1 on 1: Investing in bitcoin businesses

Matthew Mezinskis (crypto_voices) (moderator)

MM: I run a podcast based here in Latvia on bitcoin economics and money. It's American-Latvian. I do it with my partner who is based in Brazil. Today we're going to focus on investing in businesses focused on bitcoin and crypto.

NC: My name is Nic Carter. I work for a venture fund. We're one of the few venture funds that focus on bitcoin and bitcoin-related startups. We're not focused at ICO or things trying to bring down bitcoin. I'm also the co-founder of coinmetrics.io.

FM: I'm from Munich, Germany. I'm an IT architect. I have an interest in bitcoin and blockchain. I'm a huge shitcoin fund. I'm not directly into venture capital but I'm a technical guy with a focus on security... I'm used to get asked a lot about how to handle the technical details of the stuff getting bought and if it's useful or interesting. Since 2018, I'm a member of the HodlHodl and Casa Hodl family.

MM: I think we want to touch on lightning and possible applications on top of lightning. Before we get there, let's get a lay of the land in terms of venture investing in bitcoin. Nic, are you trying to benchmark your investments against stocks, bonds, fiat, US dollar? Are you looking strictly in terms of BTC?

NC: Benchmarking is really interesting in venture capital. Quite a few funds say they benchmark their investments against bitcoin. They ask themselves will this series stage equity outperform bitcoin over their return profile window. Eric Meltzer does this. The question they ask themselves is, will this startup actually outperform bitcoin? Coinbase seed stage round in 2012 didn't outperform bitcoin. We're a conventional fund so we don't benchmark against bitcoin, we're just chasing the IRR that our LPs are looking for, which is 15-20% annualized. Our investors get paid in dollars, very old fashioned.

MM: Florian, you're on the trading panel tomorrow, what kind of returns do you look at?

FM: It's hard to compete against BTC with those earnings. In the right markte conditions or bull markets... those investments or Hodlhodl or other ventures that I make as a trader or investor I see as a short-term hedge against bitcoin volatility. I believe in the ecosystem and what bitcoin could do for us. I see a lot of stuff built on lightning and how the technical is built.. for me it's a hedge against the short-term volatility and maybe the loss of value. I mostly look at people and who's on the team.