Opinions and analyses

Shyam Kamadolli

This FREE webinar series is only intended for Accredited Investors, Qualified Clients and Qualified Purchasers (as defined by US regulators, see some expert guidance on definitions). 

Webinar:  Investing in Blockchain, A Venture Capital Approach 

Content:  We address these topics: Why is Blockchain an interesting sector to invest in? How can individuals access the opportunity?  What makes a Venture Capital approach different? What are the risks and opportunities in this sector?

Recorded: Oct 23, 2018

We recently completed our first overseas reconnaissance as we look to give our portfolio greater geographical diversification. Given the summer lull in the Americas and Europe, it seemed an opportune time to connect with a part of the world that does not slow down much in July and August: Asia.

Enough people asked me to present a primer on how blockchain works (rather to answer the question: is it Bitcoin or is it Blockchain) that I decided to put together a set of slides.  Note that I make some generalizations here in the interest of keeping it simple enough to be a first introduction.

Those of you following Applied Crypto Ventures (previously called AVG Blockchain Fund) are probably aware of our laser focus on the foundational layers of the blockchain stack. Our strategy has been largely based on our published thoughts regarding near-term opportunities in the sector in infrastructure and protocols.

We have also developed a view that in this nascent sector, the best deals in line with that strategy (entrepreneurs, technology teams, and investor syndicates) are based in the US — and consequently our early stage investments have been concentrated here.

However, we are now revisiting our geographical concentration strategy based on three observations:

Episode Summary: Shyam Kamadolli, Managing Partner of Alumni Venture Group’s (AVG) Blockchain Fund, is in a unique and specialized position. Through a series of career moves, he picked up a background in cryptography before becoming a venture capital investor focused primarily on early stage technology companies. When the value of Bitcoin began to increase, Shyam got interested and leaned on his crypto expertise to look at potential VC opportunities in the blockchain space.

Anybody (especially me) trying to break down blockchain investing into a rubric of any kind would be treading on thin ice; this is a complex ecosystem and that is rapidly evolving and I do not think anybody has a complete and well-informed view at once. But this post reflects my current thinking and I am constantly meeting amazing entrepreneurs, technologists, and visionaries that help me evolve my view frequently.

While reports have been pouring in of Thanksgiving dinner conversations this year leading to retirees investing in cryptocurrencies, like much else at the feast, this is probably not healthy except in moderation. But the average retail tech investor could still make a play at blockchain based returns.  However, accessing the blockchain investment opportunity is non-trivial.  There are really three options at their disposal:

  1. Open an exchange account (on Coinbase, Binance, etc.) and trade in listed Cryptocurrencies
  2. Invest in equity of existing technology companies that will benefit from the adoption of blockchain
  3. Invest in a blockchain fund - usually a crypto hedgefund or crypto VC fund.

In this post, I will only address the first two, as the third is addressed elsewhere on our website.

A commonly held and reasonable view of why blockchain investing makes sense is that the technology is transformational on the scale of what the Internet did for businesses over the past twenty-four years, and possibly a lot more so. But just like the Internet boom of the dot-com-era (late 1990s) we are seeing a lot of hype, euphoria, and speculative buying of securities scarcely anybody understands. By most anecdotal estimates, less than 3% of blockchain tokens are actually being used to buy goods or services or real assets.

There are several primers out there on blockchain and cryptocurrencies — often used interchangeably, incorrectly — so I will not try to put forth another one here. Further, this post is not intended to be a guide to investing in cryptocurrencies (like Bitcoin), or the mechanics of investing in tokens/ICO, or a framework for professional investors to map tokens against existing equity investing paradigms.

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