Today we're launching AirTree Web3: $50m to support project and company builders creating the next generation of crypto companies and protocols.
Why now?
AirTree’s mission has been to support the most ambitious founders by backing their vision right at the start of their journey. The vast majority of our investments have been in companies leveraging software and the Web to transform legacy industries. We’re Web-natives – internet-based disruption is at the core of what we do.
But what if the internet itself was about to undergo meaningful disruption? And what if traditional venture capital was also under threat as a result? Who would we be if we closed our minds to what could be a fundamental transformation of our industry?
Crypto is finally getting real-world adoption
We have been tracking the crypto ecosystem since 2013. We’ve consistently said that the blockchain is a fundamental innovation that we’re excited about. We’re huge supporters of the open source movement and believers in permissionless innovation.
Until early 2020, we didn’t feel that crypto was investible for an institutional fund like ours. We experimented personally – snagged a few whitelists, sh1posted about VCs in discord chats, and got rekt plenty – the best way to learn is to do. But with our fund hats on, our view was that crypto was still in the installation phase; the infrastructure was still being built out, with “real” usage yet to come. We didn’t invest in Bitcoin in the early days because we were interested in technology platforms rather than stores of wealth. We didn’t invest in the Ethereum ecosystem early on because we were worried about the regulatory and reputational consequences of ICO mania.
It wasn’t until DeFi Summer (May-Oct 2020) that we truly grokked the fact that crypto had transitioned into “real world” use cases and adoption. The total value locked in DeFi projects raced from less than $10 billion to more than $100 billion in under 12 months. This 10X growth symbolised the flood of new participants in DeFi and the beginnings of its real-world influence. It was also the moment we started actively investing in crypto projects. Finally!
Since then, we have made five investments in infrastructure, tooling and projects across DeFi, NFTs and DAOs. While most remain unannounced, two examples of the breadth of our approach; Immutable, an L2 scaling solution for NFTs on ethereum and Zeta Markets, a decentralised derivatives platform built on Solana.
Introducing AirTree Web3
We’re interested in Web3 because taking the internet back to its decentralised roots is a very disruptive idea. Web3 is all about open, permissionless innovation. It runs on the currency of tokens – digitally native assets which confer property rights – giving builders and users the ability to “own” a piece of the new internet.
We’re announcing AirTree Web3 with optimism and excitement. We know from hard-won personal experience that this won’t be an up and to the right story. We’re ready for some to challenge us for being late and for others to challenge us for being far too early. We’re glad to be launching in a bear market and will be bringing our decades-rather-than-days mindset to bear. We’re ready for our investments to look silly before they look smart.
We’re acutely aware that investing in Web3 is very different to Web 2.0 and intend to invest accordingly. Specifically:
- Ownership. We understand that “traditional” VC ownership levels simply don’t work in Web3. A 10-20% stake is against the ethos of decentralisation.
- Participation. Web3 is defined by community and participation. We’re active in projects’ discords, we contribute to the community and we participate in governance processes.
- Usage. Investing in Web3 means staking, providing liquidity, running nodes and various other activities to help bootstrap the project. We do this already and are growing our capabilities here.
- Diamond hands. We’ve already held our Web2 investments for 8+ years. We’re black belt HODLers. We encourage long lock-up periods. We see it as a red flag if the team doesn’t insist on them.
- PR. We'll tell the world about your project. There is no substitute for attention in crypto.
- Talent. While acknowledging that DAOs are different from companies, they share many commonalities when it comes to getting work done. We bring decades of hard won team and company building experience to your project. We also offer recruitment services and help you win the best talent.
- Growth and scale. A lot of DAOs are trying to navigate the organisational “valley of death” between 20 and 200 people. We understand how to scale remote teams, how to implement OKRs and how to align a team.
- Regulation. We work with the government and industry to influence Web3 regulation. We make sure your views are heard.
- Speed. No one wants to wait weeks for an investment decision. We get it, and we’ve adjusted our processes accordingly.
We think that early stage crypto projects benefit from having a diverse range of supporters and early investors. And we think we can bring a unique and useful value proposition to the table.
There has never been a more exciting time to start a crypto project. If you’re building something in Web3, we’d love to meet you.
GM!
John, Jax, Craig, Elicia & James
*** Blog post cover art by John Karel @jjjjjjjjjjohn
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