DeepSummary
Nick Tomaino, founder of 1confirmation, discusses his journey from discovering bitcoin on online forums to joining Coinbase in the early days, getting pushed out, and subsequently starting his own crypto venture capital firm. He recounts the challenges of raising his first $26 million fund and shares insights on the current state of crypto VC, suggesting that many funds raised too much money and should give some back to LPs.
Tomaino provides his perspective on the FTX collapse, criticizing those who amplified the "fraud of perception" around the company, and calling for accountability beyond just Sam Bankman-Fried. He also shares his bullish outlook on NFTs and user-owned brands like CryptoPunks, despite Opensea's recent struggles.
Throughout the interview, Tomaino emphasizes the importance of independent thinking, sharing examples of how his contrarian views and determination have shaped his success in the crypto space. He offers advice on building a strong crypto portfolio, managing fund sizes, and learning from investment hits and misses.
Key Episodes Takeaways
- Many crypto funds raised excessive capital without unique insights and may need to return money to LPs or risk poor returns.
- The FTX scandal involved a "fraud of perception" enabled by those who amplified the company's narrative, warranting broader accountability.
- Nick Tomaino emphasizes the importance of independent thinking and determination in his success in the crypto space.
- Tomaino remains bullish on NFTs and user-owned brands like CryptoPunks, despite recent struggles at Opensea.
- Generating strong returns for LPs is the primary objective in venture capital, according to Tomaino.
- Tomaino plans to continue investing in bleeding-edge crypto projects as the industry grows in global importance.
- Human desire is often driven by mimetic forces, as exemplified by Taylor Swift's mainstream popularity.
- Prudent venture investors should take some profits off the table for big winners in their portfolio.
Top Episodes Quotes
- “It wasn't just a financial fraud, right? It was a fraud of perception, which they all played a role in. Ultimately, people will realize that that's what should happen.“ by Nick Tomaino
- “At the end of the day, when it comes to generating returns for LP's, which, again, is what we're trying to do in venture, it's like, that was not the optimal decision for that.“ by Nick Tomaino
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Episode Information
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
Harry Stebbings
10/30/23
Nick Tomaino is the Founder and General Partner @ 1confirmation, one of the leading seed firms fueling the decentralization of the web and society. The fund started with $26M in backing from individuals including Peter Thiel and Mark Cuban and it has been reported that the firm now has over $1B in assets under management. Nick has led seed investments in OpenSea, dYdX, SuperRare, Polkadot and Cosmos among others. Prior to 1confirmation, Nick was a Principal @ Runa Capital and before that led business development and marketing at Coinbase in the early days of the company.
In Today's Episode with Nick Tomaino We Discuss:
- From Cryptokitties to founding the Leading Seed Crypto Firm:
- How did Nick first come into contact with crypto and bitcoin specifically?
- How did getting fired from Coinbase catalyse his move into venture?
- What does Nick know today that he wishes he had known when he started investing?
2. The Landscape Today: Funds and SBF
- Are the current generation of crypto funds too large? Should they give money back to their LPs?
- Will the next generation of crypto funds be smaller? Are any crypto funds able to raise right now?
- Why does crypto Twitter hate crypto VCs? Who are the worst VCs for pump and dump?
3. SBF & FTX: What Actually Happened, Who is to Blame, What Happens from here?
- What is the biggest misconception on SBF and FTX today?
- Who should be held accountable? What else would Nick like to see?
- How should FTX change the way that LPs invest into venture managers?
4. How to Build the Best Crypto Portfolio in Venture:
- How large are the funds? How does Nick determine the right size for a fund?
- How many investments does Nick make per fund? How do loss rates look in crypto?
- What have been Nick's biggest investment hits and losses? How did that impact his mindset?
5. The Future for NFTs and Opensea:
- Why does Nick remain bullish on the future of NFTs?
- How is Nick able to remain optimistic about the future of Opensea given their volumes?
- Where does Nick believe the fair price for Opensea should be today?
- Did Nick sell their Opensea at the $13Bn round?