[MUSIC PLAYING] All right, so let's kick things off by talking about venture capital. You've been known to go around the venture capital circuit, the conference circuit, wearing a sweatshirt that says venture capital is dead. Yes. Is it dead? Has cryptocurrency killed venture capital? Look, I don't know the answer to that question definitively. I think cryptocurrencies, tokenization, ICOs, have introduced a new dynamic into early stage capital formation and venture firms are definitely taking notice. I also think there is a rising tide of companies who are looking at the venture ecosystem, who are looking at the power dynamic between investors and entrepreneurs, and who are asking themselves is this really the right way for me to capitalize my company, or are there other ways to do it that reduce some of the potential conflicts of interest. And so the shirt really is intended to be a bit incendiary, if you will. I've been known to be a little bit of a troll from time to time. But I think it gets people thinking. It gets people asking questions, and so it kind of helps spice things up. Sure. We just saw this week, there's reports at Andreessen Horowitz, the renowned venture capital firm, is launching a crypto-focused fund, which would be a big deal. Andreessen's since actually been investing in crypto assets since 2013. They were investing early on in companies like Coinbase, many, many others, and so they've built a considerable equity portfolio in the crypto asset and blockchain space. What they haven't been able to do, because of their current LPA, or their LP agreement, the way they raise capital from their investors, is invest directly into cryptocurrencies using investor funds that are dedicated to the main fund. So I think part of the motivation is creating a new fund with a new LPA that gives them more flexibility to invest in cryptocurrencies. Some of the established venture capital firms are running into some obstacles. Like we've seen Sequoia is now engaged in a lawsuit with Binance, the biggest crypto exchange out there. They said they were going to invest at a certain price in this company, but then all of a sudden all of the crypto coins started going bonkers. And now that company wants to get a better deal somewhere else. So it seems like there is some kind of mismatch between the traditional thinking in venture capital and what's going on with all of these cryptocurrency-focused companies. Well, I think the primary driver there is the power dynamic between entrepreneurs and investors. I think over the last decade in America, the venture community has engaged in something that I like to call the Thought Leadership Olympics. It's really fascinating. You know you see VCs sitting on stages, talking about all of these different themes and trends, but really it's the entrepreneurs who are doing a lot of the hard work. A venture capitalist is an allocator of capital. If you're allocating someone's capital and focused on maximizing the return on that capital, you're going to behave in some ways that may not necessarily be in the best interest of the companies you invest in. And I think the Sequoia lawsuit is one that, to be very frank, just kind of makes me laugh. It's like they're stomping on the table going, hey, we wanted to invest. Let us invest. So I don't know what they thought the outcome would be. But if I was a company raising money, I might think twice before taking a check from Sequoia or signing any sort of legal document. [MUSIC PLAYING] 

Are Cryptocurrencies Killing Venture Capital?

Finance

Entrepreneurs may not want the influence of investors. 

Athena Capital’s Meltem Demirors explains.
