On the other hand, obviously we’re very different. We’re much smaller. So our scale is also small. A16Z built this team of networked services—they service fintech companies, enterprise, consumer, crypto. I was part of that, but we’re not going to offer a whole suite or network of services. We do have some exceptionally skilled operators, and we’re going to look to deliver those “hero moments” where we can really uniquely add value to the projects we invest in.

Your fund has been described as a truly “crypto-native” fund, whereas at other firms, like A16Z, there might be a second fund or even a third fund devoted to crypto investments, but that’s not the main purpose of the firm. How concerned are you about any kind of lack of diversification? Like if crypto crashes, or if Web3 becomes a series of functions or features built on top of a preexisting web, as opposed to leading to the formation of entire companies—

You’re asking about our decision to myopically focus on or go all in on crypto and Web3, as opposed to having different verticals and options. I’ve spent almost a decade in this space, and I certainly see this as the future. So I’m not worried about the opportunity set. And I’m also not worried about diversification because of how dramatically the space and the ecosystem have grown. Let me tell you a little bit about what I mean by that.

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In the early days of the internet, you wouldn’t have just said, “I’m going to make a social media investment or a cloud investment.” You would have had your developer tools play, your cloud play, your social media play. Similarly, here it’s an ecosystem. We plan to invest in the three layers of the stack. Layer one is Web3 protocols. Layer two is around interoperability, scalability. And then layer three is the application layer, kind of the consumer-facing layer. And crypto-adjacent is very much in our thesis. We think things like identity, like security, like insurance will become very important categories.

I think our decision to hold tokens and also to hold equity is itself diversification within this ecosystem. You know, there are a lot of funds out there that are doing crypto investments, but they are not participating in the token ecosystem. We will be long-term holders of tokens.

For people who are not so deeply steeped in the world of Web3 and crypto and NFTs, what does it mean that your firm is going to hold tokens?

When I say hold, I mean as opposed to being traders, because you do have crypto hedge funds that are trading in and out positions of tokens. Obviously, there can be fluctuation in price. And we don’t plan to do that. We plan to take long-term positions. Because we’re a venture capital firm, we make what I used to say were 7- to 10-year bets. I think the way crypto moves so quickly, maybe that’s more like 5-7 years now.

But it’s still long-term focused. People sometimes ask me, “Well, couldn’t I just go buy tokens myself?” Whether that’s Ethereum, whether that’s Solana … I’m talking about making investments in ecosystems. It’s not enough anymore to just show up and make an investment. You’ve got to actively participate in the governance of these protocols.