"Look, how beautiful the picture quality of "BIG TIME" is!"

The investor sitting across from him showed the test video and introduced it in Mandarin with a Hunan dialect. He was very happy. His organization had achieved hundreds of times the return on equity in just one chain game project "BIG TIME".

This investor is Yi Lihua, founder of LD CAPITAL.

As LD CAPITAL captures many Alpha projects in this bull market cycle, Yi Lihua has also become the so-called "Boss Yi" again.

"Unbelievable"A traditional Shanghai investor who has had contact with Yi Lihua commented on his experience, "A few years ago, Yi Lihua was still "pimping". I became a "big guy in the currency circle", and then I heard that they were dying in the bear market of the currency circle, but I didn't expect to make a comeback."

From a poor kid in rural Hunan to today's "VC boss", Yi Lihua's life trajectory vividly explains what is the blockchain revolution under the opportunity of the times, and LD CAPITAL, which he founded by himself, took off with him.

Starting from US$500,000 without external financing, LD CAPITAL invested in hundreds of projects within four years, rapidly increasing its assets to over US$1 billion,yet questioned and controversial。

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Buds and setbacks

"My life has no water at all. You don't know how difficult it was before. I took a bad hand to this day, and I have a big dissatisfaction in my heart."

In September 2018, Yi Lihua returned to Loudi, Hunan, and said so when he donated money to establish the "Teaching Assistant Grant" at his alma mater, Xinhua No. 1 Middle School.

"I am a rural child with nothing. I longed to get rid of that world since I was a child. I came to Shanghai to study in university and started a business in university. I was deceived all the way from failure, to starting a business and earning the first pot of gold, and then to classical investment. Those are not what I want. The world I wanted, until the blockchain gave me a weapon, this desire sustained me.”

This is a snapshot of Yi Lihua's first half of his life.

Three chances, change a life.

In 2013, the municipal government of a certain city was attracting investment. After getting the news, Yi Lihua searched for all the business owners he knew in Shanghai, selected 60 of the 400 people, and then helped them fill out more than 40 pages of application forms. Application materials, covering all aspects from technology, team to business model. In the end, 20 people declared successfully, and Yi Lihua earned the first 5 million in his life.

In 2015, I first got to know Bitcoin. Yi Lihua put one-third of his assets into BitSE for mining. At that time, one bitcoin was only 1,000 yuan.

At the end of 2016, there was an upsurge of "Isio". Yi Lihua invested 100,000 yuan to participate in the angel round financing of Quantum Chain, and won 100,000 Qtum. In May, Qtum was launched for trading, and the price quickly soared to 100 yuan, and the highest once reached 600 yuan, earning a hundredfold income for Yi Lihua . Since then, he has successively participated in the financing of Vechain, EOS and many other projects, and has gained a lot.

Through "Isio", Yi Lihua obtained the "first pot of gold" in the true sense. In January 2018, as a continuation of his personal investment, Yi Lihua officially established Crypto Fund LD CAPITAL.

From the first day of its establishment, Leap Capital has been a hot topic and controversial.

On the one hand, the network quarrels between Yi Lihua and the encrypted OG are eye-catching; on the other hand,Leading Capital's investment is too aggressive and high-profile。

In the first ten months of its establishment, Leading Capital invested in more than 80 projects.

It is reported that,

It is reported that,Yi Lihua also had the opportunity to participate in the earliest investment in Binance, but because of a few words of persuasion from his friends, he did not personally DD (due diligence), and finally missed it on his own initiative.

Either the regret of missing Binance, or the long-term optimism about the track,As a result, Yi Lihua has always had exchanges。

In addition, Leading Capital has continued Yi Lihua's investment style during the "Isio" upsurge,Rapid investment in a large number of "domestic projects"。

In an exclusive interview with Chain Catcher in 2018, Yi Lihua once talked about the investment logic——"Don't define any project, just look at the speed of evolution". At the same time, he also introduced the investment decision-making process of De Capital, saying frankly"The investment decision-making time is very short. Everyone thinks which project is good, and if there is no problem in the discussion, invest immediately, and the decision can be made within a day."

At that time, both Lide Capital and Yi Lihua himself were extremely high-profile in the industry.

A typical scenario is that one day in 2018, Yi Lihua posted a"Leader Capital Strategically Invests in HiChain"According to the news, after the explosion of the WeChat red envelope group, the long-silent blockchain media reporters and related practitioners have "sent blessings".

Quick decision-making, massive investment, and a high-profile style of work give you a full sense of capital presence.

However, the short-lived false prosperity was quickly crushed by the bear market. When the "Isio" bubble burst, a large number of projects fell below the issue price when they went online, and there were even frequent cases where project parties ran away.

Angry investors began to investigate the background of various "earth dog project parties", and frequently found familiar figures in investment institutions."How come there is capital everywhere, and the money is cut away by them"。

Regarding the doubts from the outside world, Yi Lihua said thatunderstandable yet innocent。

On the one hand, the capital is considered to be a "sickle" for harvesting the market. On the other hand, Yi Lihua stated in the circle of friends that the capital lost 600 million yuan in 2018.

"I understand the market's views very well. First, most of them don't know the project party, but they are very familiar with several investment institutions. Some people must blame the investment institution for the failure of the project; change,Average investment ability, but unusually high-profile, it is bound to attract people's dislike. "

The loss of both fame and fortune, coupled with the bleak market environment, made the capital once on the verge of bankruptcy. After learning from the pain, Yi Lihua and his team conducted a deep reflection and made four adjustments:

First, focus on investment and cut off all businesses that have nothing to do with investment.

Second, try to keep a low profile and try to improve the awareness of the industry and the track.

Third, improve post-investment service capabilities in an all-round way, and obtain recognition and support for high-quality projects.

Fourth, despite the tragic investment failure in the bear market, we still have to firmly believe in the future of the blockchain.

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bull market winner

Entering 2021, "Leader Capital" has disappeared, replaced by LD CAPITAL, which has frequently appeared in financing news of various projects.

The investment style is still aggressive, but this time it's a little different.

No longer only investing in exchanges and "domestic dogs", Flow, Mina, Assembly, Flare, Immutable X, CoinList... Many international first-line projects have appeared in LD CAPITAL's Portfolio.

In the field of NFT and GameFi, LD’s investment portfolio is even more Alpha-gathered: block chain 3A game masterpieces Illuvium and Bigtime, distributed rendering network Render Network, star chain game Star Atlas of Solana ecology, and Alien Worlds (TLM) who first launched BINANCE IEO ...

Benefiting from the GameFi boom, LD obtained an extremely exaggerated return on investment ratio.

image description

LD invests in some high-return investments in the GameFi field

How did LD CAPITAL transform and obtain investment opportunities in high Alpha projects in the highly competitive primary market?

From the views of many LD CAPITAL investment managers, you may be able to get a glimpse of the answer to the question.

1. Dare to vote.

LD CAPITAL, as always, adhered to the style of daring to bet. Fortunately, this time, it was on the eve of the bull market.

On March 12, 2020, after a historic crash, the primary and secondary markets dropped to freezing point. Most entrepreneurs and investors chose to leave or wait and see. LD CAPITAL relied on its belief in the blockchain With a surge of momentum, choose "ALL IN" and speed up the layout in the primary market.

In the words of investment managers, the short gap after 312 is actually a golden vacuum in the primary market:The competition is small, and it is relatively easy to invest; the valuation is low, and the valuation of many high-quality projects is only around tens of millions of dollars; entrepreneurs who choose to move forward in the industry's downturn are more worthy of trust and investment...

More importantly, LD dares to be the first investor of the project, regardless of whether other VCs have already participated in the investment.

"We are the first investor in many projects, not only giving money, but also giving confidence to the founders. This is of course a risk, but we think it is worth it," Yi Lihua said.

2. All-round post-investment.

LD CAPITAL regards post-investment services as an important bargaining chip for its "winning" projects, claiming that all staff will do a good job in post-investment services, including but not limited to strategic consulting, economic model design, capital and platform relations, market brand growth, ecological cooperation, technology Development and Talent Acquisition etc.

For example, after investing in a transaction aggregation agreement, LD not only assists the project side in obtaining investment from top overseas VCs; it also assists it in connecting with IDO platforms and large exchanges, finding overseas well-known KOLs and communities for cooperation, and cooperating with other DeFi projects. During the development and construction of the project, a Token has not been withdrawn.

3. Talent and motivation.

People are the core of all investments, how to attract better investment managers? How to motivate investment managers?

Due to its own funds, LD CAPITAL has a more flexible incentive mechanism:Share the investment quota with the investment manager, up to 30% can participate in the investment, and this proportion will continue to increase, and the final investment director can participate in more than 50% of the investment.

Therefore, some people once joked that in LD, they are investing in themselves, and by the way, they took the boss to make a vote.

In addition, partners can play an important role in the investment of top projects. Each partner has its own resource network and core competence circle. The Pitch and investment of top projects such as Illuvium and Bigtime largely rely on partners personal ability.

Compared with many other VCs who have started to lay down their Buddhist beliefs, LD can be regarded as the hardest group in the industry. Partner Lee Xi said,I haven't slept well in two years。

Currently, LD has nearly 40 employees and is still actively expanding.

4. Start anew.

Why did LD CAPITAL seize the investment opportunities of NFT and GameFi?

A blessing in disguise.

In 2020, after experiencing the DeFi Summer, the DeFi track is extremely hot. However, high-quality projects are mainly concentrated in Europe and the United States. As an Asian institution, it is difficult to participate in the investment of leading projects. To put it bluntly,LD wanted to invest in top DeFi projects but couldn't.

Therefore, LD had to turn to research new tracks and opportunities. As early as two years ago, a partner of LD began to study NFT and GameFi. After discussion, LD decided to bet. The logic of judgment is that this is an out-of-the-box track. DeFi can capture a large amount of TVL, but it is concentrated in a few people, while NFT and GameFi can bring in a large number of users. Any opportunity exists in a huge incremental market. The past Web2.0 era has proved this point,Have users to have the future。

5. Going to sea & offline

LD CAPITAL realized one thing very early on, "the encrypted world rises from west to east and falls from the east". With a large number of high-quality projects in the United States or Europe, "going overseas" has become a must.

Therefore, LD began to recruit in the United States and Singapore, actively participated in various offline conferences and activities, and expanded projects.

The epidemic has blocked the world, and a lot of communication is carried out online,But it is easier to establish trust and connection between people offline, and the Pitch project is simpler and more direct.

Through active offline running,image description

LD Personnel in the United States

6. FOF and resource network

In September 2021, LD Capital announced the establishment of a US$50 million blockchain fund of funds to invest in global outstanding blockchain funds.

According to the official website, LD has invested in 1kx Capital, Kraken Ventures, Republic Fund, Shima Capital, BigTime Ecological Fund, DHVC and other funds.

Yi Lihua said that FOF investment mainly has two purposes,One is to make friends around the world, get to know more partners, and discover more good project investment opportunities; the other is to reserve more resources for projects and provide post-investment services. Many institutions have different advantages and hope to combine them to help invest in projects. Post-investment service is the core.

On the one hand, VCs such as Shima and Republic have become LD’s Deal Sourcing, and on the other hand, LD is also building a network to connect with top projects.

For example, after LD invested in DAOMaker, it got a lot of deals.

A top AAA GameFi project invested by LD has introduced other top projects for LD, such as P2E game association Polemos, which recently announced the completion of a $14 million seed round of financing,Framework Ventures and Delphi Digital led the round, with participation from LD Capital.

If I want to talk about the last point, it is persistence and persistence. In order to vote for a project, LD is willing to "lower his profile and pay attention to Maolu".

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Compete for bargaining power

In terms of financial returns, LD Capital can be called the big winner in this bull market cycle, but there is still a big gap from the first-line Crypto Fund.

Regarding the evaluation criteria of VC, a Crypto VC practitioner said:"The standard of VCs evaluated by laymenIt must be based on how many times the profit is made, but VC in the industry is based on the scale of funds, ecological card position, and voice. "

Compared with the real first-line VC, LD still lacks "bargaining power".

Today, among countless VCs in the encryption world,Only a16z,A few investment institutions such as Paradigm, Binance Labs, and Multicoin Capital.

Bargaining power comes from brand and post-investment services (Value-added).

An objective phenomenon is that on the brand side, LD Capital is still dragged down by "historical memory", resulting in some projects and FUNDs still rejecting LD Capital's investment, and even when the deal is negotiated and the payment is about to be made, the project Fang temporarily repented,Because some of the other VCs involved in the investment think that LD Capital is Pump & Dump Capital.

Generally speaking, there are two types of VCs in the industry. One is Pump & Dump, everything is only for greater financial returns, without Value-added, and even sells all Tokens when it goes online, hurting the project side.

The other is DiamondHand, which not only holds it all the time, but also continues to provide Value-added, such as in January this yearCoinbase Ventures says it never sold tokens it invested in。

Yi Lihua believes that LD is in the middle of the two, because it has its own funds, so the strategy is to exit some projects to support new projects. However, when choosing to withdraw, LD will fully communicate with the project party to respect the demands of the project party, and make long-term investments in projects that continue to strive for iterative growth and believe in compound interest in value growth.

"LD is seriously opposed to unlocking and smashing the market, and also strongly opposes this type of investors. Between extreme profitability and market respect, LD chooses the latter."

In addition, the "LobsterDAO Crypto VC List" circulated before also caused serious troubles to LD's investment. LD Capital was blacklisted in the list. Although LobsterDAO later refuted the rumor that the list had nothing to do with them, the list has already It was widely disseminated in various communities and social media.

Regarding the opinions of the outside world, Yi Lihua said that he no longer cares about it, "Focus on doing your own thing well, the times have changed, in addition to investment,LD will focus on overseas brands and creating better post-investment services in the future. Currently, most of the newly recruited talents are preparing for post-investment services.”

According to the LD investment manager, the situation of being rejected for investment has also been greatly reduced."Because there is a positive cycle in investment itself, it is easier to invest in other good projects if you invest in a good project, LD has proven himself with Portfolio, especially in the GameFi field. What's more, LD will provide a full range of post-investment services for the project side. "

So, will LD continue the previous Haitou style?

"Maybe our team is strongly optimistic about the future of the blockchain, and we can't help but support those teams that show innovation and ideals, and are the first investors who dare to be the first investors in projects," Yi Lihua explained, but changes are also taking place.

"We are also resuming and continue to improve,We must leave the bullets to the best teams, and use services and resources to support top-level projects. Therefore, we have recently started to act and change. The investment in the last two months is basically a heavy bet on top-level projects., I believe that the market will see a brand new LD Capital in the future. "

Regarding the promising direction in the future, the LD investment manager said that he is still looking for various WEB3 applications that can be widely used in the circle, and games are still an important part of it, such as blockchain games such as Bigtime and Cradles.

Bigtime is a AAA chain game masterpiece launched by Ari Meilich, the co-founder of Decentraland. The team members come from first-tier game companies such as Epic Games, Blizzard, EA, and Riot.

Cradles is an RPG game with a prehistoric civilization background. It creatively introduces the time and entropy system, and integrates the time and space rules of the real world into the game for the first time.

The Cradles team has developed a new NFT standard, EIP-3664, for this purpose.Added operability modules to static NFTs, turning them into a "flexible", "living" NFT, For example, NFT has the characteristics of attribute decay to simulate the aging of items in the real world.

The modular public chain is another direction that LD is optimistic about.

A public chain can usually be decomposed into a consensus layer, a data availability layer, and an execution layer, and most public chains at this stage are single-chip chains. With more and more nodes on the chain and larger blocks, transaction congestion is inevitable. Therefore, modularization has become a trend,The Rollup in Layer 2 that we often hear is also a product of blockchain modularization and is responsible for executing transactions.

On this track, LD bet on the smart contract chain Assembly developed by the IOTA team. Assembly allows developers to freely create their own smart contract chains according to their needs, which is somewhat similar to multi-chain networks like Cosmos or Polkadot. The difference is,Cosmos is still loosely self-made by each chain, and there is no shared security, while the Assembly chain relies on the L1 consensus security layer of IOTA 2.0 to solve the shared security problem.

Overall, the growth of LD has gone through three stages.

In 2018, LD Capital was more like a "speculative VC" with an upstart mentality; in 2021, LD Capital began to internationalize and gradually formed its own investment methodology; now, LD Capital is moving towards version 3.0:

(1) Be more focused and place heavy bets on top projects.

(2) Create a higher-quality all-round post-investment service system to empower projects in depth.

(3) Go overseas in an all-round way to enhance the global brand influence.

(4) Dare to be the first investment institution of the project party.

In general, both LD Capital and its founders are full of stories and controversies. Trying to define LD Capital is difficult. It benefits from the belief and persistence in the blockchain, and even has a little bit of good luck. It swept the world in WEB3 In the wave of the times, stepping on the waves has become a typical sample of Chinese Crypto VC.

In the future, WEB3 will inevitably be a global competition, and the primary market will be more cruel and "class solidified". Can LD Capital completely get out of the "brand shadow", find its own survival fortress in a more western encrypted narrative context, and gain more More right to speak?

I don't know, but the rushing river can only rush to the sea, and there is no turning back.