Hello world, and welcome to the eleventh issue of Thursday Thoughts.
Each week, founders and investors share their thoughts on fundraising trends and strategy.
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Viktor Bunin founded the Bison Trail’s Protocol Operations team in 2019, as an early employee. He joined Coinbase when Bison Trails was acquired by Coinbase in January 2021. He’s also been a prolific angel investor, having backed companies like Lido, Goldfinch, and Thesis.
Viktor sat down with us and dropped a ton of knowledge about how he thinks about investing.
How did you start angel investing? What have been your biggest learnings/mistakes so far?
I started when Matt Luongo from Thesis invited me to invest in Keep Network. We had been working together for a while at that point and he wanted me along for the ride. My biggest mistake so far is not valuing momentum highly enough. Teams that have been shipping, tend to keep shipping, which drives most of the returns. I undersized most of my highest return multiple investments because of this. Oops!
You've managed to build a solid personal brand on Twitter - how helpful is this to getting into crowded rounds?
For every single one of my angel checks so far, I’ve been brought in because of my value add across protocol expertise, token & incentive design, and network. My Twitter reputation is very helpful for becoming a known quantity, but I haven’t seen it contribute to my angel investments.
Angel Investors seem to be evolving into 'Solo Capitalists' as they become a bigger part of capital markets - do you think they should operate like traditional firms when it comes to managing reserves and investing their pro-rata in follow-on rounds?
Funnily, this came up in last week’s Thursday Thoughts with Richard Chen. Funds have very different considerations than angels - they typically have a certain time horizon to invest, they have a target investment pace or a number of portfolio companies, and they have to return the fund before the partners see a dollar of carry.
Angels, on the other hand, are generally swinging for the fences with every check and don’t have any pressure to deploy. They’re also generally coming in very early and may not get pro-rata rights to participate in follow on rounds - particularly in this competitive environment.
If I had to decide whether to put an incremental $10K into a follow-on round for an existing portfolio company where I can get a 10x versus $10K into a new company that I believe has a chance to be 100-1,000x - I’d prefer to allocate to the new company. That said, each angel is investing their own money so they have complete discretion.
You are now working at Coinbase after they acquired Bison Trails in January; how do you leverage your current position when investing? How do most founders generally get on your radar?
Thanks to my work at Bison Trails / Coinbase, I’m very fortunate to have one of the most informed views on the market because I know what’s happening under the hood in all the various protocol ecosystems. While it’s helpful that I see things with a long-term perspective, sometimes it pays to invest with a shorter view - but that would require more actively managing my angel investments, which I don’t do. Generally, I meet founders through my work in the various communities of which I am part. I tend to invest in folks that I already know - friends that I know are strong at executing, ethical, and good community builders.
My wife Lisa and I dabbled with angel investments before, but now that she finally joined crypto full time (as Head of BD for Aztec Network), we decided that we wanted to spend more time and resources as angels. One of the hard things about being an angel is coming up on founders’ radars. Capital is so abundant and as an angel, you’re probably not spending a ton of time searching for deals; you need a certain amount of deal flow to come to you. I think publishing helps everyone - we raise our profile as value-add angels, the teams get additional public support, and the community becomes more informed. I regret not publishing for earlier investments in folks like Keep, Audius, and Lido, but I’ll try to backfill them in future raises.
Thanks again for your valuable insights.
See you on Tuesday for Dove Dispatch #15,