20VC: Why Crypto is Software Eating Money, Why Crypto Firms Will Outcompete Traditional Venture Firms, How To Price Tokens and When To Have Them, DAOs: How Are They Structured and What Makes One Successful with Avichal Garg, Co-Founder @ Electric Capital
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 11 April 2022
⏱️ 57 minutes
🧾️ Download transcript
Summary
Avichal Garg is Co-Founder & Partner @ Electric Capital, last month Electric announced they had raised $1BN for their new fund making them one of the largest independent and crypto-native VC firms in the world. As for Avichal, prior to Electric, he was an investor in crypto projects such as Anchorage, Bitwise, Lightning Labs, and OpenSea and unicorns such as Airtable, Cruise, Deel, Figma, Notion and many more. On the operating side, Avichal successfully sold his last company to Facebook where he became Director of Product Management for the Local product group, a team of 400 engineers responsible for billions in revenue.
In Today’s Episode with Avichal Garg You Will Learn:
1.) Origins into Venture:
- How did Avichal make his way into the world of startups and angel investing?
- How did Avichal make the pivot from software to crypto investing?
- Was Avichal nervous when making the move to institutionalize what had been personal investing?
- What does Avichal know now that he wishes he had known at the start of Electric?
2.) The Landscape: Crypto Investing
- How does Avichal assess the crypto fund landscape today?
- Will we continue to see a small number of firms (a16z, Katie Haun, Paradigm, Electric) dominate the market?
- What happens to all the small crypto funds that have been raised in the last year?
- Why does Avichal believe crypto investing is much more collaborative than venture investing?
- How can venture size returns be made if the ownership levels are so much smaller?
3.) Crypto Firms vs Traditional VC Firms:
- Why does Avichal believe that crypto is software eating money?
- What does this mean for traditional venture? Who will survive? Who will die? Who will thrive?
- Why can generalist firms not compete with crypto native firms?
- How are the teams of crypto native firms structured so differently to those of traditional VCs?
- Do crypto projects and investments need the same level of service and help that generalist VCs provide with their platform services?
4.) Tokens - Equity - Liquidity:
- How does Avichal advise investors on how to think through token vs equity investing?
- When does it make sense to have a token vs not having a token?
- How are crypto tokens priced and valued? What do you need to know when buying tokens?
- How does the liquidity of crypto markets make it challenging for investor psychology?
- What is the biggest lesson Avichal has learned on when is the right time to sell?
5.) DAOs: 101
- What are DAOs? Are they not just another form of government?
- What makes one DAO successful and another not?
- What tooling and infrastructure are required to manage a DAO successfully?
- What does Avichal believe the vision of a DAO should be? How should they define success?
Item’s Mentioned In Today’s Episode with Avichal Garg
Avichal’s Favourite Book: The End of the World Is Just the Beginning: Mapping the Collapse of Globalization
Avichal’s Most Recent Investment: Magic Eden
Transcript
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| 0:00.0 | This is 20 VC with me, Harry Stebbings, and today I'm placing a bet. I think this is the best |
| 0:04.2 | episode that we have ever done. Hit me up on Twitter at Harry Stebbings with your thoughts, and if you |
| 0:08.7 | agree. And so to our guest today, and we dive into the world of crypto, Dow's and Web 3. And who |
| 0:13.7 | better for this than Averchalg, co-found and managing partner at Electric Capital? Last month, |
| 0:18.6 | Electric announced that they had raised $1 billion for their new fund, |
| 0:21.7 | making them one of the largest independent and crypto-native VC firms in the world. As for Ava Chal, |
| 0:26.9 | prior to Electric, he was an investor in a crypto project such as Anchorage, Bitwise, Lightning Labs and |
| 0:32.0 | Open Sea, and unicorns such as Airtable, Cruise, Deal, Figma, Notion, and many more incredible companies. |
| 0:38.7 | And on the operating side of the table, Avichal successfully sold his last company to Facebook, |
| 0:43.0 | where he became director of product management for the local product group, |
| 0:46.0 | a team of 400 engineers responsible for billions of dollars in revenue. |
| 0:49.9 | Today's episode was also special because I knew very little, |
| 0:52.9 | and Ava Chal really, let's just |
| 0:54.9 | say, walk me through the learning curve on crypto and on Dows and on Web 3, incredibly patient. |
| 1:01.5 | And I want to say huge thanks to Eli Gill and Averchal's partner, Curtis. |
| 1:05.1 | Some amazing questions suggestions today really did make it so special. |
| 1:08.7 | But before we dive into the show today, if you are a venture |
| 1:11.1 | capitalist or corporate strategist, I want to tell you about Teegas. Tegas is the only company in the |
| 1:16.1 | world that aggregates qualitative information on private companies from Seed Stage to pre-IPO. |
| 1:21.7 | With Teegas, you can access other VCs and founders' expert cool transcripts from previous rounds |
| 1:27.1 | to help source fast-growing |
| 1:28.6 | companies, create compelling emails to get a founder response, and diligence companies, |
... |
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