Investing in Thesis
Viktor Bunin and I are proud to announce our investment in Thesis’ Series A round alongside ParaFi Capital.
While the crypto ecosystem is rapidly growing, there is a limited talent pool that deeply understands the nuances of crypto and has experience scaling a crypto business. Founding teams in crypto need to have a rare combination of experience with decentralized technologies, tokenomics and incentive models, community building, and commercialization. They need to understand the quickly evolving crypto landscape in order to identify new opportunities. Lastly, they need to be able to recruit from a broad talent pool that will enable them to execute and scale. There is an opportunity to create a world-class venture studio model specifically focused on building crypto products and protocols. This drove our investment in Thesis.
Thesis is a venture production studio that builds and funds products and protocols in cryptocurrency and decentralized technology. The Thesis team has deep experience across Web2 tech companies including Google, Square, and Uber, as well as crypto companies like ConsenSys and Casa. With this hybrid team running the studio, Thesis iterates quickly on opportunities and launches 1–2 projects per year. They validate an idea within 1–3 months before recruiting a full-time team to scale the project. The scaling team will benefit from the institutional knowledge and resources as well as capital partners that Thesis can uniquely bring to the table. Companies started by Thesis have raised from the top investors including Paradigm, a16z, Craft, Slow Ventures, Polychain, and Electric Capital.
Thesis has already launched several successful projects including Fold, Keep Network/tBTC, and Saddle Finance. Fold aspires to bring bitcoin to the masses. It started by launching a bitcoin cashback debit card, which rewards consumers with bitcoin by shopping at retailers including Starbucks, Uber, and Whole Foods. Keep Network/tBTC built a bridge that allows bitcoin to be used within decentralized financial applications on Ethereum. Based on its learnings from Keep Network/tBTC, Thesis launched Saddle, which is an automated market maker (AMM) for pegged value crypto assets, like tBTC. Given Saddle and tBTC were both launched within Thesis, they naturally partnered to bootstrap Saddle’s launch. Through these projects, Thesis is already serving millions of users and facilitating hundreds of millions of dollars in transactions. These initial projects have informed the model so they could accelerate the deployment of new projects.
The Thesis team has demonstrated their ability to replicate this process of building, launching, and scaling projects with its venture studio model. The studio’s early successes have created a flywheel effect, enabling Thesis to attract the capital and recruit talent — including repeat founders, skilled engineers, and experienced marketers — to lead future projects. Additionally, Thesis has the shared resources including finance, marketing, and design that entrepreneurs can tap into while validating their concept. This gives Thesis projects a unique advantage in their development, while also lowering their operating costs. Given how involved Thesis is, they’re also in a unique position to earn their follow-on rights in subsequent funding rounds, particularly when the company is succeeding and the funding round is more competitive.
For all of these resources and support, Thesis’ ownership in the project is in line with many seed investors. This is in sharp contrast to most competing venture studios that take an outsized stake, diminishing founder / early employee economics, and making future rounds unattractive for later investors. In the competitive funding environment that exists today, entrepreneurs will be attracted to the investor who can bring a differentiated offering to the table. We believe Thesis has the infrastructure and community to uniquely attract top entrepreneurs to build projects within the studio. This advantage will only grow over time, as the platform develops and the portfolio continues to grow.
Of course, this all assumes that the core team will continue to identify these opportunities and know when to hand off the project to a full-time team that can scale it. Given the nascent stage of the crypto ecosystem, we know there is still a lot to be done and the Thesis team is well positioned to launch projects that meet the market’s needs. Based on our experience working with the team from our investment in Keep Network, we are confident in their commitment to the studio model and have observed how they successfully hand over the reins when it’s time for the project to scale.
We are excited to support Matt, Laura, Carolyn, and the rest of the Thesis team on this journey as they attract the talent and capital needed to fuel mass adoption of crypto and DeFi.
