It’s been fairly the yr for crypto capital, what with Coinbase’s blockbuster debut earlier this year in a direct listing and A16Z raising $2.2 billion for its third crypto-focused fund. However because the numbers on this frenetic market proceed to skyrocket to dizzying highs, there’s an open query for lots of crypto founders: who precisely can work with me on the earliest doable stage?
That’s the funding thesis of Ash Egan, the present solo GP of Brooklyn-based Acrylic, which right now introduced a $55 million debut fund that can be centered on what he dubs “inception capital.” Among the many LPs who invested are fund-of-funds agency Cendana, known for backing emerging VC managers, Accolade Companions, which launched a blockchain-focused fund-of-funds in 2020, VC companies Confederate and DCG in addition to people like Chris Dixon, Marc Andreessen, Jim Pallotta, and others.
Egan, who was previously a associate at Confederate and an investor at ConsenSys Ventures, and Converge, has been closely centered on the crypto house since 2015, backing early winners like Chainalysis, which was valued at $2 billion in March, and BlockFi, which is now worth a pretty healthy $3 billion for the four-year-old company.
He sees a possibility to be the earliest capital for crypto founders — maybe even earlier than they’ve began an organization. He desires to “be that first investor in an organization or a protocol earlier than they increase these giant rounds, even being an outsourced workforce member,” he mentioned. He says he’s centered on “the founders who’re taking large dangers, creating completely new markets, evolving the established order.”
The agency’s title has a number of sources based on Egan. “As a painter, my medium is acrylic,” he mentioned. “It’s an actual cool media because it meshes with all different mediums very well.” He additionally famous that “acrylic is usually painted in layers … and crypto is layers of protocols.” Lastly, he feels the title pertains to his fashion of investing. You “can’t simply plug in a system and depend on one type of technique,” he mentioned. “Crypto investing isn’t a science but, it’s nonetheless very a lot an artwork.”
Whereas there’s some poetry there, the fact of the crypto markets is that they’re extremely subsumed by the large monetary vagaries of the markets on any given right now (and let’s be frank, each given minute). Egan desires to deal with longitudinal investing with out continually wanting on the each day minutia of ticker costs. “The hope is that at scale, you’re ready the place you’re in early sufficient and cycles don’t actually matter,” he mentioned. “You wish to associate with founders who should not swayed by macro inertia [and who are] constructing one thing with a ton of worth in each bull and bear markets.”
The agency will spend money on each conventional fairness in addition to tokens, and he sees the agency’s Brooklyn headquarters as a novel asset. “Brooklyn is so well-positioned to be a focus for this subsequent chapter in crypto given that each firm has individuals in New York or who spend some a part of the yr right here,” he mentioned. “Wall Road is right here, media is right here… being native is big.”
To date, the agency has invested in a few startups and protocols, together with low-cost North American Bitcoin miner US BTC Corp, governance token protocol Automata, good contract auditing firm Arbitrary Execution, decentralized investing community Syndicate Protocol, and two different unannounced investments.
Whereas Egan says he’s fairly open to tasks throughout the huge universe of crypto, there’s one space the place he gained’t make investments right now. “One space that I’m much less excited at this level is generalized Layer 1 good contract platforms aka your Ethereum killers,” he mentioned. “There are a slew of contenders right here together with Ethereum, and I believe it is extremely tough to achieve market share in case you aren’t already constructing or in market right now as a generalized good contract platform.”
Proper now, Egan is investing solo, however is within the technique of constructing a workforce, saying that he’s interviewing candidates however hasn’t employed. He believes a complete deal with crypto will in the end pay dividends over time. “At scale, you could have community results throughout the portfolio,” he mentioned. “The portfolio really works with one another.”