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Joel Monegro

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16
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2018-07-02
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2018-07-02
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1
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  1. “Well, here's the funny thing. We didn't say yes because they didn't ask for the investment, the publicly announced investment that we made was in decred, which is a network. It's kind of like Bitcoin with governance. And that was one where Chris and I had followed the progress for some time. And even before placeholder, we were individually invested in the network. And once we closed placeholder, we started building a position in the service. And as we were doing that, we became more and more involved with the secret community and the secret core developers and got to a point where we feel quite good about our relationship with them. But it is an interesting feature of this market. Not every tie. It's not like in BC where entrepreneurs are coming to you. You often have to go out and do the work and find them. And now you don't have to ask for permission.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Well, one of the things that is difficult to fight is the urge to check coin market cap every day, which is different from a traditional VC or the world that I grew up in. And Chris is a lot more used to this than I am. So this word of balance is pretty interesting. But in VC, you're stuck in this very long feedback loop in terms of finding out how you're doing because companies raise money every 24 months and you kind of make an investment and you wait a while. And then when they go out to race again is when you get a measure for whether the company is increasing in value or decreasing in value and whether that matches your expectations or not here, the portfolio is mark to market every minute and in crypto and specifically markets never shut down it's 24-7. And so there is an urge to always check how you're doing that is difficult to fight. And it's challenging because I try to remove myself from that behavior as much as possible to focus on the thesis and not on the market. But it is tough.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Yes, I agree, though. I think we've seen ICOs or ICO fever really diminish as the year has gone by. I think we're getting to a healthier place and largely due to the increased interest from regulators into space. I think that's been very positive.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “I believe that governance is where most of the value is going to accrue in crypto at the end of the day, precisely because of what Kyle pointed out, features, functionality can be copied. And the thing that you can't copy is a community and the thing that keeps a community together is, in my view, good governance”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Interview being the quick firearound. So, as you know, I say a short statement, Joel, and then you give me your immediate thoughts about 60 seconds per one. How does that sound? Let's do it. So your favorite book and why, what must I be reading on my next flight to New York? My favorite book is anti-fragile. This was actually a recommendation from my early days at”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “The incentives model and that they're well constructed. And that has nothing to do with features, right? That has more to do with the coordination of a decentralized network to create the service. And then the other side is in governance. And if you think of crypto economics within a network as kind of the rules to a game, the governance mechanisms within a network represent the power to change the rules of the game. And the reason that's important is you have to start with the assumption that whatever you set as the rules of the game at some point is going to have to change. when you're dealing with a decentralized network where there's a very diverse set of stakeholders, then you need to focus on creating governance mechanisms that allow for that change to happen and that allow for the community to make those decisions. And so those are the two things that we think make or break a network. I mean, my what? I teed a sort magnificently for around two and a couple of months with those last two, but I do want to move into my favorite element of any.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Forces to think about what are the things that we should be looking for if not functionality. And to us, it comes down to crypto economics and governance, which is the two areas that we focus our practice on and placeholder. Cryptoeconomics are basically the economic model and the incentive model that allows for or that enables a network to run and operate, a network with properly constructed crypto economics will all be more successful than a network that doesn't have properly constructed cryptoeconomics. And we've seen different kinds of services struggle with this in different ways. For example, the debates around whether Bitcoin's supply schedule will scale or not over the long term still remains to be seen. And we've also seen more application focused networks like Steam, for example, which is a decentralized social media network when they started out, they had an economic model that created a bit of a bubble and then that crashed pretty quickly because they had an inflation rate that was way too high. And so that's one area that we focus a lot of our time on and understanding.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “We have Carl Simani on the show from a multi coin, and he said in crypto features can be copied so it's a case of betting on fundamental trade-offs. I'm intrigued, how do you think about kind of the trade-off long and short term and the fundamental trade-offs that we experience in crypto and how you address them with placeholder? Well, I think the first part is absolutely correct. Features can be copied and you can't win this market solely on the basis of features. And we've seen this even though it's so early. We've seen a number of iterations of this, both in the way networks work and get copied and everything's open source. And so you can grab the code and start a competitor immediately or fork an existing network. And also when we've seen the new innovations and new technologies come to market, like for example the technologies that allow for private transactions with networks like Ccash, et cetera, we're starting to see them being ported to existing chains.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “You have a more liquid fund structure that can end up screwing you in interesting ways if you're now bound by the whips of the market, if your investors can pull out of the fund because it is liquid and so on. When the market goes down, which is a moment when you should really be buying, you may be struggling to deal with investors who want to pull their money out. And so we wanted to go for the structure to insulate ourselves from the various market fluctuations and make long-term investment decisions. And we found that a lot of LLPs are quite interested in that. And common question that came up as we were constructing this fund was, well, why are you building the structure when the assets are public and anyone can go and buy them? The reality is that most LPs are not going to go out and source these investments and build all the infrastructure and select them and so on. So there's real value to this structure, especially if they're looking to make a really long-term bet. No, I couldn't agree with you more in terms of kind of the danger of liquidity there in down markets. But I am intrigued before we dive into the quick fire on one final element.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “That is a very common question and something that we encountered a lot while we were fundraising. The thing that we kept coming back to was reminding people that behind these multi-hundred million dollar multi-billion dollar valuations of some of these networks, they're still early stage teams with all of the problems that face early stage teams. And if you spend any time investing in early stage companies, you know that it's quite volatile. And so what we've seen and what we think will continue to see is quite a lot of volatility in the space. And that was one of the most important factors in our decision to structure this fund as a venture capital fund with a 10-year commit a capital structure where our investors can't get out and pull out their capital the way that they can with a hedge fund. The reason is that when you have a highly volatile market, especially in early new market like crypto that's fairly 10 years old, there will be a lot of volatility. We are in a period of frenzy where there will be massive rises and massive falls.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Led to the creation of computers and allowed for companies like IBM and so many others to emerge, then the computer market, the mainframe market got consolidated around IBM as that market matured. And about 25 years later, we get the introduction of another openly available platform architecture, which was now based around the microprocessor. And what the microprocessor did was commoditize computers because whereas before, companies like IBM would design custom CPUs with complex electronic systems. The microprocessor introduced a general purpose processor that could be used by anyone. And as a result, the computer business decentralizing how commoditized we went through having basically just IBM.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “So, what we see over and over through the history of information technology, if you take it from, say, the 1950s with the rise of the mainframe, the computer, what we see is that we see an open platform, an open system architecture, an open standard emerge. What that standard does is it collapses the cost of production for the particular technology that it addresses, then it allows for value to be created on top. So just taking it from the beginning to make it a little bit more practical with Kickstarted the computer industry was the invention of the transistor, which was a much cheaper alternative to the vacuum tubes that were used in early computers in the 40s. And the transistor came along and was commercialized in 1947. And that allowed for the price of electronics to collapse. And we got the whole consumer electronics revolution that happened. And computers came as part of that. So the commodity of electronics, the open sourcing of electronics as a platform.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Same amount of dollars worth of Bitcoin and found that Bitcoin would have been a much better investment. And that was a big aha for me.”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Shape the way you think about working and investing in companies Many, but the one that sticks out as I think about my journey in crypto and how much of it happened at USB first was it was an amazing platform for me to go out and explore and meet with a bunch of entrepreneurs and make a couple of investments. And it was through making those investments and working with those companies that I started developing a thesis for this space. We made a number of early stage investments in early crypto companies like OneName, which is now Blockstack and OpenBazaar and media chain and later into things like Numeri and it was through working with all of those companies that I really got to learn this space. But the biggest aha moment for me, which led to understanding that the assets are more interesting than companies was one time I decided to look at every time that USB had put money into Coinbase and I looked up the price of Bitcoin at those times and I calculated how much better or worse an investment it would have been to just buy Bitcoin and buy the”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Behind that. A lot of it actually has a lot to do with my relationship with Chris, my partner Chris Bernisky. We met in 2016 and early 2016 and we bonded over our shared belief that the most interesting place to invest in was in the assets themselves and the crypto assets that were being created with blockchains as opposed to companies. It was interesting as he was coming at it from different perspective having worked at a public asset manager called ARC that deals with public equities and I was coming from early stage venture capital and we figured out that crypto was an interesting intersection of both. You had early stage stage companies launching these networks but they have these assets that operate very much like public assets. They trade on exchanges and so on and so our viewpoints and our skills were quite complementary and after developing a close friendship we realized that we really wanted to work with each other and so in early 2017 we decided to start Please Home. Can I ask you?”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “You have now arrived at your destination. But Thank you for having me, Harry. Not at all. I'm very excited for this, but I want to kick off today So, this goes back to when I found Bitcoin in 2013. And the way I came to study Bitcoin was after working for the government of the Dominican Republic where I started a department called the Digital Economy Department that was in charge of setting national tech policy agenda for the country. And one of my mandates was to investigate possible payment system reform avenues that we could pursue. And it was in looking at how different countries in Latin America were operating on obsolete financial and payment systems that I started looking for a more modern technology solution and stumble into the world of cryptocurrency. And then shortly after that, I left the government, then went to work for USB. That's the place where I really fell down the rabbit hole and had the opportunity to work with a bunch of companies and falling up the space. Can I ask, why?”

    2018-07-02 · The Twenty Minute VC · 20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC · IDENTIFIED FROM THE TRANSCRIPT · source