INSUBCONTINENT EXCLUSIVE:
Pantera Capital, a San Francisco firm that has made its mark in recent years by investing early and often in a wide variety of digital
assets, is looking to raise up to $175 million for its third venture fund — an enormous jump from the $25 million it deployed for its
second venture fund and its $13 million debut venture fund, which it closed in 2013.
Firm partner Paul Veradittakit says the target amount
is a &function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds
With more interesting later-stage investments [on our radar], too, we want to be flexible and able to move with the market.
Whether the firm
closes with $175 million or another number is an open question
A newly processedSEC filingshows it has so far rounded up more than $71 million in capital commitments from 90 investors, an amount that
Veradittakit calls a first close.
Certainly, Pantera is accustomed to managing meaningful sums of money
In addition to its venture funds, which are structured like most traditional venture funds — they feature a 10-year investing period,
similar economics, and involve good old-fashioned checks to startups in exchange for some amount of equity — the firm is also juggling
three other strategies.
As we reported last year, one of its newest funds is a hedge fund that focused exclusively on initial coin offerings
As firm founder Dan Morehead told us at the time, Pantera buys pre-sale ICOs, &basically getting a discount to the ICO price by getting in
early, when it just a team and a white paper.& Meanwhile, Morehead had added, &We help provide the right connections, whether in terms of
marketing or recruiting or business development.
The vehicle is evergreen, says Veradittakit, meaning it has an indefinite fund life that
lets investors come and go.
The other two other funds that Pantera currently oversees are also structured like hedge funds
One is a Bitcoin fund that has attracted plenty of investors over the years, and returned a lot to them, too, according to the calculations
In fact, he wrote two weeks ago that the fund, launched five years ago, has enjoyed a lifetime return of 10,136.15 percent net of fees and
expenses.
The very last fund invests in cryptocurrencies that are already trading on exchanges — an approach that includes machine
learning to algorithmically invest in crypotcurrencies, as well as allows for some discretionary input by Pantera top brass, which includes
Morehead,Veradittakit, and Joey Krug, who joined Pantera last year after cofounding the market forecasting startup Augur
(It went on to orchestrate the first ICO on the ethereum network.)
Explains Veradittakit of this last pool, it for &if you are''t sure that
Bitcoin will remain the dominant cryptocurrency, or you&re interested in other use cases that may arise, or you just want to build a
diversified portfolio of assets that have asymmetrical returns as bitcoin, or maybe return even more because they feature lower
valuations.
In some ways, the venture efforts of Pantera — which employs 38 people altogether in San Francisco and Menlo Park, Ca
— may be its most challenging given the nature of VC
Investors in the asset class are typically willing to wait a handful of years for a firm to produce returns; in Pantera case, because it is
bettingexclusively on ventures, tokens, and projects related to blockchain tech, digital currency, and crypto assets, some of those returns
could potentially take even longer.
Veradittakit doesn''t sound concerned
Rattling off some of Pantera venture investments to date, including inBitStamp, Xapo, Ripple, and Circle, not to mention more recent
investments in Chain, Abra, Veem Polychain, and Z Cash, he sounds more like a proud parent
Pantera has invested in &lotsof wallets and exchanges focused around the world, in Coinbases of different geographies, in enterprise-related
More recently, we&ve funded everything from big data to decentralized application platforms.
It still very early days, he acknowledges
But &in terms of returns, there will be companies that create something completely disruptive
There will be MA [opportunities] more often and that [come together] more quickly than other companies.
If everything goes as planned,
Pantera will be there when they do, and it will have more resources to deploy than ever.
