20VC: Why Crypto is Software Eating Money, Why Crypto Firms Will Outcompete Traditional Venture Firms, How To Price Tokens and When To Have Them, DAOs: How Are They Structured and What Makes One Successful with Avichal Garg, Co-Founder @ Electric Capital
In this discussion, Avichal Garg, Co-Founder of Electric Capital, a powerhouse in crypto venture capital, shares his journey from software to crypto investing. He dives into the competitive crypto landscape, highlighting how crypto firms are uniquely poised to challenge traditional VCs. Avichal explains the complexities of token pricing and the evolving role of Decentralized Autonomous Organizations (DAOs) in governance. He emphasizes the collaborative nature of crypto investing and the need for a narrative-driven approach in this dynamic market.
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Electric Capital's Origin
Avichal Garg and Curtis Spencer began angel investing in crypto in 2015, focusing on projects like Bitcoin and Ethereum mining.
Traditional VCs sought their crypto advice, leading to Electric Capital's formation in 2018.
insights INSIGHT
Crypto VC Landscape
The crypto VC landscape is becoming barbell-shaped, with a few large firms and many smaller ones.
Crypto investing is more collaborative than traditional VC due to distributed system dynamics and ownership limitations.
insights INSIGHT
Collaborative Crypto Investing
Crypto networks, being distributed systems, discourage concentrated ownership to maintain resilience.
This necessitates collaborative investing, as projects often sell 10-15% equity, with no investor owning over 3-5%.
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The Bible is a comprehensive collection of texts that form the central religious text of Christianity and Judaism. It is divided into the Old Testament, which includes books such as Genesis, Exodus, Leviticus, and others that narrate the creation of the world, the history of the Israelites, and the prophetic messages. The New Testament focuses on the life, teachings, death, and resurrection of Jesus Christ, along with the early Christian church and its spread. The Bible contains a wide range of genres, including historical narratives, poetry, wisdom literature, prophetic writings, and epistles[2][3][5].
Bhagavad Gita
Bhagavad Gita
The Bhagavad Gita is a central text in Hinduism, embedded within the epic Mahabharata. It recounts a dialogue between the warrior-prince Arjuna and his charioteer, Krishna, who is an avatar of the god Vishnu. The text explores themes of dharma (duty), karma (action), and the path to spiritual enlightenment. Krishna advises Arjuna on the importance of performing his duties without attachment to the outcomes, emphasizing the concept of nishkama karma (nonattached action). The Gita synthesizes various strands of Indian religious thought, including Vedic concepts, samkhya yoga, and bhakti (devotion), providing a coherent vision of Hindu philosophy and spiritual practice[2][4][5].
Avichal Garg is Co-Founder & Partner @ Electric Capital, last month Electric announced they had raised $1BN for their new fund making them one of the largest independent and crypto-native VC firms in the world. As for Avichal, prior to Electric, he was an investor in crypto projects such as Anchorage, Bitwise, Lightning Labs, and OpenSea and unicorns such as Airtable, Cruise, Deel, Figma, Notion and many more. On the operating side, Avichal successfully sold his last company to Facebook where he became Director of Product Management for the Local product group, a team of 400 engineers responsible for billions in revenue.
In Today’s Episode with Avichal Garg You Will Learn:
1.) Origins into Venture:
How did Avichal make his way into the world of startups and angel investing?
How did Avichal make the pivot from software to crypto investing?
Was Avichal nervous when making the move to institutionalize what had been personal investing?
What does Avichal know now that he wishes he had known at the start of Electric?
2.) The Landscape: Crypto Investing
How does Avichal assess the crypto fund landscape today?
Will we continue to see a small number of firms (a16z, Katie Haun, Paradigm, Electric) dominate the market?
What happens to all the small crypto funds that have been raised in the last year?
Why does Avichal believe crypto investing is much more collaborative than venture investing?
How can venture size returns be made if the ownership levels are so much smaller?
3.) Crypto Firms vs Traditional VC Firms:
Why does Avichal believe that crypto is software eating money?
What does this mean for traditional venture? Who will survive? Who will die? Who will thrive?
Why can generalist firms not compete with crypto native firms?
How are the teams of crypto native firms structured so differently to those of traditional VCs?
Do crypto projects and investments need the same level of service and help that generalist VCs provide with their platform services?
4.) Tokens - Equity - Liquidity:
How does Avichal advise investors on how to think through token vs equity investing?
When does it make sense to have a token vs not having a token?
How are crypto tokens priced and valued? What do you need to know when buying tokens?
How does the liquidity of crypto markets make it challenging for investor psychology?
What is the biggest lesson Avichal has learned on when is the right time to sell?
5.) DAOs: 101
What are DAOs? Are they not just another form of government?
What makes one DAO successful and another not?
What tooling and infrastructure are required to manage a DAO successfully?
What does Avichal believe the vision of a DAO should be? How should they define success?
Item’s Mentioned In Today’s Episode with Avichal Garg
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 
