Six months ago, Boris wrote an important post about why the blockchain is disruptive to VC. As a quick summary, here’s why:

1. It requires a new investment thesis: where is value accrued in a decentralized platform?
2. It requires a new way of investing: tokenization by nature makes projects more liquid
3. It might inspire a new way of running our fund: changing your LPA (limited partnership agreement) or offering a token yourself.

Six months is a long time in crypto. We’ve spoken to many more founders since backing Citizen Hex, Blockstack, Coinbase, Metastable, and Polychain. We have welcomed CryptoKitties to our portfolio as well as two more startups that have yet to be announced.

Through these experiences, we’ve come to learn something very important about investing in crypto. While the three reasons above remain valid, we’ve realized that the way we evaluate blockchain opportunities is no different than how we have evaluate any other investment opportunity. The basic questions of investing still apply**:

• Why/Timing: Why now? Why hasn’t your project been feasible at any previous time? Do you really need blockchain technology, and if so, for what purpose?
• How: Is your architecture conducive to creating network effects for defensibility? How will your project scale given the challenges of decentralization?
• Value: What is the business model / cryptoeconomics (i.e. guidelines for the behaviour of the token like how it’s created, distributed and earned)? If a token is involved, how will it appreciate in value as user demand for the service grows over time?
• Who: Why is your team suited to tackle this project from a technical, business, and mission-driven perspective? Do you have the domain expertise?

In particular, the last question deserves emphasis: given that most protocols are pre-launch, the core differentiation is in people. Crypto requires more complementary teams than ever before: from managing large communities to understanding how to build large distributed systems.

While we discovered that our pre-investment analysis isn’t much different between crypto and other start-ups, what happens after investing? Boris’ points on how blockchain is disrupting VC become very relevant for managing a crypto investment. Years from now, after our position vests, how do we proactively manage a portfolio of tokens? When is a good time to exit our position?

As we think about augmenting our team with a new member some time this year (stay tuned for more news on this), we wonder what complementary skillset s/he might bring both technically (i.e. if we decide for self-custody of our crypto assets) and financially (i.e. when to buy, sell, trade tokens)?

It’s fun to think about how we will evolve as a fund, and we would love to brainstorm with other investors on how they are thinking about building their partnership for crypto as it matures.

** Special credit/thanks to my good friend, Maryanna Saenko, who inspired this list during her presentation at the CryptoChicks Hackathon and Conference in Toronto.