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https://www.youtube.com/watch?v=GCKe8a51Ugs

[00:00] What's good colo friends?
[00:02] Welcome on our colo podcast and it's another episode where we have a very very interesting guest here.
[00:08] I had David Gan.
[00:13] Yeah, thanks for having me.
[00:15] Thanks for coming.
[00:18] And David, you were early to Polka Dot, Orbitum, Scroll Circle, Ono, Mega, ETH.
[00:23] You've been early to almost every crypto projects out there.
[00:26] Why are you that early?
[00:29] And what do you think people are not catching up?
[00:31] Yeah, I mean to the name of the fund inception, we try to get into projects at the very inception of their founding.
[00:37] So we like to work with founders at the inception of their idea and help them sort of scale the project forward.
[00:43] I think for us, you know, we have really good founder access just being in industry for 10 plus years now and have a vast amount of sort of founder networks not only in Asia but here in the US as well.
[00:55] All right, nice.
[00:57] I I I love this answer and David like just a quick one.
[00:59] You were you you were in Morgan Stanley Hu
[01:03] and bunch of other projects.
[01:04] What stopped deploying others people money?
[01:06] and like what you made to stop deploying other people's money and start your own fund and could you maybe just you know go deeper into inception capital and what are you guys cooking out there?
[01:16] Yeah definitely.
[01:16] So you obviously when I started my career I was investment banker you know we have large number of assets who manage on behalf of the bank but mostly were focused on M&A and really for me to really get averse in a number of industries from the get-go in gas you know real estate consumer tech you know a lot of the sort of new emerging trends that's happening not only within sort of the Asian markets but you know broadly across emerging markets as well so you know I did that for two years for launching my own startup which is sort of in the event-based social networking space.
[01:50] It was uh effectively the meetup.com but for the the southern markets in China ended up selling the company and moved on to do venture capital investment and
[02:03] you know started to invest uh very early on in 2016 where I learned of sort of the web 3 crypto space and um started to dive deeper into it researching it and ultimately participating in a couple ICOs myself.
[02:15] It wasn't until I joined uh Hobby as sort of the head of investments and also global strategy that I sort of invest in the in a more institutional format investing in early stage projects and also funds uh on behalf of Hobie the exchange which is the large exchange at the time uh before sort of Binance and Coinbase really started to get traction.
[02:39] Uh so from there I effectively did four years at Hobi uh leading spearheading uh about 60 investments across uh early stage uh equity and token investments and also invested in about five crypto funds during my time there.
[02:57] uh and late 2021 uh I spun out of Hobi and started Inception Capital which kind of mirrors
[03:03] a lot of the early stage strategy that I did at Hobie just investing in projects super early on giving them hands-on support and then subsequently also launching fun of funds that invest in emerging managers um to help them with um not only just really good deal flow access that we have but help them scale the fund to be more institutional um going forward.
[03:28] and and scaling them uh sort of their AOE as alongside of that as well.
[03:31] All right.
[03:31] And at the beginning your phone was called OP Capital from what I found out and then it changed to Inception Capital.
[03:39] Can you actually tell me what changed?
[03:41] Was it just the name or the thesis has actually changed as well?
[03:43] Yeah.
[03:43] So I think for us when we started the name you know we obviously want to be very crypto native you know having crypto in the name and telling everyone that we were obviously 100% focused on crypto and the native assets itself what we realized that actually having it in the entity and the sort of the setup documentation of the firm it was very
[04:05] hard to open bank accounts in the US having crypto in the name.
[04:10] So, you know, one part of the name change was so that we have better access to institutional banking and custody services.
[04:17] Um, but also when people think about OP crypto, they also tied it to the optimism ecosystem fund, right?
[04:24] Or like something, you know, to do with optimism, which was a popular project at the time.
[04:29] And a lot of people just didn't really resonate with the name as much as we had hoped people would be.
[04:34] Um which is why we kind of renamed it to inception which is obviously a lot more uh sort of indicative of like the investments that we're doing at the very earliest sort of ideulation stage where we get involved and invest in early stage projects but also making it more sort of institutionalized and you know friendly to be able to be on boarded by the US banks and whatnot and also we're looking at a bunch of like crypto and crypto adjacent opportunities as well so that our investment thesis hasn't changed but I will say that it has
[05:07] evolved and be more sort of um comprehensive to include you know other sort of crypto and digital assets uh adjacent opportunities as well.
[05:17] Okay.
[05:17] Okay.
[05:17] I love it.
[05:17] And let's dig deeper and go straight to the numbers.
[05:22] You got Inception Ventures at 50 mil from what I know and Fund of Funds at 30 mil.
[05:27] for someone who doesn't live in VC state of mind, what does each one actually do and why do you run both at the same time?
[05:36] Yeah, I think you know first of all that's sort of the strategy I deployed a hobby you know I deployed roughly around the same number of uh assets and capital during my time there.
[05:46] So I raised funds that kind of is able to just take sort of some of the the previous investment strategies I had that I built out over at Hovi.
[05:55] I deployed roughly you know 30 to$50 million on the venture side and uh roughly uh 20 to $30 million on the funnel fund side.
[06:05] Uh so that kind of is
[06:08] In line with you know how big each of these vehicles are at now.
[06:10] Uh when I have started it and took outside capital.
[06:16] But you know these two obviously are very different vehicles but at the same time very synergistic to each other.
[06:22] On the venture side we focus on early stage preede and seed type of investments.
[06:25] I think previously when we started to just get off the ground, we follow on a lot of the more marquee investor base and really just build a sort of quickly build a portfolio of projects and founders that we started to get exposure into.
[06:41] But nowadays what you know our more comfortable SP spot is really leading and taking a high conviction bet and investing in some of these uh up and coming projects especially building building towards the emerging markets.
[06:53] And our comfortable sizes 1 million to 1.5 million that kind of leads a preede and seed stage at you know 20 to $30 million valuations at the seed and sub $20 million valuations at the preede.
[07:09] And at the fund side you know we typically write $3 million checks to help anchor or co-anchor some of these emerging managers and a lot of the managers that we invest in are between 30 to $50 million in AUM.
[07:23] Okay.
[07:23] Okay.
[07:23] And you already answered my next question by showing what your check is.
[07:28] What I actually wanted to ask you in addition to that is would you prefer to have 20 big bets or 50 smaller ones?
[07:36] Like what is your strategy when it comes to your portfolio?
[07:38] Yeah, I would say like funds should get more and more concentrated over time.
[07:44] I would say it's really hard to be concentrated right off the bat when you just start a fund because I think when you kick it off, you have zero portfolios, you have nothing within sort of the core sort of investment vehicle as it stands.
[07:56] So there's not very much uh portfolio synergies.
[07:58] So I would say that you know we kicked off the fund by writing smaller checks and eventually getting more and more conviction over time as we build the portfolio.
[08:07] So, I think that's
[08:09] Sort of what we're we're geared towards.
[08:11] Um, it's not always sort of something that is fully concentrated from the get-go, but you know, building conviction, building concentration over time as the fund grows, as you sort of pat out your thesis, as you I think you're doing a little bit more of experimentation in sort of the first year or two years of the fund.
[08:29] And I think as you sort of build a name, build a reputation and find ultimately uh the type of founders that you ultimately work best with, then you start to lead and build higher conviction deals.
[08:41] And when it comes to the founder, maybe you can showcase like what is your what what are your picks when it comes to founders?
[08:47] Which sort of characteristics are you looking at while understanding is this founder a legit one or not legit one?
[08:55] Yeah, I I would say um we care a lot about founder market fit versus like product market fit.
[08:59] So I think a lot of times we'll look at new and interesting verticals that you know we want to sort of get exposure into and we try to find the best founder with the most relevant.
[09:11] tangible skill sets to be building in this particular vehicle.
[09:13] and also I think it's also important to make sure that we are a good fit to the founder as well.
[09:18] right we don't really want founders that just looking for capital or just for someone to uh give them more runway.
[09:24] I think ultimately if there is a synergies as to like what we're able to help with.
[09:29] um whether it's distributions, whether it's uh uh exchange listings, whether it's a lot of sort of our Asia um Pacific Intel, whether it's sort of our connections uh within the space that can help them really get better sort of uh product traction over time.
[09:49] You know, those are the things that we provide as value that adset.
[09:52] We found we like to found finders as quite complimentary to the resources that we're able to provide.
[09:59] and they obviously are uh the experts in whatever vertical they're building.
[10:04] and and we can just kind of be an extension of their team to just help them scale and help them ultimately ship the product.
[10:10] Okay.
[10:10] Maybe I can ask you to name top
[10:12] three characteristics of the founder while you analyzing them.
[10:18] So like which sort of skills maybe background like whatsoever what comes to your mind when you think of yeah this guy is the fit for us.
[10:26] Yeah I would say beyond all else is like passion like truly truly passion for whatever product you're building and to whatever problem that you ultimately want to uh solve.
[10:39] There usually is a problem that I think one particular founder has faced over and over again.
[10:43] It's kind of a problem that he really wants to tackle.
[10:45] he probably has some type of life experience that caused him to have you know this type of problem to arise either within his life or within sort of the people around him and I think it's his own obsession to be solving this problem.
[10:58] I think it's like the key characteristic like if he wasn't building this project to ultimately solve the problem, he will find to a way to solve this problem in other means.
[11:09] I I think second is it's kind of a level of relentlessness, right?
[11:12] like you don't
[11:14] ultimately want to sort of give up and ultimately like you know you don't sort of give in easily and it's something that you kind of want to commit yourself to and ultimately want to make sure that you know you're all in in building this thing that you're set out to do and third is just a really really like deep knowhow right I I think for for anyone that we chat with um obviously we've seen a lot of things uh in the investment scape uh and also you know doing our sort of field diligence and doing diligence like we've come to learn a lot about their competition or whatever they're they're looking to build now or sort of the market landscape they should absolutely know way more than us right so I think that's also a characteristics that we look for is you know not only for us to be educated but also to see that they're way more knowledgeable about particular space and you know having the resiliency to execute on that um beyond all all other sort of competition type of potential come forward.
[12:14] Love it.
[12:16] I remember the answer of one of the VCs I interviewed in the past.
[12:18] They said that if I was able to build a project myself, I wouldn't be investing.
[12:23] I would be building.
[12:25] So, I want the founders of the projects I invest in to be way smarter than I am and to have this belief in them, which is beautiful.
[12:32] And let's talk about something spicy like every from 2021 vintage has markdowns from the 2022 dragdown.
[12:41] And how is fund like like how is like how you guys actually dealt with that and what were you telling to your LPS about your DPI and TVPI at the moment?
[12:52] Sure.
[12:54] Sure.
[12:54] Uh I would say that obviously everyone that has raised your 2020 vintage is not doing so well you know just particular because we were very very aggressive in deploying 2021 2022 because they wanted to raise another fund in 2023.
[13:08] I think what is really differentiated about us and from what I understand we're probably one of the only funds from the 2021 2022
[13:16] vintage that's still deploying out of their first fund today right.
[13:21] So I think for us you know how to best understand it is that even though the fund was formed in 2021 we wouldn't be necessarily accurately categorized in a 2021 vintage because most of our investments actually were deployed in late 2022 to 2023 and 2025.
[13:38] Uh we didn't do that much uh investing in 2024 and early 2025.
[13:46] So I will say that you know because of that you know our sort of bets are actually diversified across you know a number of years right and we're still deploying you know five years in versus many other funds that are fully deployed in 2023.
[14:00] And that's why if you look at you know all of the sort of funding that happened in 2021 2022 most of those projects you know didn't do very well for obvious reasons.
[14:09] They were very high valuations and ultimately a lot of um you know squander a lot of money for just marketing things and and generally just
[14:17] not people that were serious about a space.
[14:22] you know most like the 2021 2022 vintage you know we in our fund we maybe only have like 15% of our exposure in the fund in in sort of those two years.
[14:31] so I would say even though sure like some of our companies and portfolios may be affected but you know at large um you know we're we're pretty spread out across you know the other vintage years.
[14:42] and that just gives us a more diversified uh exposure across many of the different vintages uh and years I would be investing and trying to find you know the best marquee projects out of those vintages.
[14:55] Okay, that's a very interesting story because I was actually always wondering what was happening back in the days and how we VCs were surviving this thing and what about the recent flash crash?
[15:04] Did it affect you guys anyhow and what was the reaction inside of the fund when everything happened?
[15:10] Yeah, I mean I think it affected us for definitely the projects that we've invested that were already uh listed on exchanges are
[15:17] already liquid.
[15:20] Uh but I think it's ultimately marketwide effect, right?
[15:23] But I think it affected the most are the hedge funds, right?
[15:25] They that they are actively trading tokens or they they're are paying with leverage and a lot of them got wiped out because we're a venture fund and we're pretty disappointed with our investments and all of our investments are equity first.
[15:39] uh investment um sort of exposures.
[15:43] You know, we we definitely had some marginal sort of effects for our portfolios, but you know, generally, you know, a lot of our uh portfolios are still staying stronger and still um you know, having good momentum heading towards uh the second half of the year.
[15:58] All right. All right.
[15:59] Because yeah like actually when this you know big boom is happening and when the entire market is thinking that everything is over I'm always super interested how it looks on the side of the people who are actually investing into this projects and how the afterparty looks like.
[16:13] So thank you for sharing the perspective of that and kind
[16:19] of opening the curtain for us.
[16:22] And let's maybe come back to the structure of the fun.
[16:23] And while I was researching you, I actually found out that your LP base is super unusual.
[16:28] You have Galaxy and Animoko on one side and on the other side you have Bill Aman, Alan Hward and other individuals.
[16:36] And how does actual mi mix change how you run the fund?
[16:39] And is there any like is it giving you any consequences or everything is smooth?
[16:48] Yeah, I would say that LPS are very very friendly.
[16:51] Um they obviously are there when we need support.
[16:54] So we kind of divided up our LP base into people that are strategic to um you know our fund in terms of when we do investments you know they can provide a lot of strategic value not only you know giving us sort of support uh in helping us sort of scale our portfolios to a more mass market or just different sort of branding attachments that we have.
[17:16] uh but you know on the sort of more
[17:21] individual sort of side whether it's Bill Aman or Anna Howard you know they obviously give us more of an institutional look in that you know we look to be a very much legacy firm going forward and we want to be as institutional facing as much as possible.
[17:35] So you know we obviously uh really appreciate all the support LPS have given us and we try to obviously give a lot of value back in terms of not only our insights in the space but we consistently you know look to share some of the things that we're investing in along with them and try to get them involved uh more so in the fund than than just being a passive LP.
[17:58] So would you call that all your LPs are some sort of smart money for you?
[18:01] Yeah, I mean I would definitely say that most of these people they're either institutions or they're highly accomplished individuals.
[18:08] So, you know, we were able to be fairly selective in, you know, who we choose our investor base to be uh in in our venture fund.
[18:17] So, you know, ultimately, you know, with all of those people involved, um we our
[18:23] Fund was 2x oversubscribed in 2021.
[18:26] So in that, um, we were able to gate a lot of LPS that we didn't feel was, um, really good sort of long-term value.
[18:35] So we we just really just, you know, want to work with the best of the best people at, you know, the LP base that we have.
[18:41] We're really appreciative that we're they're here with us in the long run and, you know, we definitely have a lot of synergies together.
[18:47] I love it. I love it.
[18:49] And let's come back to the projects that you guys invest in.
[18:52] And the thing that I wanted to ask you is, what do you consider the best win in your portfolio and not the biggest markup?
[18:58] What is important?
[19:00] Just name the project and the entire process with it that you actually feel like is the biggest win for you guys.
[19:07] Yeah, I mean, they're they're actually about to launch tomorrow.
[19:09] So Mega E is definitely one shout out I want to do.
[19:13] You know, they've been very resilient.
[19:15] You know, we were one of our very first institutional checks, um, from early days 2021 where, you know, there were just a small sort of PhD academic team that was
[19:25] building for new technical solution on the layer one protocol side.
[19:31] Um so it has come really a long way, three years in the making since uh their initial founding and they're about to launch tomorrow.
[19:37] So, you know, it's definitely something that we're very excited about and we've been supporting them for all these years and finally uh we get to see all of their hard work pay off uh in their launch tomorrow.
[19:48] All right.
[19:50] Nice.
[19:50] And what you can call the biggest miss of yours if I can ask it.
[19:53] Do you have any project in your mind that you feel like is the biggest disaster that you guys got involved in?
[20:00] Yeah, I wouldn't say anybody is a disaster, but definitely one of the misses that we had was um so we invested in the founders of pump fund in their first project, you know.
[20:09] So, but I I think ultimately when the first project that they built was NFT aggregation play that ultimately didn't work out and they spun out to build pump fund, you know, we kind of missed out on that opportunity.
[20:23] So, you know, we picked the
[20:26] right founders. We just didn't pick the
[20:28] right I guess we're too early to uh back
[20:31] the founders in when they were doing
[20:32] their initial project, but didn't get
[20:34] involved uh in pump the second time
[20:37] around. So, I would say with that um
[20:39] that was probably one of our biggest
[20:40] mission.
[20:41] Mhm. Okay. I love this answer and
[20:44] actually it's super interesting that you
[20:46] actually picked the right founder but
[20:48] not at the right time. Were you guys
[20:50] actually ever thought of investing not
[20:54] in projects but in founders themselves?
[20:56] I've been hearing that recently there
[20:58] are many many talks about investing in
[21:00] person with the let's say upcoming 10
[21:03] years when you just find an interesting
[21:05] uh individual and you really feel like
[21:08] they are going to achieve something. Do
[21:10] you have any thoughts in this direction?
[21:12] I mean total
[21:13] definitely. Yeah, I think it's
[21:15] definitely something that, you know, if
[21:17] it's possible, you know, we'll
[21:18] definitely consider, but I think it just
[21:21] with sort of the current way that
[21:22] investments have been structured
[21:24] historically in the past, right? It just
[21:26] not feasible to invest in an individual
[21:28] because, you know, you can't, you know,
[21:30] just take ownership of a person, right?
[21:32] So I think right now just unless sort of
[21:34] the structural changes um on sort of the
[21:38] investment side I don't think right now
[21:40] that's something that we're able to do
[21:43] as much as we want to be able to do
[21:45] that.
[21:45] All right. All right. And um you're like
[21:49] I've seen a lot of Asian funds that say
[21:52] that we are bridging the gap between
[21:54] east and west and actually you know like
[21:56] trying to help founders to understand
[21:58] the culture. what Inception is actually
[22:01] bringing to Asian founders while they're
[22:03] trying to go to the world market and
[22:05] what do you guys bring to European let's
[22:08] say founders in order to kind of get
[22:11] them in touch with the Asian market.
[22:13] Yeah. So I think for us uh especially
[22:16] for the Asia uh founder base you we'd
[22:18] like to be the first institutional
[22:20] capital from the west right a lot of
[22:23] them you know obviously they have access
[22:24] to Asia based capital but we want to not
[22:28] only sort of be one of their first sort
[22:31] of institutional checks to be investing
[22:33] in them but we can also bring in the
[22:36] likes of like Andrea you know Paradigm
[22:38] Multicoin all these sort of big
[22:40] institutional funds in the US to invest
[22:43] alongside with us but you other than
[22:46] that you know we have you can help them
[22:48] with um a lot of the sort of local
[22:51] partnerships um within sort of the US
[22:53] capital market so I think it's like the
[22:56] dual arbitrage opportunity right whether
[22:58] they're Asia founder looking to come
[23:00] west or they're a western founder
[23:02] looking to go east you know we try to
[23:04] sort of bridge those gaps and help them
[23:07] with distribution partnerships and
[23:09] upstream capital
[23:10] okay okay that's a very good answer and
[23:12] I love that you guys are actually
[23:14] helping your projects. It's not just the
[23:17] straight money. I would call it more
[23:18] some sort of smart money because I see
[23:20] right now that more and more founders
[23:22] they're not looking just for the
[23:24] paycheck. They are looking to get some
[23:26] help in developing their products and of
[23:29] course going to the market that they are
[23:30] not aware of is something really really
[23:33] interesting and let's jump back and talk
[23:37] about narratives. I see AI and crypto
[23:42] crypto AI merged together in every
[23:45] second pitch deck that I see right now
[23:47] and cutting it through what's real and
[23:50] what's just narrative theater in here.
[23:53] Yeah, I mean there's every every couple
[23:55] months I think there's going to be a new
[23:57] narrative out there, right? I think most
[24:00] narratives are there for a reason, but I
[24:03] think it's like those are already sort
[24:05] of projects have already taking shape.
[24:07] there have already been sort of proven
[24:10] projects that kind of have really built
[24:11] meaningful traction and that's how these
[24:14] narratives come to place is that people
[24:16] think that if there's one sort of really
[24:18] good company that's really taking off
[24:20] getting really good market traction
[24:22] there can be ton of others right which
[24:24] typically is not really the case right
[24:26] you usually have one projects that
[24:28] really sort of expand in terms of their
[24:30] growth and really has a high growth
[24:33] octane sort of trajectory but a lot of
[24:35] times you know us as investors We don't
[24:37] want to just chase what's hot because
[24:39] it's really you're not able to get um
[24:42] sort of a vertical leader already
[24:44] because it's already too far gone. But I
[24:46] think we we like to invest in things
[24:48] before they become hot narratives and
[24:51] try to invest in things that maybe are
[24:53] underlooked or overlooked right now but
[24:55] eventually can be areas where people can
[24:58] you know dive into and there's uh peak
[25:01] interest in those areas. So for for a
[25:03] lot of times narratives is the best way
[25:05] to help existing projects or portfolios
[25:09] get market traction but it's not a good
[25:11] way to follow in terms of um you know
[25:14] investing in the space.
[25:16] Okay. And like let's give an example.
[25:19] I'm looking at Tron who launched B.A.I.
[25:23] positioning itself as blockchain native
[25:25] AI infrastructure and you guys backed
[25:27] Skyfire and Apacity in the space and is
[25:31] it like in in your opinion is it just an
[25:34] like is it just a layer on top like
[25:37] layer on top of blockchain with AI that
[25:40] makes marketing or is it the actual
[25:43] onchain AI category? So do you feel like
[25:46] AI is going to the direction of being
[25:49] actually decentralized or it's all just
[25:52] marketing flow?
[25:52] Yeah. Well, I think there's definitely
[25:54] you uses for decentralized AI, but at
[25:56] the end of the day, right, AI is a very
[25:59] sort of primitive and frontier
[26:00] technology that you know we kind of use
[26:03] like just like how the internet was
[26:05] first created, right? It makes things uh
[26:07] super optimized, super efficient. And
[26:09] for Skyfar in particular, right, it's
[26:12] building the agenic payment
[26:13] infrastructure, right? So it's not
[26:15] necessarily an AI itself, but it's
[26:17] building the infrastructure substack
[26:19] layer for AI agents to be more
[26:22] effectively be able to do payments um on
[26:25] behalf of you in different types of uh
[26:28] e-commerce and shopping experiences. So
[26:30] definitely that is a key infrastructure
[26:32] to push the wave of agenic payment
[26:35] forward and a lot of sort of major
[26:37] institutions like Coinbase, Visa, you
[26:40] know, Mastercard are utilizing them to
[26:42] just make their backend infrastructure
[26:44] better and more suited to to um adopt
[26:48] sort of agent AI agentic payments uh
[26:50] going forward. And here when we talk
[26:53] about agents and payments among agents
[26:56] like there are very many people who
[26:57] still do not understand agent economy
[27:00] and how this system looks. Maybe you can
[27:02] just share your perspective cuz VCs are
[27:04] usually the ones who understand very
[27:06] complex things and can describe them in
[27:09] very simple words. So where do you think
[27:12] AI agents are going to develop in the
[27:15] upcoming future? So what's going be
[27:17] what's going to be the sandbox for them?
[27:19] Because open claw recently is going down
[27:23] and um how do you think crypto should be
[27:26] involved in here? Because like why just
[27:28] why don't Stripe just launch their own
[27:30] payment infrastructure for AIS? Why do
[27:32] we need crypto in here?
[27:34] Yeah. Yeah. Well, I think first of all
[27:36] um you know Stripe is not an open
[27:38] network, right? Like you know Stripe
[27:41] can't be just not everything is
[27:43] integrated into Stripe. First of all, I
[27:45] think you know you need a more open
[27:47] blockchain infrastructure for um just
[27:50] payments going forward and and I think
[27:52] right now a lot of the online sort of
[27:55] experience is not as smooth as it should
[27:58] be, right? Like just imagine, you know,
[28:00] the user experience uh when we when we
[28:03] go to a supermarket or when we go to a
[28:06] restaurant, right? All we do is we ask
[28:08] them what we want and they give it to
[28:10] us, right? But I think a lot of times
[28:13] when you buy things online or or you try
[28:16] to have exchange or transaction, there's
[28:18] multiple hurdles that you have to do and
[28:20] a lot of different websites. You enter
[28:22] your address, you enter your credit
[28:23] card, you enter your name, you enter
[28:25] your all sorts of type of information.
[28:27] It's not as easy as you you want you
[28:30] click it and and done, right? But like
[28:32] eventually I think the agenic sort of
[28:34] payment um sort of workflows will be um
[28:38] automated just like how we're do in
[28:40] physical life right we look at the item
[28:42] and we pay and and that's it right so I
[28:45] think going forward um you know
[28:47] everything will just cut out all the
[28:49] sort of nuances um that has to happen
[28:52] for the transaction to happen and that's
[28:54] how it should be and that's where agents
[28:55] are able to sort of uh be in the
[28:58] background to kind of navigate all the
[29:00] sort of uh process processing that needs
[29:02] to happen in order to get your end
[29:03] product.
[29:04] Okay. Okay. And um looking forward to
[29:09] development of AI in general, do you
[29:11] have any interesting projects on your
[29:13] radar that are actually catching
[29:16] retail's attention or is it more
[29:18] institutional at the current point in
[29:19] time? Still
[29:20] uh catching retail's attention for for
[29:22] which vertical? for AI in crypto in
[29:25] general because you know we see very
[29:26] many different projects that are
[29:28] screaming AI and so I would maybe
[29:31] specify the question so which projects
[29:34] are on your radar and why do you think
[29:36] they are catching retail's attention
[29:39] when it comes to agents AI development
[29:42] in general decentralized AI and
[29:45] everything that is somehow
[29:48] drawing the lines between crypto and AI
[29:50] right now
[29:51] yeah I mean we don't we don't really
[29:52] look at things that we have to like
[29:54] force the two uh spaces to converge,
[29:58] right? You know, it doesn't have to be
[30:00] always a AI crypto project for us to
[30:02] invest in, right? If it's really good on
[30:05] the AI side and it doesn't need crypto,
[30:07] then great, right? And if it's something
[30:10] that just pure crypto that doesn't need
[30:13] sort of some of the AI elements of it,
[30:14] then it's also good, right? Especially
[30:16] on the more financial services side of
[30:18] things. So I think we we obviously look
[30:21] at different areas that can able to
[30:23] enable bulls right I think a lot of that
[30:25] we try to look for ways to automate the
[30:28] backend processing right there's a lot
[30:30] of things that needs to be done on
[30:32] inventory management right on like sort
[30:34] of like anything sort of that optimizes
[30:37] the backend infrastructure experience um
[30:40] and a lot of whether it's like these
[30:42] brick and motor stores or restaurants or
[30:44] like a lot of these sort of small
[30:46] businesses need a lot of automation And
[30:48] those are the things that we would look
[30:50] to automize first because these are sort
[30:53] of what retails are facing each and
[30:55] every day um in terms of their uh sort
[30:58] of interactive and user experience.
[31:00] Okay, that's a very precisely explained
[31:03] situation. I love it. And uh let's move
[31:07] from AI to the next point that I have on
[31:10] my mind because I feel like we're pretty
[31:12] clear about everything that is being
[31:14] built around AI. So to our listeners if
[31:18] you have any thoughts you can drop it in
[31:19] the comments and also let us know what
[31:21] is your favorite cryptoi project and
[31:23] share your perspective on that. What I
[31:26] actually wanted to talk to you is
[31:28] prediction markets. Prediction markets
[31:30] had their momentum with poly market
[31:32] around the US election. And what I
[31:36] wanted to ask you, do you think that
[31:38] it's the real industry that is
[31:41] developing right now or is it just a
[31:43] feature of two apps that caught a
[31:45] cultural wave?
[31:46] Yeah, I mean I think it's like I
[31:48] wouldn't say it's sort of it caught a
[31:50] wave. Obviously, prediction markets just
[31:52] gives you a lot more
[31:55] um accessibility into the financial
[31:58] markets as a whole, right? So, instead
[32:00] of just only trading financial
[32:02] instruments within the financial
[32:03] markets, you're able to trade pretty
[32:06] much anything, everything, right? I
[32:07] think that's the whole goal of
[32:08] prediction markets. Right? Now, you're
[32:09] kind of trading on different sort of
[32:12] events that actually happen. And you
[32:14] know, that's sort of the first iteration
[32:16] of prediction markets. But eventually I
[32:18] think the the way that prediction
[32:20] markets will involve is just like
[32:21] anything that you you want to trade
[32:24] where you want to put your money in you
[32:26] know there is a market for where you
[32:28] want to be able to put your money in
[32:30] right I think right now just like
[32:32] everything that we can invest in or we
[32:34] can trade or bet or gamble or all these
[32:37] things it's very arbitrary right it's
[32:39] like there there's very sort of big
[32:42] markets on both sides and there's not as
[32:44] much of the longtail um sort of bets I'm
[32:48] able to do that kind of is particular
[32:51] that I resonate with right whether it's
[32:53] uh you know a sports game right whether
[32:56] it's like you know a a concert that's
[32:59] coming and sort of the results of that
[33:01] right or you know any sort of thing that
[33:03] that comes down to like arts and
[33:05] entertainment right there's big fan
[33:07] bases for so I think that's sort of the
[33:09] ultimate goal of predition markets and
[33:11] you know that that will be utilized by
[33:13] all sorts of people not only people
[33:15] within sort of the financial markets.
[33:17] Okay. And what about the projects that
[33:19] are built on top of prediction markets?
[33:21] Because while looking at poly market, I
[33:23] was already talking to a couple of
[33:25] projects that are doing the
[33:26] infrastructure on top of it. Like let's
[33:29] give an example of Gander Finance the
[33:31] guys who are making some sort of liquid
[33:33] staking for prediction for poly market
[33:36] bets and are you guys looking at any
[33:39] sort of projects like that in inception
[33:41] capital and if positive what would make
[33:44] you write a check in 2026 for prediction
[33:47] market related project? Yeah, I mean I
[33:49] think it's going to be a big space going
[33:50] forward. All sorts of type of
[33:52] infrastructure plays um are being built
[33:54] on top because it's like a whole
[33:56] ecosystem in itself, right? It just like
[33:58] you know when you look at the financial
[34:00] markets today, right? You know there's a
[34:02] different banks, there's a custody
[34:03] providers, there's a settlement layer,
[34:05] right? There's a brokerages, right?
[34:07] There's all different types of um
[34:10] players that kind of feed into the great
[34:13] um sum of financial markets. And same
[34:15] thing with producer markets. We're we're
[34:17] obviously looking at things that really
[34:20] complement to uh really scale the
[34:22] prediction markets space as a whole,
[34:24] right? So we're looking at things that
[34:27] on the lending side and things on the
[34:28] liquidity layer side, things on the
[34:30] market making side, right? So all these
[34:32] sort of things that um you know make
[34:35] sort of prediction market is better and
[34:36] more efficient are definitely
[34:38] infrastructure plays that we're looking
[34:40] at analyzing.
[34:41] Okay. So would you consider this
[34:44] prediction market space as something
[34:46] that worth inception capital's attention
[34:48] or you guys are not that focused on this
[34:51] entire industry?
[34:52] Yeah, I wouldn't say that like it's
[34:53] something that we spend all of our time
[34:55] on but but it's definitely an
[34:57] interesting subject. I think we just
[34:59] look at high velocity type of growth
[35:01] areas and whichever thing uh is growing
[35:04] really fast, we try to find the root of
[35:08] um how it can grow even faster and sort
[35:11] of finding uh different investment
[35:13] opportunities that can better stimulate
[35:15] that growth.
[35:16] While prediction markets are not that
[35:18] much in your zone, payments and stable
[35:20] coins definitely are. You guys back
[35:23] Circle and Onondo to one two cleanest I
[35:28] would say institutional place in stable
[35:30] coins and tokenized assets and once
[35:33] stable coins are going to be everywhere
[35:36] and I would say that they are actually
[35:38] everywhere already. Where does the edge
[35:40] move? What's the next layer up you would
[35:42] say?
[35:43] Yeah, I mean I did I I think first of
[35:45] all stable coins I invested in both of
[35:47] these like nine and six years ago for
[35:50] both of these projects. So I think a lot
[35:52] of it is it definitely takes a lot of
[35:54] time to really develop to get market
[35:56] traction but you know I think at the end
[35:58] of the day right we need stable coins to
[36:00] be more heavily adopted across the
[36:02] emerging markets which is a big focus
[36:04] for us. So I think a lot of what we look
[36:06] for is like things that utilize stable
[36:08] coin to find a better way to operate you
[36:13] know the current financial stack. So
[36:14] things that revolve around payments,
[36:17] around remittences, around custody,
[36:19] around sort of crossborder
[36:22] um transactions, you know, all these
[36:23] sort of different things that that we
[36:25] want to sort of invest in that utilizes
[36:27] stable coins and utilizes um you know, a
[36:30] lot of the onchain infrastructure that
[36:32] makes capital markets more efficient as
[36:34] a whole. And when it comes to choosing
[36:36] the products that are built on top of
[36:38] it, uh like we see right now that every
[36:40] second wallet is trying to be a neo
[36:42] bank, every L2 wants to be a settlement
[36:45] layer. And how do you guys actually pick
[36:48] the winners in this very very broke
[36:50] category?
[36:51] Yeah. I mean, I think we try to look for
[36:53] things that other people aren't really
[36:55] looking at right now. So we don't want
[36:57] to invest in like if you have a way to
[37:00] like describe it that's like the same
[37:02] thing as another product but with a
[37:03] small tweak like that those are not
[37:05] things that we're looking at. We try to
[37:07] look at things that are kind of
[37:09] underserved or you know not even having
[37:12] a really good solution tool that you
[37:14] know we're really trying to trying to
[37:16] revolutionaryize
[37:18] how things can be done with sort of all
[37:20] these capabilities that weren't made
[37:22] available before in stable coins and
[37:25] sort of the onchain settlement layers.
[37:27] So I think for us you we always want to
[37:30] look at new jurisdictions and new
[37:32] frontiers as to like what sort of some
[37:34] of the new problem areas that arise and
[37:36] you try to find the most innovative um
[37:39] way to solve it but not really um
[37:42] sacrificing any of the efficiency
[37:44] element of it.
[37:45] Okay. Okay. So it's all about innovation
[37:47] and do you guys look at the geographical
[37:49] distribution because actually now stable
[37:52] coins are super popular in Latin
[37:54] America, Africa, Southeast Asia cuz they
[37:57] are the actual market fit in there
[38:00] because of the depreciation of the local
[38:02] currency and is like is inception
[38:05] actually deployed any of those
[38:07] geospecific place or you guys are not
[38:10] looking to the geographical side of
[38:12] things? Yeah, I mean we do a lot of
[38:14] things in Latime and Southeast Asia. I
[38:16] think those are like two areas that we
[38:19] understand very well. Um I've personally
[38:21] been to and spent a lot of time in
[38:23] Southeast Asia and more recently Latam.
[38:25] So, you know, with that, um, we see it
[38:29] really having a hockey stick growth in
[38:31] those areas and we want to invest in the
[38:34] founders that are really navigating and
[38:36] solving some of those unserved problems
[38:39] within those areas and u making bets and
[38:42] opportunities in those spaces.
[38:44] Okay. Okay. That's a clear answer. I
[38:47] don't have anything related to stable
[38:49] coins on my agenda anymore. So let's
[38:52] talk about inception from the
[38:54] perspective of founders. For the
[38:57] founders who are listening to us right
[38:59] now and we are very founder related
[39:01] podcast I would say if they want to
[39:04] pitch for inception capital like what
[39:07] what what what
[39:09] moments they should pay attention at and
[39:12] how to actually succeed in their pitch
[39:14] session. Yeah, I I think it's really
[39:17] identifying a problem that maybe many
[39:20] people are not that necessarily aware of
[39:23] but is something that is growing very
[39:25] fast and has really good sort of
[39:27] addressable market um for the future. So
[39:31] I think a lot of times you know you want
[39:33] to ultimately build something that
[39:34] solves something but ultimately has like
[39:36] really good economic value on top of
[39:38] that. So I think that's something very
[39:40] much to pay attention to because you
[39:42] don't want to just build a product for
[39:43] the sake of building a product. You want
[39:45] to build product that ultimately you can
[39:47] ship to the market and it's going to get
[39:49] traction and make the lives of a lot of
[39:51] people better and you're able to capture
[39:54] the economic upside from there.
[39:55] And we already talked about the
[39:57] qualities that founder should have. So I
[39:59] think we're pretty done with the founder
[40:01] uh when it comes to raising their fund.
[40:03] But actually what is super interesting
[40:05] for me is some piece of advice for the
[40:08] managers who are rising their first fund
[40:10] right now. What do LPs like you guys
[40:13] actually look for the track record
[40:16] network thesis and how to raise your
[40:18] first fund?
[40:19] Yeah, I I will say it's like kind of
[40:20] similar to being a founder, right? You
[40:22] have to identify a particular vertical
[40:24] and category that you know it's kind of
[40:27] untapped into that you have a very
[40:29] specific engine in and helps us build a
[40:33] separate and diversified exposure into
[40:35] that we otherwise don't have today.
[40:36] Right? So we don't want to just invest
[40:38] in another crypto fund. We want to
[40:40] invest in something that has you know
[40:42] vertical expertise that you're able to
[40:44] pinpoint areas which are maybe crypto
[40:47] adjacent and you know things that you
[40:49] know can leverage the blockchain
[40:51] technology. uh but doing so in a sector
[40:53] that you truly innately understand and
[40:56] um able to get a lot of value from.
[40:58] Okay, that's a very decent answer and I
[41:01] love that you are paying attention to
[41:02] that small details and not just talking
[41:05] white things and uh what would you like
[41:10] let's give a piece of advice for
[41:12] yourself back in 2021 while you were
[41:15] raising OP crypto like which sort of
[41:18] things you would change and which sort
[41:20] of things you will keep as they were. So
[41:22] back then I would say that you know I I
[41:26] think a lot of people even including
[41:28] myself was maybe a little little too
[41:30] caught up in the moment of like
[41:32] everything that's happening in crypto
[41:34] and I think the FOMO of missing out on
[41:36] some opportunities. I think a lot of
[41:39] times we did some investments so that we
[41:41] can build some strategic value or like
[41:44] we didn't want to sort of mix the
[41:46] exposure in a particular um really fast
[41:49] growing segment. But I think it's like
[41:51] ultimately what you want to do as
[41:53] investor just like stick to your lane,
[41:55] stick to things that you're good at and
[41:57] don't just branch out into doing
[41:59] anything. I think the best thing that
[42:01] wish I had told myself is just like
[42:03] learn to say no way more often. Right?
[42:06] If you're already saying no, a lot of
[42:07] times you should five times that, right?
[42:09] So like I think a lot of times it's like
[42:12] staying put on the opportunities that
[42:14] you shouldn't do and just not and just
[42:17] kind of conserving your capacity and
[42:20] really concentrating on the investment
[42:22] opportunities that is really fit for the
[42:25] fund and fit for your skill set. So I
[42:27] think as every manager there are certain
[42:30] type of skill sets that you're able to
[42:32] add value to a founder and a lot of
[42:35] times it's not for every single founder
[42:37] that that you uh come across and I think
[42:40] with that you need to have your own
[42:42] competitive value ad and advantage in
[42:45] identifying a particular sector or or
[42:48] partnering with a particular founder on
[42:50] investment. So, I think really just
[42:52] staying focused um and really just sort
[42:56] of kind of building sort of the the the
[42:58] brand and and making sure that that
[43:00] you're focused to the investment uh
[43:03] thesis as a as a whole.
[43:05] Maybe you can also give some piece of
[43:08] advice how to properly maintain the
[43:10] communication with the founders and the
[43:13] projects that you invested in. Maybe you
[43:15] can give the example of how you guys do
[43:17] it inside of Inception Capital and what
[43:19] you could recommend to other VCs.
[43:22] Yeah, I think for us it's um not
[43:24] everyone I think has the same luxury of
[43:27] having you know a somewhat bigger team
[43:30] when they first start off because you
[43:32] know I at Hobie who has 7,000 people I
[43:34] manage multiple departments of hundreds
[43:37] of people. So I've always been
[43:38] accustomed to managing a slightly larger
[43:41] team and um a lot of people maybe are
[43:44] not used to that because it it does take
[43:46] quite a bit of managerial expertise and
[43:49] and kind of being able to give autonomy
[43:52] to a lot of people to kind of go out and
[43:54] do their own things. So uh we have a
[43:56] pretty big platform team right so people
[43:58] that are very hands-on with the
[44:00] portfolios and you know helping them you
[44:03] know get partnerships helping them get
[44:04] users and helping them branding and
[44:06] marketing. So I think with that, you
[44:08] know, we just try to have different
[44:11] experts within the team for different
[44:13] functions and I think we really just
[44:16] built um a team of just really strong
[44:19] people that are having different skill
[44:21] sets all across our firm that we can
[44:23] leverage off of. So I think that's what
[44:25] we kind of build the firm from ground
[44:28] weight up to be a very sort of teamwork
[44:30] focused type of mentality rather than
[44:32] just one solo sort of investor type of
[44:35] uh uh platform. And um to finalize, I
[44:40] wanted to kind of touch the topic of
[44:42] development of the market in general.
[44:45] Like people are saying that crypto is
[44:48] dead every year and then the next year
[44:50] they repeat it again and then they
[44:52] change their mind again. And what do you
[44:55] think is the vector that this industry
[44:58] is taking now? And do you agree that the
[45:02] bubble of crypto that lasted for seven
[45:05] years is over? And there is no longer
[45:08] such thing as easy money in this
[45:10] industry. And that the founders and
[45:13] retail guys and basically every crypto
[45:16] enjoyer should look at more I would say
[45:20] institutional projects at the projects
[45:22] that are bringing the actual value to
[45:25] the table and generally trying to help
[45:28] make people's lives easier.
[45:30] Yeah. I mean I wouldn't say that there
[45:32] were easy money anywhere but I would I
[45:34] do definitely say that like the sort of
[45:37] large multiples of returns very quickly
[45:40] uh are no longer going to be as frequent
[45:44] right so I think like as the industry
[45:46] matures there'll be less volatility in
[45:48] the price movement and just um in price
[45:51] action in general so obviously I think
[45:55] for things that ultimately were able to
[45:57] get traction in long term they have to
[45:59] be paid they have to get
[46:01] institutionalized and they have to work
[46:03] with you know traditional partners
[46:05] outside of the crypto space will
[46:07] ultimately get um you know sort of that
[46:10] sort of that brand appeal and ultimately
[46:12] get um traction in terms of u where
[46:15] their product is uh being sold to. So I
[46:18] think with that um you know it's never
[46:20] been easy at all for for everyone and
[46:23] it's only going to get harder and I
[46:24] think that's uh the whole point of any
[46:27] industry maturing. So I would say that
[46:30] you know you as a investor or founder
[46:33] you should also grow uh in within sort
[46:36] of your mentality to match that of the
[46:39] space that is growing and maturing as a
[46:41] whole. So you know every uh every sort
[46:44] of instance of a market shift will you
[46:47] will lose a lot of people and the people
[46:48] that stay on will get stronger and
[46:50] stronger.
[46:51] Couldn't expect a better answer and it
[46:53] is a perfect final for our today's
[46:56] conversation. Thank you
[47:00] and of course looking forward to talking
[47:03] to you again. And guys remember that at
[47:06] Colo we show faces not just talking on
[47:08] his spaces. Thanks for watching. Cheers.