October 9, 2021
Image: OpenMoji, Protocol
Hello and welcome to Pipeline. I'll be on vacation next week so Pipeline will be taking a break as well. See you again on the 23rd. This week: how founders should split equity, investing advice you hopefully didn't follow, and what's behind the wave of crypto unicorns (or cryptocorns for short).
Crypto as a sector isn't new, but if you look at the investor frenzy surrounding the space, it may feel like investors are just catching on. In the last few weeks, several startups have become "cryptocorns." NFT trading platform Sorare raised $680 million at a $4.3 billion valuation and blockchain infrastructure startup Blockdaemon is now worth $1.3 billion after its $155 million series B. This week, a16z put its new crypto fund to use when it led a series B deal for Sky Mavis, the maker of an NFT game, which valued it at $3 billion, and also made its first investment in India in the country's second crypto unicorn, CoinSwitch Kuber.
The explosion of interest is part of the latest wave of interest in crypto startups, but there have been other waves before, CoinFund's David Pakman explained. A 13-year veteran of Venrock, Pakman went all-in on crypto earlier this year when he joined CoinFund.
The rising interest in investment means three sectors could also reach a tipping point soon, Pakman predicts.
There's obvious investor interest — but still a lot of smart folks walking away from crypto rather than taking the time to learn it, Pakman says. (If you've been reading this and are confused by the acronyms and terminology, it may prove Pakman's point.)
"The only way to make any return is to be right about something that most people think you're wrong about," Pakman said. "Even after crypto has gotten to the point where it is today, you have literally the majority of the people on the planet either not caring or dismissive of it." The pace of crypto unicorn creation is clearly picking up, but it's still small compared to the rest of VC-funded tech.
The way we work has fundamentally changed. According to the International Data Corporation, the revenue for worldwide collaboration applications increased 32.9 percent from 2019 to 2020, reaching $22.6 billion; it's expected to become a $50.7 billion industry by 2025.
Jason Warner made a name for himself as the engineering leader at Canonical and Heroku before becoming CTO at GitHub. In July, he switched tracks and joined Redpoint to be part of its new $725 million growth fund. Warner has a particular fondness for driving a minivan and is also a fan of sports teams like the Yankees, Penn State and the Cleveland Browns (just don't ask him any sports predictions).
What was your first job, and what's a skill you still use from it?
My very first job was at McDonald's. A practical skill that I took away from it was juggling multiple things at once. Whether working the register or the kitchen, when rush time hit, you had to keep track of a ton of things all at once. There's an energy and a surge of adrenaline that comes with it, and while it's super busy and chaotic, you can develop a rhythm and systems to keep it all in order. I also quickly learned that a kitchen is a team sport and the person that can best organize the team makes an outsize impact on the overall success or failure of everything.
What product or service are you totally, even irrationally, loyal to?
Nike and Lacoste. Nike because I have large and flat feet that require insoles and I found Nike sneakers accommodate this well when I was playing a lot of basketball. I have ventured out to wear Adidas in their new line, but I have a closet full of Nike.
Lacoste is a throwback to IZOD when I was a kid. I have lots of pictures of my siblings and me in IZOD gear that we got from thrift shops or department stores when the brand went mainstream and also had many knockoffs. I know the brand now has a bit of a "Patagonia in VC" vibe to it, but I can't help think of growing up every time I see the green crocodile.
What's one of the worst predictions you've ever made?
Nearly any and all sports predictions I make as a fan vs as an independent spectator or observer. Never let fandom get in the way of rational decision making!
What role do you think software should play in a venture firm?
I have a romanticized notion of VC, I think. Perhaps almost provincial and quaint. Firms should be amazing partners to help think through, build and grow your business as you see it. I love the idea of "trusted advisor" alongside "experienced partner." My own operational experience (41st Parameter, Canonical, Heroku, GitHub) has led me to understand that it takes a village to make a hugely successful business. I also had the distinct opportunity to see when it goes well and poorly. I want to be there for all founders the way I wish I had it going through my own journey. I am a team sport person and I care more about championships than I do my own "contract." This is the game I want to play and the way the game is meant to be played.
What company, outside of your portfolio, have you been most impressed to watch this year?
Figma. It's always Figma.
This fall, as enterprises everywhere decide whether to return to the office, continue working remotely or establish a hybrid working model, collaborative technology platforms will be more important than ever. Asana COO Anne Raimondi shares advice with business leaders as they move into the next productive work phase, whatever shape that may take.