin which are not crypto funds, but might invest across technology… e.g., maybe generalists, but with a fin-tech focus. They should be salivating on this opportunity. I agree that to raise a new btc-focused equity fund at substantial scale today would generally be a difficult proposition. Any LP would need to be educated enough about bitcoin and own enough already, but see value in building things which accelerate adoption of bitcoin compared to just owning more of the underlying asset. It’s not quite philanthropy, but it takes a certain disposition. I believe there are individual opportunities that can beat a bitcoin hurdle (and I invest in them myself as a small angel), but I think this get much harder to do when the volatility gets dampened with a portfolio. I guess if you want to solve for at-scale capital to invest in bitcoin companies that are breaking out there are probably two paths: 1) build deal-by-deal SPV syndicates for the rare occasions that these opportunities present themselves 2) build a more generalist technology venture fund with a close eye toward bitcoin when these opportunities do emerge idk, wdyt?

I like the idea of 1) Bide your time, be opportunistic, & jump when your insights scream massive potential This would be a great podcast episode btw 😜 I’ve thought a lot about a BTC startup podcast that could be a deal flow generator (which would now also look at Nostr ofc)