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The Next Wave Of Technology: Are Crypto Hedge Funds Pivoting To VC?

A discussion with Future\Perfect Ventures Founding Partner Jalak Jobanputra.

next wave of technology
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The Next Wave Of Technology: Are Crypto Hedge Funds Pivoting To VC?

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Transcript

Welcome to balancing the ledger where tech and finance intersect. I am Jen Wieczner And I'm Robert Hackett. And today we're joined by Jalak Jobanputra, the founding partner of Future Perfect ventures. Thank you so much for being here Jalak. Well thanks for having me. So tell us a little bit about your strategy and your phone you launched in 2013 and now you're launching a second fund.

So what's happening in a VC since 1999 started off investing for Intel out in Silicon Valley during the boom in the US of the Internet. And I thought most U.S. VCs were not looking globally enough for the next wave of technology innovation and I started digging around what was happening in different places in the world. Thinking about bigger trends so we have 6 billion people in the world only half of those are Internet enabled. We have more and more smartphones coming online which means a lot of data that's being collected. We still have 2 billion unbanked people around the world a billion and a half people without identity. And so while I've been excited about what Internet and technology has done for many of us I thought the next wave of technology was going to hit those people who have been underserved by the institutions and technologies that have been created. And in that vein I went to my first Bitcoin Conference just out of curiosity. I was just very intrigued by this whole idea of trusting code versus people. As I began digging in and learning more about the technology powering bitcoin I started thinking of all the different applications keeping our healthcare data secure around banking transactions and doing micro transactions and was just so excited by the talent and the entrepreneurs I met and I started investing and many of them and built a fund around the thesis that decentralization block chain and data science.

You mentioned that you started as a venture capitalist in 1999 which was a crazy year it was just before the dotcom bubble burst. Right now in crypto we've entered a winter period. What are the similarities and differences that you are picking up on.

Between then and now in the really beginning stages of the ICAO boom I think it was April of 2017 we started seeing the prices of Ethereum and that Quane rise. And you could just feel the energy. And I remember saying at a conference this is starting to feel like 1999 in Silicon Valley. And sure enough a few months later everybody was icee going.

There is so much speculation and frenzy that was very similar to what happened in the late 90s right before the dot com crash. It took everybody by surprise even those of us in the industry that had been in the industry for several years just the Hockey Stick and the level of interest and the frenzy. There was at least some regulation in place when we saw the IPO was happening in 1999.

These companies while they were early stage they still were more formed than a lot of the companies that were going through CEOs often companies were were icy owing just based on a couple of paragraphs on a Web site and not even a white paper. And it was also way more global because of the Internet have more connectivity than ever before and the internet didn't exist in its same form in the late 90s it was much slower.

So people didn't have access to information and ability to invest very quickly in companies the way they were able to in 2017. I took a step back from the market at that time and wanted to see it level off because there's nothing in history that's been able to sustain that kind of growth. And while technology is unpredictable humans can be unpredictable.

I believe human nature is actually quite predictable and we saw that happen.

Now given the bear market and the amount the prices have come down there's been some reports that it's also affecting the valuations of some of these private companies in funds. There was reports that Circle's valuation which was 3 over three billion dollars or almost three billion dollars last May is now you know trading in the private market at about 75 percent discount. Are you seeing that. Is that a trend throughout the industry or valuations are really being discounted. Well we're not an investor and Sterkel and.

And so I can't comment on that valuation but what I do know is a lot of companies raised large sums of money last year based on the volumes that they were seeing and the liquid crypto markets and at some Wayne.