This VC has invested in the crypto for a decade. He has 3 tips for those who enter the market
Jake Brukhman is a computer scientist who worked on Amazon and Wall Street before founding Coinfund, one of the first venture capital companies dedicated to the investment of cryptocurrency. He is also the latest guest of the new Podcast Crypto Playbook of Fortune (available on Spotify, Apple and Youtube) where Brukhman shared his ideas according to a decade of investment – and offered very practical advice for those who come to this market for the first time.
His first advice for newcomers is that it is the surest to choose major cryptocurrencies that have established history. This will allow investors to expose themselves to the crypto and benefit from its increases, while allowing them to stay away from hyper-valatility and squarely scams that can be accompanied by more recent projects.
“As a new participant who has just entered space, it is absolutely much safer to stay with the big names. You are not going to be wrong if you invest in Bitcoin, by investing in Ethereum. These are projects that have existed for over 10 years at this stage, and which have very well established communities and ecosystems, “said Brukhman.
Coinfund had the chance to invest in Ethereum when it was only 60 cents, compared to nearly $ 4,000 for which it is negotiated today, but his advice is still holding.
In the podcast, Brukhman then noted that, while the cryptography industry has matured, a set of standards and railings emerged to ensure that blockchain projects are managed in a responsible manner. These new practices focus mainly on the management of tokens and the creation of incentives to align the founders and investors.
In the past, especially during the initial currency offering a 2016 mania, the founders of the Blockchain project would rush to sell millions of tokens to retail investors – and would not manage to follow their plans, which means that the price of the token collapses or collapses completely.
Today, Brukhman notes that responsible projects will include governance measures to protect investors and restrict the distribution of their supplies in a period of several years. He says that 90% of Crypto Coinfund projects choose to support these attributes, which is a fairly clear indication that new investors should also look for these qualities before suppressing their money.
Finally, Brukhman shared that his fund is removing projects with anonymous founders. Although this may seem obvious, it should be remembered that the original attraction of the crypto for many people was a new form of money which was not controlled by governments and which protected the privacy of its users.
The most famous example, of course, is Bitcoin of which the founder Satoshi Nakamoto has never revealed his identity to date. Satoshi benefits from an almost mythical status among crypto fans for having built the first and successful blockchain, and for having acted with total integrity, but unfortunately, it is the exception and not the rule. Subsequent projects managed by anonymous founders have generally turned out to be scams.
Brukhman says that Coinfund supported the founders whose confidentiality choices pass the entire range of the organization of social networks, to those who protect their identity with pseudonyms. But he says that the company is always a point of knowing who they are dealing with before investing.
“From our point of view, we never had to invest in something that had a purely anonymous founder. We have never found a project where you know, it was so important to invest in it that we should have taken this risk for founding anonymity, and therefore we simply did not do it, ”he says.
You can find the whole interview with Brukhman, as well as the first three episodes of Crypto Playbook, here.
