I’m at a point in my life where I can look for low probability high return investments, as I have nearly no responsabilities. I do so by investing early in projects (VC) or by exposing my portfolio to high potential markets. The one I’m the more exposed to (to not say only) is web3. I have a very low diversification in other markets. Without successes, this time will not last forever as I’ll need to dilute my risk when I’ll have a family for example, but I need to play this game now if I want to take the opportunity to change my (and my family) financial path.

I’m more enclin in web 3 and VC as they both are highly volatile markets and so potentially provide high returns. But my love for those domains goes beyond pure financial returns.

Doing early investments is of course a way to maximize potential outputs. But it is also a way to deep dive into a market in order to better understand it, build relationships, a network etc. Indeed, the access to deals and selecting the good ones being difficult, you have no other way around than to better understand what you’re investing in, have insights from other people etc. It differs a lot from low risk assets : S&P 500, ETF’s, … where a lot of people do not really understand what or why they’re buying (and to be honest, you don’t need it as you’re not really actively managing a portfolio).

As a VC, my goal is to capture as much growth as possible from this market and doing so by joining entrepreneurs and giving them some fuel. They need fuel to build what they have in mind and what they all have in common is to make the market a better place and get rewarded for it.

VCs, we always win. At least long term. Even if we don’t financially win. Let me explain my thoughts: If you look at the market in macro, even the startups that failed made the market have a positive impact:

  1. They made the kind of solution known and understand by potential customers, embedding new users
  2. I a way, they may have improve the technology or even unlock a bottleneck.
  3. They made research in the field
  4. They tested an innovative approach to a problem
  5. Employees improved their skills
  6. It inspire people (customers, employees, or just spectators) to do things in this market

No startup does nothing at all. All this work, as tiny as it can be, will compound over time and will nourrish the market.

Most projects fails. Some succeed. That’s the hard rule of the world. But we have to back entrepreneurs who wants to make the wheel start and try to build something. And one day, all the stars will be aligned for an entrepreneur to succeed. Everything would have been setup and nurtured by all the previous failures and by hard work and dedication he will succeed. As an investor, you surely want to be here at this time. But the probability of being present in the market just at this time is very low. You greatly improve the probability if you were there early on, pushed the market, the entrepreneurs, suffer setbacks : TL;DR > nurture the market. All efforts pays one day.

Notes

I view web3 as a specific type of VC investment. You can position yourself by buying the token or while investing in the compagny. Market being liquid and volatile, you can even have early deals a few years after token launch.

Carlos