The Encryption Layout of Lightspeed Venture Capital: The New Giant in the Web3 World
Original author: 0xclancularius, Rhythm BlockBeats
If, a few days ago, the investors of Web2 were nostalgic in the live broadcast and the freshmen of Web3 were chatting about whether to drop out of school with the heads of tens of thousands of dollars, it already made everyone feel the separation between Web2 and Web3, then March 30 In the evening, the enthusiasm of the Web3 world-class market brought the severance to a climax.
Within a few hours, several projects announced the completion of financing, ranging from several million dollars to as much as 620 million dollars. According to rough statistics, the Web3 world completed more than 1 billion dollars in financing overnight. Sequoia Capital, a16z, Tiger Global, Lightspeed, these top investment institutions that once slammed the Internet world frequently appeared, and they chose the future in their eyes.
Sequoia, a16z, these old faces are already familiar to everyone. Rhythm is also in "All In Crypto" Sequoia Capital. How many crypto projects have you invested in this year? " and "Black Cat White Cat", and today I will introduce another giant Lightspeed (Lightspeed Capital). This article was originally published in January this year. Their attention to encryption is bound to make Lightspeed's name appear frequently. In a Web3 world.
The name Lightspeed Venture Partners (Lightspeed Venture Partners) has appeared a bit frequently in the encryption world recently.
At the beginning of 2022, FTX dropped a big news, announcing the launch of the $2 billion Web3 venture capital fund FTX Ventures, and recruited Lightspeed Venture Partners Amy Wu to manage it. As soon as the news came out, the market's focus immediately fell on Lightspeed, which has a 20-year history of VC.
The long bull market in the Crypto market in 2021 has spawned a large number of native encryption institutions, and has also attracted the attention of more traditional financial institutions. Lightspeed Venture Capital is one of them. This year, Lightspeed Venture Capital not only made frequent investments in the Crypto primary market, but also jointly launched a $100 million blockchain game fund with FTX and Solana, fully blooming in the layout of NFT, GameFi, DeFi, public chains and infrastructure.
Lightspeed Venture Partners Mercedes Bent previously stated in an interview that by 2021, Lightspeed has so far invested nearly $500 million in 40 blockchain/Web3 investments. This year's investments include FTX, Solana, Terra, Alchemy, Parallel Finance, LedgerX, Blockchain.com, etc., and will continue to increase investment in the Web3 and NFT fields in 2022.
As a traditional Internet venture capital fund established in 2000, Lightspeed Venture Capital may not be able to become the benchmark and leading capital of the encryption industry like a16z or Coinbase Ventures, but its accumulated investment strength over the years is also a force that cannot be underestimated.
For investment institutions, investment income is the absolute proof of strength. To understand the record of this established institution in the new world of encryption, we have to speak with facts.
Crypto investment map
The following is the analysis and arrangement of the basic data of Lightspeed Venture Capital:
- Sorting out the official website and public information of Lightspeed Venture Capital (USA), the incomplete statistics of Rhythm found that since 2013, Lightspeed Venture Capital has invested in a total of 19 online encryption projects, of which 14 projects will be invested after 2021, accounting for 74% %.
In contrast, a16z will launch 63 projects in 2021, 29 from Three Arrows Capital, 25 from Alameda Research, 24 from DCG, and 24 from Multicoin Capital.
- As a veteran Internet VC, Lightspeed is obviously not so obsessed with token issuance by project parties. Among the 19 projects, the tokens of only 5 projects have been launched, accounting for only 26%.
- In terms of investment categories, Lightspeed Venture Capital's investment scope includes NFT, DeFi, GameFi, public chain and infrastructure fields. Among them, there are 2 public chain projects, 10 infrastructure projects, 2 DeFi projects, 2 NFT-related projects, 2 Web3 decentralized applications, and 1 GameFi. Infrastructure projects accounted for 53%.
- Strictly speaking, Lightspeed Venture Capital is not considered a native crypto VC, but it still has 7 leading investment shares, accounting for 37%. The performance is commendable.
Looking deeply at Lightspeed Venture Capital's crypto investment history, you will find that there are good opportunities for investment in each cycle.
- Betting on the old public chain Ripple in 2013, you can get a super high increase of 354 times XRP.
- In the A round of 2018, the decentralized music application Audius was invested, and the token increased by 16 times.
- In 2021, Lightspeed Venture Capital has successively invested in Terra, one of the hottest public chains, and FTX, the most sought-after trading platform, and led the seed round of Hawku, an NFT trading platform with a number of promising capitals.
Deep binding FTX?
The relationship between the two institutions has also come under the spotlight as FTX tapped Lightspeed Partners to manage the new fund. One is an established institution that grew up with the Internet, and the other is an emerging force that has risen rapidly in a short period of time. The two seem to have established a connection.
Taking a closer look at the investment history of Lightspeed Venture Capital, FTX has participated in 9 projects in various ways, including investing in FTX itself, accounting for 47%. Coupled with the joint launch of the encryption fund by the two, it seems that Lightspeed Venture Capital has been deeply bound with the new encryption force FTX.
However, further analysis reveals that among the above 9 projects, 6 projects are led by Amy Wu. Although Amy Wu himself claims to still retain the title of partner of Lightspeed Venture Capital, her Twitter introduction has become FTX Ventures. With the change of Amy Wu's position, Lightspeed Venture Capital will inevitably become a thing of the past. It remains to be seen how deeply FTX is bound to Lightspeed.
Interestingly, Amy Wu is not the only Crypto talent that Lightspeed has lost.
In the investment history of Lightspeed Venture Capital in 2021, besides FTX, another prominent name is Terra. The former Lightspeed Venture Partner who led this investment is Natalie Luu. In December 2021, Luu has announced that it will join Terra as the head of ecosystem development.
The fact that partners continue to rush to native encryption companies may reflect that Lightspeed Venture Capital still has reservations about Crypto. At present, Lightspeed Venture Capital itself has not established an independent fund for the encryption industry, and its investment pace is still slow compared with a16z and other high-profile VCs. In the ever-changing encryption industry, this kind of caution will undoubtedly appear passive.
How to judge a VC
In the encrypted arena where there are many gangs and different styles, what kind of VC is considered a good VC?
From the perspective of serving entrepreneurs, Richard Malone, director of operations of Advanced Blockchain AG, divides funds into three basic categories: Brand Funds (brand funds), Specific Value Add Funds (special value empowerment), All-Purpose Service/Value Add Funds (usually started and conducted as incubators and accelerators).
In layman's terms, Brand Funds play an endorsement role, and these Brand Funds often refer to well-known funds. Startups receiving investment from these funds are the equivalent of attending an Ivy League university or owning a Hermès Birkin bag. When a company's investment institution adds the name of these Brand Funds, it will trigger a FOMO sentiment among other funds and retail investors, which will bring more resources.
Lightspeed Venture Capital is undoubtedly one of the Brand Funds. As a well-established institution familiar to the financial world, this name will undoubtedly give startups a layer of gold.
However, it is easy for Brand Funds to sit on past achievements and "eat their laurels". Lightspeed Venture Capital has made a lot of achievements in the traditional Internet field, and it cannot cover up its slightly passive situation in the encryption industry. With a16z, Coinbase Ventures, Multicoin Capital and other VCs advancing rapidly in the Crypto world, the slower speed of light seems to be going backwards.
From the perspective of an objective and neutral third party, a good investment institution needs to be able to discover good companies and tracks in advance, and then present them to the world. As Chen Yuetian said in the article "Spark Prediction 2021", VC should be the person who reserves the possibility of various changes for this world. Prometheus brought the fire, and VC should be the one who spread the fire.
Reflected in investment behavior, for the same transaction price, institutions investing on the left side of the peak of the price curve have a higher level than institutions investing on the right side. An organization that grabs Alpha at the seed round is better than an organization that FOMOs into it later. For Lightspeed Venture Capital, no matter in the investment opportunities of Terra or FTX, it is of course great to be able to capture Alpha, but it still has not yet achieved the fastest and top level.
In the ever-changing and chasing crypto VC industry, when other players are running with all their strength, Lightspeed Venture Capital, which still has spare capacity, will inevitably not be able to occupy the leading position in the head. By the time it really pays attention to the growing Crypto world, it may be too late for the industry to play completely differently by then.
