Chris Burniske: The Solana Thesis, Wisdom From Building Placeholder and The Psychology of Investing
Nov 6, 2023
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Chris Burniske, partner at Placeholder VC, discusses their evolving philosophy on investing in crypto networks. He talks about building founder relationships, managing liquidity, evaluating growth vs. value, and the transition from Ethereum to Solana. The conversation also explores different strategies for value accrual, compares Solana and Ethereum, and discusses the psychology of investing in cryptocurrency.
Crypto venture investing offers more flexibility and granularity in terms of liquidity compared to traditional venture investing.
Building strong relationships with portfolio teams is crucial for venture investors to provide guidance and support throughout various stages of the business.
Placeholder's investment strategy has shifted from Ethereum to Solana, recognizing the underpriced potential of Solana's ecosystem and the need for thoughtful analysis in the competitive landscape.
Deep dives
Liquidity and Venture Investing in Crypto
The podcast episode discusses the differences between traditional venture investing and crypto venture investing, focusing on the topic of liquidity. In traditional venture investing, liquidity events are usually limited to buyouts or the company going public, which provides limited flexibility for selling investments. However, in crypto venture investing, there is more granularity and frequency in choosing when to sell investments, especially when crypto assets go public. The speaker emphasizes the importance of understanding the full liquidity profile of venture investing in crypto and having expertise in navigating the lifespan of crypto investments.
Building Relationships with Portfolio Teams
The episode delves into the importance of building strong relationships with the teams in the portfolio. By creating close partnerships and providing support and guidance, venture investors can be valuable allies to entrepreneurs. The speaker highlights the significance of nurturing relationships from the seed and series A stages, where venture investors can contribute to various aspects of the business, including early setup decisions, hiring, growth strategies, and financial discipline. As the relationship progresses, the level of involvement may change, but the aim is to maintain a supportive role while allowing the team to become more independent.
Choosing Ecosystems and the Evolution of Crypto Investing
The podcast discusses the shift in focus from Ethereum (ETH) to Solana (SOL) in the investment strategy of Placeholder, a venture capital firm. The speaker highlights the importance of aircraft carrier strategy, where they accumulate large liquid positions in an ecosystem and invest in venture deals around it. While Ethereum remains a significant part of their approach, the team recognizes that the high expectations and complex challenges it faces make it harder to find unique opportunities. On the other hand, Solana is seen as an underpriced ecosystem with strong potential, driven by its consensus on speed and performance. The speaker also acknowledges the competitive landscape of Layer 2 solutions and emphasizes the need for pragmatism and thoughtful analysis when considering the future of crypto investments.
The Genesis of Placeholder and the Importance of Private and Public Market Expertise
Placeholder, a venture capital firm, was formed through the collaboration of individuals with expertise in both the private and public markets. They realized that investing in crypto, even at the private stage, requires a combination of private and public market knowledge. The melding of Ark Investing, Union Square Ventures, and Placeholder led to the genesis of the firm. The team recognized that blockchains are the open standard to unlock access and coordination around data.
The Journey from Bitcoin to Ethereum to Solana
Both founders of Placeholder were initially drawn to Bitcoin due to its scarcity and store of value attributes. They later became interested in Ethereum and recognized its potential as a smart contract platform. In recent years, Ethereum has become widely accepted in the crypto space. However, the founders also recognized Solana as a formidable underdog that gained relevance during the bear market. They view Solana as a growth-oriented investment with potential for significant development and staying power.
How do experienced crypto investors analyze and adapt their strategies over time? Get insights from Chris Burniske, partner at Placeholder VC, on the firm's journey investing in crypto networks.
From Bitcoin's early days to Ethereum's rise and now Solana, Chris explains their evolving philosophy. He shares thoughtful perspectives on building founder relationships, managing liquidity, evaluating growth vs. value, and more.
For investors interested in understanding crypto networks, this episode provides an insider's view on crypto venture investing. Join the conversation!
Disclosures: This podcast is strictly informational and educational and is not investment advice or a solicitation to buy or sell any tokens or securities or to make any financial decisions. Do not trade or invest in any project, tokens, or securities based upon this podcast episode. The host and members at Delphi Ventures may personally own tokens or art that are mentioned on the podcast. Our current show features paid sponsorships which may be featured at the start, middle, and/or the end of the episode. These sponsorships are for informational purposes only and are not a solicitation to use any product, service or token. Delphi’s transparency page can be viewedhere.
