Analysis of multicoin capital: eight methodologies for becoming a contrarian investor

Chain catcher 2022-04-05 23:59:58 阅读数:953

analysis multicoin capital methodologies contrarian
Multicoin Capital Now it is one of the most successful investment institutions in the venture capital industry , The author of this paper Multicoin Capital The investment theory and its internal process are analyzed in detail

The original author :Mario Gabriele(The Generalist founder )

The original title :《Multicoin Capital: How to be a Contrarian》

compile : Linqi , Chain catcher

Every venture capitalist wants to be a contrarian investor . many Medium Articles and Twitter Posts are written in pursuit of this coveted reputation . This interest is not just out of vanity , After all, creating an anti traditional image is quite flattering .

It is said that , Venture capital is a pursuit 「 Non consensus and correct 」 The game of . The second point is easier to understand : If you're wrong , You can't make money . For starters , The importance of non consensus may be more difficult to grasp . Due to the uneven distribution of venture capital , Faith alone is not enough , You have to do things that others laugh at or ignore , It's right to stand firm . Only these opportunities can produce enough value dislocation , Bring huge returns , After all, the wisdom we all have will only produce a small amount Alpha The opportunity of .

Multicoin Embrace this truth . It's not just right ( Up to a point ), And it's also true in some objections . Few companies are willing to stick to their beliefs for a long time .

Multicoin How to do it ? What does it mean to run a fund that really bucks the trend ? What makes the investment team so reliable in finding and investing in those 「 Alien species 」 Winner ?

We will explore from beginning to end Multicoin Investment process , involve :

Form investment theory : Some funds don't have their own investment theory , More inclined to invest in great founders who can come up with new ideas , But it's not Multicoin Style .

Looking for opportunities : This involves making some noise . once Multicoin With investment theory , They will look for projects with similar ideas . At the same time, it will make some 「 The noise 」, Cause a commotion .

Evaluate investment :Multicoin Only fund what it thinks is 「first-order correct」( First order correct ) The enterprise , Even if sticking to this rule will lead to the loss of some projects .

Show blind spots : In order to make the team think more keenly , And correct the weakness of investment theory ,Multicoin An investment committee has been established , It works like a debate contest .

Scale bet : once Multicoin Decide to invest in a company , It will consider how to determine the scale of investment .

value-added : With a few exceptions , Every investor tries to support the company they invest in .Multicoin The relationship with these founders is particularly deep , And actively provide support .

Actively redouble :Multicoin Part of our investment strategy is to reinvest in high-quality investment projects , Even if other VC In the exit , But it will do the same .

The first 1 Step : Form investment theory

Among the ways you compare venture capitalists , One of the most illustrative is to put them in 「 Opportunism 」 and 「 Theory driven 」 Between .

Opportunists believe that fundamental innovation is unpredictable . Recognize this ignorance , The best way is to find visionary Entrepreneurs . The most basic posture is a kind of reactivity and acceptance : You're keen to be surprised by originality and sexuality , And willing to evaluate what appears in front of you . just as Multicoin cofounder Tushar Jain Described as , This is related to 「 stay Tinder slide 」 No different .

Theory driven investors take a different approach . By studying a particular market or trend , Such investors are committed to specific perspectives that they believe are predictive . Once formed , Theory driven capitalists will look for investment projects that match their mental model . Investors want , By forming a point of view , They can better know where to start , Which factors should be given priority .

There is a huge gray area between the poles : Opportunistic financiers may give priority to certain areas , And even the most theory oriented capitalists must have some flexibility .

Multicoin At one end . just as Jain said ,「 Let's start with theory . Many investors say so , But we are taking an extreme form .」 You bet ,Jain emphasize , The first task of the company is to make an investment plan , Instead of looking for an investment :

“ I often joke with our investment team that , Their job is not to find good investment projects . I don't care if they can have high-quality investment . I hope they can find a good investment theory . It's just that we happen to monetize their views through investment .”

Jain I think this framework is fundamentally pragmatic :「 People who form theories are more valuable than people who find investments , Because you may get multiple investment opportunities , So it's more important to know what it is .」

「 What is really needed ?」Multicoin That's where my theory started . It is worth noting that , This is true of both hedge funds and venture capital , The enterprise operates as a single team , Implement consistent strategies in different departments . In our conversation ,Samani and Jain Told me how they worked for Multicoin Build a new perspective .

First , They identified a promising market . This may start from a very high perspective , for example , First choose DAO A track like that , Then narrow the scope and refine the target . Once the target area is determined ,Multicoin Will begin to try to understand the 「 level 」 and 「 Design decision 」. How will different teams deal with relevant opportunities ? Why do they use a specific technology stack instead of another ? What choices and concessions do they need to make ?Jain Think , Trade offs are particularly important :

“ It helps , Because when you explore at the edge of possibility , There is usually no correct answer , It's a trade-off .”

Once the planning is completed ,Multicoin Will focus on the most exciting elements of the design space , seek 「 Big and targeted bets 」. Although this sounds like a trivial supplement , But it's important to understand Multicoin Your strategy is crucial . The agency clearly does not want to make an issue in a particular market or business model .

「 We don't like to say ,P2E Very interesting , So let's in India 、 Philippine and Argentine investment P2E project 」 cofounder Kyle Samani say .「 We have no problem in the Red Sea market ,」 He added ,「 But if we really want to enter the Red Sea market , We need to be very clear , Why can our investment team take a unique way to build a structural trench , And ultimately generate returns of scale .」

The commitment to accuracy is Multicoin Such funds and Tiger One of the main strategic differences between such funds . Although both are theory driven , but Tiger Focus on macro trends ; When it finds a way that it thinks works , It will invest repeatedly throughout the market . and Multicoin The type of investment is more like surgery .

for example , stay 2020 end of the year , It released 《Trade-offs in the Decentralized FTX Space》 This article . It consists of Tushar Jain and Spencer Applebaum writing , Outlines a 「 De centralization FTX」 Emerging opportunities , The advantages and disadvantages of different methods are discussed .Jain and Applebaum Ten features needed for decentralized derivatives exchanges are highlighted , Including the ability to guide liquidity and enable 「 Moderately high 」 leverage .

stay Multicoin Four months after the article was published , The company announced an investment in Perpetual Protocol, Because they think Perpetual Meet multiple indicators outlined by the team , For example, providing deep liquidity and high leverage .

In this regard ,Multicoin It seems to perfect a kind of 「 Risk presentation 」, Use their blog as a vision board , To summon the startups they want to see . Browse blog content , You will find a very direct connection between the initial statement and the final investment . The discussion of decentralized storage has turned to Arweave The investment of , Thinking about speed and scalability is an investment Solana.

This pattern indicates ,Multicoin Describing yourself as theory driven is definitely not empty talk , And has been confirmed by its portfolio .

Although the fund tends to operate in this research before deployment approach , But its partnerships show that flexibility also exists .Samani This explains :

“ We are strongly inclined to invest in one theory , That is, how the market will develop , And why a team wins . But we also believe that , In some markets , It is impossible for us to make such a decision firmly .”

According to the Samani It is estimated that ,Multicoin about 10% Your investment belongs to the latter strategy .Web3 Credential network Project Galaxy It's one of them . Although there is no clear view of how the market will develop , but Multicoin Have confidence in the entrepreneur , And think Galaxy Our team is looking for a feasible development strategy .

The first 2 Step : Looking for opportunities

once Multicoin With investment theory , It began to search for the right company .

Since its establishment ,Multicoin Most of our efforts are focused on Development 「 Interest Marketing 」 On . from the beginning ,Jain and Samani Understand the power of building audience and recognition , This has helped the company establish one of the best ways of thinking about encryption in this field .Multicoin Continued this strategy , Even expanded its business coverage .

2020 year ,Mable Jiang Created the company's Mandarin podcast , And pointed out that the podcast has become the first encrypted program in China . According to the Jiang describe , The English version has also attracted a lot of Vietnamese 、 Audiences in Thailand and Singapore .Project Galaxy CEO Harry Zhang Express , He is through Multicoin Media activities found that the fund's ,「 I read. Multicoin Published research papers , They're really great .」 And added that ,Multicoin In the Chinese market 「 obvious 」 First level player .

Multicoin Our audience is not limited to traditional media . Its presence Twitter The most active in , In especial Samani. As mentioned in the previous article ,Multicoin Some exaggerations can lead to misunderstandings , But this seems to be a deliberate strategy to some extent .

Published by the agency 2018 A version of the annual open letter states ,Samani and Jain「 Often use canning's law 」, The best way to get the right answer on the Internet is not to ask questions , But to publish a wrong answer .Samani Reiterated the right 2018 Interpretation of the annual letter , He said :「 A large part of my tweets are fishing games , It's very effective .」Samani and Multicoin In the past two years, this behavior also seems to have eased relatively .

Because the company and Solana Close cooperation , A relatively new source of potential projects has emerged . In an excellent marketing move , High speed Layer 1 Is building... Globally 「hacker houses」,Multicoin It also exists almost anywhere . With Solana Research and development of the next generation of developers , Many people will naturally turn to Multicoin.

As you might expect , A lot of opportunities are obtained through the efforts of traditional marketing methods . This is both passive and active . One side ,Multicoin Everyone pays attention to diversified reading , among Samani Also prolific . According to him , He does it every morning 6:00 Start reading 4 Hours , In the company Slack The channel is full of all kinds of content .

Samani Subscribed to a lot of news information , Read up to... Every day 30 Share . These are usually from companies he has talked to and wants to continue to observe , And the results of other investors and thinkers .

Samani Pointed out that , I spend every day on Twitter The time on the is no less than an hour , In his opinion , It's not a waste of time , because Twitter The algorithm has been very effective to suit his taste . In search of opportunities , The company's analysts and colleagues will also soak in Discord or Reddit in . in addition ,Multicoin Our team also iterates their views by talking to other investors and builders .

In addition to these efforts ,Multicoin And do business in the most primitive way : Go out and solicit . Especially at the beginning of the establishment of the Fund , Both partners are running around , Expand your contacts , And meet with the emerging builders of the industry .Samani Pointed out that , stay 2018 Years and 2019 year , He has... In a year 120 It's all on the road , From coast to coast , From one continent to another to attend meetings and hackers .「 We met almost everyone , It turns out that this is very important .」Samani say .

The first 3 Step : assessment

Once investors have the opportunity to evaluate the project , The real work begins . Because of its theory driven roots ,Multicoin There is a special perspective to evaluate transactions .

In our discussion ,Samani Referred to the Marc Andreessen The classic article of 《The only thing that matters》, among a16z The founder believes that , In the team 、 Between product and market , Investors should pay attention to the market .Multicoin Agree with this view , But there are also some own views : Market is very important , But it is more important to understand how the market will develop and operate .

In order to evaluate ,Multicoin The mapping degree between a project and its market view is studied . Does it have Multicoin Consider the most important feature of ? With the development of market space , How it will develop ?Samani Talking about the importance of answering these questions :

“ We spend a lot of time talking about how we think the market will develop and operate . What do we believe in , What is the probability ?”

Our goal is to make sure that Multicoin Fully consider the maturity process of investment , And the possible second-order and third-order effects of initial success or failure . most important of all , This assessment seems to be at the heart of the fund's assessment , As we will discuss later , It is a focus of the investment committee meeting .

Samani Express ,「 Compared with market evaluation ,Multicoin Spend surprisingly little time on teams and products 」. In a way , This is because great entrepreneurs often have difficulty explaining the novelty of their projects .Samani say :「 I find , Most of the time , Entrepreneurs can't express their views clearly .」 As mentioned in the previous article ,Solana founder Anatoly Yakovenko That's one example .

In addition to these factors , The team will also assess the systemic advantages that the enterprise may have .Samani and Jain Take network effects and psychological arbitrage as interesting perspectives for evaluation .

「 I think most people misunderstand them ,」Samani When it comes to the network effect, say .「 Most of the time , When people talk about the network effect , It is exaggerated . Then several times people underestimated it .」 Portfolio companies Helium That's one example , Its network effect may still be underestimated . As the node enters the system , The performance and functions of decentralized wireless networks are also enhanced .

Although not a Multicoin Projects invested , but Samani Pointed out that PoolTogether Is an example of psychological arbitrage . The agreement provides a game based savings product : Users have the opportunity to win more rewards by saving . Because the reward is through DeFi Arising from pledge , Even those who don't win can return their money and get native tokens POOL Participate in . you are here PoolTogether The longer you save money , Earned POOL The more .

If a potential Multicoin There is a serious mistake in investing in the project , Then it will be regarded as 「 First order error 」. In short , The team believes that the product in question is meaningless , And there are fundamental defects in some aspects .Multicoin This assessment is taken seriously ,Jain Connect yourself to Samani Describe as valuing 「 First order principle 」 People who .

Multicoin The strictness of making this decision led to missed, including Uniswap and Yearn Finance High quality projects including . Both of them have entered the top 100 projects in market value from relative obscurity .

Although it may be sad to miss a breakthrough project , but Multicoin Don't mind . Yes Samani and Jain Come on , There are still first-order errors in these two projects . stay Uniswap Case study ,Multicoin Consider the agreement as an invalid price fixing , And the basic mechanism of the system means that it can never increase transaction costs .

「 In all other cases under the same conditions , If Uniswap Increase the cost , The system will stop working ,」Samani say .「 If this happens , Token holders will likely be heavily parasitized by market makers and buyers .」Jain Add :「 There can be no parasites in open source systems , They were forked out .」

Multicoin Yes Yearn There is a similar logic to doubt , But it's also different .Yearn Clear charges , Even though Jain I don't believe in the persistence of this kind of income .「 Now , People are willing to pay YFI fee ,」 He means Yearn Tokens, ,「 But it's unreasonable . The market tends to be rational in the long run .」

The corollary of disciplined investment is , You must accept missing opportunities that are inconsistent with your point of view .Multicoin Excellent in its control , It can miss a deal , It is important that it wants to ensure that the companies and projects it supports are meaningful .

The first 4 Step : debate

If an investment is considered promising , It will eventually enter Multicoin The Investment Committee . Though many VC Have held similar meetings , But it's right. Multicoin Is essential to the way . In pursuit of in-depth research 、 Investment in belief appraisal ,Samani and Jain Place new positions in a challenge designed to expose risks and blind spots .

according to Mable Jiang That's what I'm saying , Everything will start with the content , This is a 「Multicoin The most important thing 」. First , Team members make a memo , Outline their views , Especially the attention to the market and its development . Anyone can come up with their investment ideas , Whether they are investors or not .「 Our hierarchy is very flat ,」 partner Matt Shapiro Pointed out that .

After document formation , Encourage other members of the team to read and comment , And provide different views . From asynchronous debate to intense synchronous meeting . Partner and head of public relations John Roberts (JR) Reed Speaking of this , He said :

“ The decision-making process is full of friction . Sometimes there is a heated debate . Sometimes people need to leave or change the way they communicate —— From oral to written to oral . But through all the heated discussion , You will come up with the strongest idea .”

Yes Jain Come on , The key to a productive dialogue is 「 There is always good opposition to 」. You may want to know how to oppose . about Multicoin, It comes down to two main factors . First ,「 You need to respect others fundamentally 」, I believe they have valuable ideas to share ; secondly ,「 You must be curious 」.Jain Pointed out that , say concretely 「 You must volunteer to keep asking , What I missed ? Until you find the root of the problem . You just need to peel it off layer by layer .」

Not every debate can be resolved . In these cases ,Multicoin Seek solutions of faith , Not for consensus .

Of course , Not all decisions require such in-depth consideration . Whereas Multicoin With the founder Sam Bankman-Fried Build relationships and in-depth understanding of the exchange market , Choose investment FTX US The latest round of financing does not take long .「 We don't need to talk about it for more than eight seconds ,」Samani say .

The first 5 Step : To win

so to speak , At present, there is no hotter venture capital market than cryptocurrency .Paradigm、Electric Capital and a16z And other specific areas of funds are expanding ; image Haun Ventures In this way, new entrants have entered the competition with strong funds ; image Bessemer and Bain Such traditional players have also decided to fight .

Compared with a fund with a larger team and more capital ,Multicoin How to deploy to win ? In a way , It's by picking some little-known arguments , And identify promising projects that other funds have abandoned to achieve this goal . As mentioned in the previous article ,Solana、Helium and The Graph Before becoming a hot game, they all experienced a difficult financing process .

When Multicoin It is 「 Red Sea market 」 Play a role in , It depends on some weapons . The first is its real interests and expertise , Especially at the track where the project is located .Samani:

“ One thing you may often hear about us is , Whether we finally invest in it or not , We usually ask some of the trickiest questions about how the market will develop 、 The most subtle question . We will really put pressure on them in this regard . This may be the most effective tool for winning investment contracts . Its founders will realize , These problems force them to think about the market in an unprecedented way .”

Multicoin Also recognize that venture capital is a service business .「 Entrepreneurs want investors to act at their speed ,」Jain say . In order to adapt to this speed ,Multicoin The team makes itself widely available to all investment projects , And aims to respond as quickly as possible .

Multicoin Unwilling to pull a lever to win a deal : The valuation . To maximize the potential of a grand slam ,Multicoin Hope to maintain the pricing principle . Of course , There are exceptions to every rule .「 The team and I know very well : At a certain time or place , Valuation insensitivity exists .」Samani say . Such events rarely happen , According to his estimation , About once a year , But when it comes , The team will abandon the rules .

Serum It's such an example , It is from Sam Bankman-Fried be based on Solana Establish a decentralized exchange . Whereas Sam Reputation ,Serum Be fully valued , but Multicoin Recognize that this is an investment worth deviating from .「 We know Sam It's the person who created it ,」Samani say ,「 also Anatoly The vision is to Solana Create an order book on . This must not be missed .」

The first 6 Step : scale

For benchmarking Serum The overestimation of ,Samani Pointed out that , The fund has 「 forwardly 」 Adjusted their positions . This involves Multicoin Another key step in the process : Decide how much to invest in a transaction .

Multicoin Why it's so successful , Part of the reason is that it has the courage to focus on investment . according to Jain That's what I'm saying , The confidence in holding these positions can be traced back to chapter 1 Step study :「 Our understanding of the market space involved and the trade-offs involved gives us confidence to expand it .」, When its managing partners are optimistic ,Multicoin Tend to make the largest investment .

Jain Talking about him and Samani Time says .「 This is why we are confident to actively adjust the size of our position . I don't think we have any big victory without scale .」

Another strange thing is , Hedge funds allow Multicoin Short , Although the fund has been short less and less . Considering that there are so many fraud projects hyped in the field of encryption , You may wonder why . actually ,Samani Mentioned the value of shorting in exposing bad items , Especially those projects that rely on unsustainable economic models .

He said :「 Short selling is a very interesting way to beat the Ponzi scheme .」 And take recent projects Olympus For example .Multicoin Short selling is not limited to potential Ponzi schemes . In the past , It was successful in shorting Zcash、Monero and Ripple.

So why give up this method ?「 It's hard to make a profit by shorting ,」Jain say , Its way has the disadvantage of asymmetry rather than the advantage of asymmetry .」 Besides , It also carries reputational risks , This is in Multicoin In the case of operating risk funds .「 Although short selling makes the market more efficient , But when hedge funds make money and others lose money , It doesn't look good .」Jain say .

Step seven : Active support

Multicoin Not a laissez faire investor . It is constantly looking for ways to help its investment projects think and execute better . Efforts in this regard are diverse , But first put the portfolio company first .Samani Express way :

“ We always share ideas or news events with them . It's not like that 「 Oh my god , This is a competitor , They'll kill you 」 And so on. . what's more , We'll send a text message to the portfolio company , say :「 well , I saw this article , It reminds me of what you are busy with . You may need to consider .」”

Entrepreneurs spontaneously support this statement .Project Galaxy CEO Harry Zhang Express :「 They always think about how to help you without asking questions .」Samani Add , Although there are about 80% The content is 「 Don't go anywhere 」, But it doesn't matter .「 I want them to know that I've been following them . stay 20% Under the circumstances , The news is still useful .」 in consideration of Samani It is estimated that I will send about... To the founders of the portfolio every day 20 Multiple such messages , therefore 20% The success rate is very high .

although Multicoin The percentage statement is used in providing advice , But it also provides more tangible support . especially , The fund partner Reed Provide strong marketing and public relations help .LP Adam Mastrelli call ,Reed stay 2018 Accession in 「 It's a milestone 」, Because he brings new value .Multicoin The founder of confirmed this statement .

The Graph Of Tegan Kline take Reed be called 「 Extremely intelligent people 」,Solana Co-founder of Raj Gokal said , He shared his 「 What we know about public relations 、 marketing 、 Everything about product launch and community management 」. In the often confusing world of encryption , Having a person who understands technology and can create compelling information is very valuable .

Multicoin Another way to provide support is to help the project expand to China . since 2019 Annual employment Mable Jiang since , The company has established a position in China's encryption ecosystem . for example , stay Solana 2020 During the trip to Asia in ,Mable Jiang Use wechat and Chinese social media platforms , Helped them develop a 「 Hyper Local 」 The cohesion strategy of . There is also an introduction to business development , help Solana Hire Chinese talents .18 After a month ,Mable Jiang Pointed out that 「Solana Its popularity in China has improved a lot 」. Besides ,Mable Jiang by Helium and The Graph Provides similar value , Help these two projects recruit regional staff .

Multicoin The ability to provide cross continental support is a rare advantage . No other US cryptocurrency fund has such a mature foundation in China .Samani Yes Multicoin The practice of :

“ Crypto capital markets are global in nature . We realized this very early , And try to help all the companies we invest in by integrating major cultures in our team .”

In addition to public relations and Chinese market expertise ,Multicoin It also seems keen to increase value in other ways according to the specific situation . for example , As mentioned in the previous article , The team is helping Helium It plays an important role in defining its token structure .

Last ,Multicoin Seek to promote the development of the company by advocating progressive encryption supervision . last year , front Chapman and Cutler partner Greg Xethalis Join in Multicoin, Responsible for internal legal functions , And guide the company's work in Washington .Xethalis Previously participated in the first bitcoin ETF The proposal , And in 9 For more than years, it has represented several well-known encryption operators in this field .

In our conversation , He pointed out that Multicoin「 Hope to participate in the relevant policy decisions in Washington 」. especially , He outlined two priorities . The first is to determine how bitcoin and other digital assets should be treated from a tax perspective . The second is for network startup and DeFi Create a framework , Help the development of the industry , Although there will be 「 Some guardrails ( Refers to the supervision of )」.

Xethalis admit , Although no single law can solve the problems of the industry , But he and the company are keen to advocate a loose encryption environment in the United States .Multicoin The regulatory interest of is another example of proactively helping companies .

The first 8 Step : Actively follow up

Some decisions you have to pay a heavy price to learn .2019 year ,Multicoin Bought the original token of coin an very early BNB. Whereas BNB It rose in the next three years 6,300% above , This is a huge deal . However ,Multicoin Missed some benefits .「 We adjusted our position too fast , As a result, it continues to rise ,」Jain Sighed and recalled ,「 Some more , But we could have made more money , And it has formed a huge market . We learned , You need to let your winners play freely .」

Fortunately, , This seems to be just an isolated misjudgment . in general ,Multicoin The winner who tends to hold it , Instead of reducing positions . As mentioned earlier ,Multicoin Bought... From other investors early in the project Solana Token of , At that time, many people had lost confidence in it .

Samani and Jain Same for Helium、The Graph Made follow-up investments with several other companies . I'm buying FTX Token of FTT after , The team closely followed Sam Bankman-Fried The job of , To help Serum The creation of , And participated in FTX US The latest round of financing . When Multicoin When you think a project will be a winner , Even if other investors oppose , It will also double or triple its investment .


Multicoin Capital Won the rarest honor in the venture capital industry : Against the trend . It has a history of choosing non consensus investments and proving to be right . To achieve this goal , What is needed is more than just a Big Bang Twitter image 、 Trendy marketing or provocative meetings , It is that the agency adheres to the most basic principles —— Think for yourself .

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