It's all nonsense. It's all air. And, you know, speaking in simple heuristics, right?
You tell children, don't take candy from strangers. There might be a lot of great strangers with
a lot of fine candy. All right. It might taste great. It might be very safe, but you tell
children that, right? So when you're investing, whether it's in crypto, quote unquote, or
any of these startups like just have Bitcoin, like that's the heuristic, you know, you might
miss out on a little bit of candy, but you won't die.
Greetings and salutations, my fellow plebs. My name is Walker, and this is the Bitcoin
podcast. Bitcoin blockade is 820060. And the value of one Bitcoin is still one Bitcoin.
Today's episode is Bitcoin talk, where I talk with my guest about Bitcoin and many other
things as well. Today, that guest is Mike Yarmuths. Mike is Lightning Ventures, managing partner and
co-founder from punk rock to venture capital. This dude's got some stories. We go deep down the
Bitcoin venture capital rabbit hole in this episode. So whether you're a Bitcoin founder or aspiring
founder looking for advice and investor looking to put some money in Bitcoin only companies,
or just a pleb who likes to hear Bitcoiners talk shit about shitcoiners, this episode has
something for you. Mike also digs into some of the Bitcoin companies he's really passionate about.
And these are definitely names you should pay attention to. You're going to be hearing a lot
more about them in the years to come. As always, you can watch the video version of this episode
on rumble, YouTube or X by searching at Walker America or listen on fountain.fm or wherever
you get your podcast by searching for the Bitcoin podcast. If you listen to the Bitcoin podcast
on fountain, consider giving this show a boost or making a clip of something you found interesting.
If you haven't checked out fountain yet, I highly recommend it. You can send Bitcoin your
favorite podcasters and earn Bitcoin just for listening to this show. And if you are a Bitcoin
only company interested in sponsoring another fucking Bitcoin podcast, hit me up on social media
or through the website, Bitcoin podcast.net. Without further ado, let's get into this Bitcoin talk
with Mike Yarmuths. Well, hey there. Well, hey there, buddy. How are you? Dude, I'm doing great,
man. It's good to see it's been way too long. It's good to see you too. It has been too long.
I'm upset that I'm going to miss you next week. Everyone's going to miss you. But
you got bigger things going on, literally bigger things. Carla has an impressive belly on her.
She is definitely ready to pop. We'll see if the little guy waits until he's supposed to,
but you never know. He might be born two weeks late or two weeks early. I was actually two weeks
late. What about yourself? Were you right on time? I think I was right on time. As far as I know,
I guess I haven't asked my mom if I was a surprise in that sense at all. But yeah, we're bummed. We
were looking forward to Unconfiscatable. I mean, that's where Unconfiscatable is where we first
met you in the flesh. I remember being a bit intimidated by you at first because I was like,
damn, this guy's running shit right now. He has not taken anyone's bullshit. We ran a tight ship.
That was our first Bitcoin conference. That was what? It's like February 2021 now? Is that
Sunright? I think it was last year. Was it only last year? Oh, yeah, shit. It was 2022.
Yeah. It was our third one. Yeah. That was the first that I had heard of the crypto couple.
That was really cool. That was a tone discovery. He's like, hey, they're going to host the
Scammys and they're super funny. I was like, I never heard of them. You guys not only are all of
those things, you are actually lovely people. Which is always a nice surprise, right? I still
remember the first time Tone hit us up and we obviously knew who Tone was. We're like, oh,
damn, Tone Vase is wanting us to come and do something called the Scammy Awards. Then we get on
a Google Meet or whatever with him. He's like, hey, so basically I love what you guys are doing.
And I think it would be great if you hosted the Scammy Awards. My Tone impression is a little
bit rusty though. I got to work on it. It's actually great. It's actually probably one of the best.
In fact, that would be a good side event to have at a conference is your best Tone Vase
impersonation. It's just me giving advice in Tone's voice, but I'm giving really bad advice.
Not quality Tone advice. I think we might have something there. We might have a little niche.
I love it. I think that you might even be reigning champion. You're certainly going to be in the
finale in the top few. Well, I would hope so. But I'm glad that we got a chance to do this.
You could also say that that was your big break. Honestly, Tone Vase was our big break.
Yeah. Yeah. It wasn't Michael Saylor retweeting you. It was that Scammy Award show.
The best thing about Unconfiscatable though was one room for everything. So you don't miss anything.
It's not, oh, do I go between these two stages? It's like, no, everything's in here. Just chill in
this room. The booze was flowing. That helped. Vegas, baby. But also because it was so much
more intimate. I think what maybe was like 500 people somewhere, maybe a little more. Is that
sound right? No, less. It's usually between three and 400. Yeah. Okay. Well, it was amazing because
that's where we literally met all these people who have now, like yourself, who have now become
good friends and doing it in... That's the only kind of conference where you could have that level
of personal experience with people, I think, because it's just people hanging out, listening to great
talks and getting into some shenanigans. Man, I lost very quickly in that poker tournament though.
That I was... I had no business sitting at the table and turns out, Tone was sitting next to me.
And as soon as that happened, I was like, oh, I'm so fucked. It's over before it had even begun.
Cool, man. Well, it's your Bitcoin fam.
And now look, now here we are. I wish there wasn't so much distance separating us. However,
I will still drink to closing that distance at some point in the near future. We will have another
Bitcoin or in tow though with our little man coming soon. You got it. You got to find that
first block, buddy. You got to mine that first block in your own way. Oh, yeah. I think I'm debating,
like, man, should I... Do I set this kid up with like a Noster and Pub and Ensec right from the
start? Just get him... Get it out there. So it's like, maybe back... Like, you look 15 years in the
future, he's like, oh, don't worry, son, you don't need to set up your own Noster. I've been saving
you a pair of keys that are ancient now and they're ready for you. I don't know. We'll see.
Yeah. I mean, that would go right along. I mean, you're naming the child Asik, right?
Yeah. Yeah. Asik. Exactly. Yeah. Asik Block Clock. It's gonna be his middle name.
Oh, man. It's gonna be a wild ride. The crazy thing is there's a lot of pregnant
Bitcoiners right now, which is cool. Like, Bitcoin baby number go up. I think that's a good thing.
You know? Knock them out. Yeah. I'm hoping I'm right there behind you.
All right. And maybe they can all play in the kids area of the country that Bitcoiners will
start together. Do you think like before too long, it's just like Bitcoiners end up just
establishing like one state where they're like, okay, all of us autists did the appropriate research.
We determined this was the optimal state for all these reasons. Now we've overtaken all of the
legislative assemblies in the state and have made it much more libertarian. And now we are just
expanding a Citadel on a state by state basis or are Bitcoiners too perhaps too much of individualists
for that? I don't know. Well, maybe they won't have to do that if one of these sort of territories
and countries makes it kind of Bitcoin friendly, you know, like maybe Madeira or even El Salvador,
which it's still not really super easy to get an El Salvador passport or to do that process.
You know, it's easy to get residency. There's a lot of restrictions on how many days you have to
be in El Salvador and some other things. But if a country was like straight up, sign a message in
your wallet that has three bitcoins in it, we're going to give you a passport, come here. You know,
I'd probably get a lot of wealthy UTXOs up in there. Honestly, I still have yet to make it to
Madeira. But I look forward to going there because man, that looks like just a little slice of heaven.
Well, clearly, you're going to be packing up Carla and the newborn and flying out to a small island
for in March, right? Oh, man, I think it's going to be too soon. We were honestly, yeah, we were
debated it for like a second. And then we're like, you know what, that's going to be a very,
very small baby to be going on planes, trains and automobiles with. But there will come another time.
But again, we'll have to send our love from afar for a little bit. Absolutely. From the cold northern
climates here, we won't get any of that delightful sun and sea air for a while. Yeah, what happened
now? You're in the cold north. I thought you guys were desert rats. I thought you were going in
Nevada and that was going to be the place. I pictured you with like a mullet going to like the
QT Phillyn station to get like a 64 ounce like Pepsi and just like, I thought you were going to
embrace it, man. I'm just kind of a little bit offended that you pegged me as a Pepsi guy. I
don't know that for for some, the mullet is not at all offensive. That's pretty par for the course.
Like my hair is short right now, but we so we were, we honestly, we were out there. We were
planning on moving there after spending like five months or so there, we're going to move full time.
And then Carla was pregnant. And so we were like, huh, you know, maybe better to move back to the
Midwest. We've got family here, be a little closer to both sets of grandparents while the kid is,
all the kid is young and also be closer to a couple sets of hands to assist us. That was a,
that was another big determining factor. So closer to grandmas and grandpas,
because I got to say, I do miss that Vegas sunshine. It's, it's just nice. It's fucking,
it's cold here in the North woods now. It's, but hey, what can you do, right?
Yeah, well, you got family and you got other things there.
Yeah, yeah. But hey, I can't complain, you know, what a beautiful time to be alive.
What a beautiful time to be able to spend an afternoon chatting with a friend about Bitcoin
and about Bitcoin venture capital. So I'm, if you're good with it, let's, let's dive into this bad
boy. You want to, I've got some questions for you, but we'll keep it loose. We'll, we'll keep it fuzzy,
mushy, if that's an expression and we'll just go with it. Yeah, man. Yeah, man. Yeah, I've been rolling
this whole time also. So I'll, I'll cut out anything incriminating, but all about that
pre-roll amount, the pre-embols, what, what makes it, you know? Yeah, I have a suspicion that there's
some good stuff that comes out early before you, you hit the button. A little, yeah. And I'm just
stoked to have you here, man. So let's just, let's just fucking dive in. So greetings and salutations
to all of my fellow clubs. My name is Walker and this is the Bitcoin podcast. I am joined today
for a Bitcoin talk episode by Mike Yarmuz and I still always struggle. I'm saying Yarmuz correctly,
right? Or Yarmuz. I am never, I'm never entirely sure. Yeah. Well, I'm never entirely sure,
actually. And, you know, I went through my whole life as Jar Muzz. I was the Muzz man. My friends
called me Muzz. I've been Muzz my whole life and I used to drive a yellow taxi in New York City
for a brief hot minute. And I was getting the keys to this yellow cab and this crazy dude,
like he was like 300 feet tall bald. He was screaming at me and he screams Yarmuz. And I'm like,
it's Jar Muzz. And he's like, I'm from Poland. You don't even know how to say your fucking last
name. It's Yarmuz, cab 48. And throws the keys at me or whatever. But so then it's like, okay,
well, now what am I going to do? I'm going to change my name now. I'm going to say
it a whole different way. Man, that's a, that's an identity crisis if I've ever heard one.
But you are also, it's always easier to call you Muzz or the Muzz man. It just rolls off the
tongue. Well, it feels velvety, but you are a co-founder and a managing partner at Lightning
Ventures. And today we are going to just dive in to the world of Bitcoin VCs. I think it's
something that people are starting to pay more attention to, even, even those who may not be
VCs themselves, but there's a lot of Bitcoin businesses popping up all over. If you're on
Twitter, you're on Noster, you're seeing this stuff really start to take off. You're seeing a lot
more chatter about it now that price is moving upwards of Bitcoin, I suppose. So it goes. But
throughout this whole bear market, VCs like Lightning Ventures, like some others have been
doing a lot of work behind the scenes with these companies, both bringing them capital,
but also coaching them, trying to get them ready for this coming wave of adoption that I think we
all know is right on the cusp, head and right down the pipeline. So I want to, I want to start out
by going back to the beginning. So you mentioned you drove a taxi, but I want to know who is the
Muzman, who is Mike Yarmouche. However, I'm still going to keep messing this up. And how the fuck
did you get here today, man? Wow. Okay. So, jeez, good. So I was born in Arizona. I'm from Phoenix,
so not too far from you, the Desert Rat being out there. And I was really passionate my whole
life about the music business in every possible way. So I was a concert promoter and had a record
label in high school and putting out some friends. There were these little discs, okay? They were
called CDs, CD roms, and releasing friends records on a record label as a kid. And eventually started
promoting concerts. We were one of the largest independent concert promoters in the Southwest.
We did 35 concerts a month in Phoenix, Tucson and Albuquerque from say 50 people up to, I believe
our largest show was like 5,000 people. So a lot of bands, artist development, it's kind of similar
to venture and early stage investing because when you invest in a company early and you maintain a
good relationship with them, you can invest again later. And that's kind of how it is in music in
terms of a concert promoter, right? You establish a relationship when there's 50 people and you
maintain that relationship all the way as far as you can before someone takes them. So there's a lot
of parallels there with that. So I also tour managed bands. I traveled around the country and
some parts of the world in everything from a van and trailer with hotel rooms every night to an RV
to a tour bus, something similar to like an almost famous kind of deal. Nobody actually drove the
bus through a chain link fence or anything like that. But pretty much lived that for a long time.
I was a tour manager and I also did lights. I can do sound, but did that. I also lived above and
ran a famous punk rock venue called the Nile Theater in Mesa, Arizona. That was also a crazy
experience. Had an art gallery in downtown Phoenix where we did shows as well and did a
whole bunch of things. And I had a retail store in Tempe, Arizona, which was also a concert ticket
outlet. It was kind of like a hot topic. We sold belt buckles and weasel cell phone covers and
crap like that. So did a lot of different things in life. And then I managed a band that got signed
to Electra Records. That was before the Warner Electra merger. So that was like a million dollar
deal. We were all in our very early 20s. We all bought some houses, had a great time. And that
was the real tail end before the music industry really fully changed digitally. So that was a
great experience going out to New York and them making their record, which was an awesome record.
Unfortunately, it didn't do that great. But the band toured and just like us bit coiners, when you
put in the real work, the real work might not be what gets you there. You're grinding it out on
YouTube. You're grinding out this new podcast, right? You put in the real work and then it happens.
And the bands that do that too, and the companies, I guess, are really anyone, that's when you are
sustainable. So even though according to the record label, it wasn't a huge success, the band
could still sell out theaters across the country, right? 1500 cap rooms or so and have a very successful
career. So I managed them for a while. And then after that, I put everything I owned in storage
and I went and lived on a Mississippi plantation farm. And I wrote 200 pages about being in the
South. I went to a place called the Crossroads, which is a mystical place where Robert Johnson
sold his soul to the devil at this place to become the greatest blues guitarist of all time. If you
know about the Crossroads is about an hour south of Memphis or so. And I lived on a place called
the shack up in. It was a B and B, which stood for bed and beer. And it was a hell of a lot of fun.
And I ran the place and there were these authentic sharecropper shacks that they brought in on this
old plantation farm and they rented it out to people and it was a ball. And I wrote a bunch
about that. And I thought, you know what, I'm going to move to New York City and start a real
life and start over. So that's what I did. And that's when I started doing a whole bunch of
other things. And I know I've been talking to someone be quiet, but in that process, in that
process after after the New York chapter started, which is where I briefly drove a yellow cab in
the city. I'll never forget that. That's where I really discovered private markets and investing
in companies that were not traded. I've been interested in finance and stocks and all of those
things my whole life, certainly very entrepreneur. I had a ton of businesses. I had a bar in New
York City. We had the second Bitcoin ATM. I had a cafe there too. Thank God we sold it.
And post COVID we sold it. Thank God. So love business. Love all that. And I was convinced
that investing in companies before they went private was really where everyone made money.
And that's true. That's pretty much how it works. So I didn't want to lose all my money. So I started
investing in later stage secondary deals. So these companies before they went public like Uber,
Airbnb or Robinhood or wish.com. And by the way, they don't all go great. But you won't get a zero.
You know what I mean? You can, of course, you know, BlockFi, FTX. I mean, things do go, we work,
maybe now they file for bankruptcy. Things do go to badness. But you don't keep your money tied
up for too long. And you're lucky to maybe get two to 10X your money. Right. And if you put
$10,000 into DraftKings, for example, DraftKings was one of my exits. And then 16 months later,
you get to 4X out of it, right? You put in 10 grand, you get back 40. I'll do that all day.
So and I also wasn't like really investing in dangerous early stage things. You know, it was
good building up that. And then through that process, because you can tell clearly that I'm,
you know, a Columbia MBA, you know, I mean, that just oozes out. Becoming up step.
Are you?
Yes, of course. No, I'm just kidding.
Okay, I was like, damn, I can never tell if you're entirely kidding. I mean, it's a good thing.
You know, you keep me on the edge of my seat here. But you had me going with that for a little while.
Are you kidding me? Come on, look at me. I don't know what college would take me.
But I never judge a book by its cover.
Well, that's how you're going to judge a book then, damn it.
By reading the damn thing.
That takes forever, man. I want to see a good cover on a book.
Maybe I'll just watch the movie version.
So yeah, so then I started just really becoming obsessed with learning about angel investing,
because oh my God, we'll look at what there is to learn. And that never, and that never stops.
So becoming obsessed with that. And I met somebody actually coincidentally at one of Tone's events.
It was a financial summit. And I was showing him what I was doing and some of my exits.
And he said, if you really want to do this, you got to do the early stage stuff.
You know, this is great, but you really have to do it. And it was like, well, I don't want to lose all my money.
And it's like, well, continue with the education and invest small amounts of money.
And he really dialed me up, got me into deal flow, we call it, right?
From some of the best people that I respect a ton. And when they're sending you deals,
right, just like how we send deals and lightning ventures, you know that some work has went into it,
right? There's a due diligence process. There's a process that we're going through.
We're looking at things that we specialize at. We don't have a deal for clothes that block
waves in your house or drugs that make your dog live longer. I wouldn't feel comfortable
sending Walker a deal for a new hip replacement therapy, okay? Because that's not really what I know.
So anyway, so I started investing small checks into these companies, everything, everything you
can imagine, flying cars and robotic groceries and all of these kinds of things, small checks,
reading the updates from the founders, learning as much as I could through that process and
continually learning. And occasionally there were some Bitcoin deals. I was a Bitcoin long
before this point, but there wasn't like a ton, right? So maybe fold. I got the deal for fold
sent to me. Or, you know, I, Kraken doesn't count, right? But I picked up some Kraken shares on a
secondary earlier. Or, you know, there, there weren't that many put that where swan Bitcoin,
for example, you know, there were a few, but there wasn't a ton and invested psychotically into way
too many of these things. And then some good friends of mine basically motivated me and said,
hey, why don't you start your own shop, right? And I'm really passionate about providing these
investments to people, right? To getting the light bulb going off on this is an asset class and how
much money you can make when it goes right with angel investing and early stage tech investing
as a whole. And how that can compares to Bitcoin and can complement your portfolio. And even,
even without just investing in Bitcoin startups, which is all that I think about and deal with,
investing period in a lot of these companies, you know, where else do you get, you know,
100 to a 4000 X return that's not a useless token or some type of thing like that, right? Like,
these are real equities and real deals. And, and making sure that there's some education,
keeping the minimums low and getting people started, right? So that's the syndicate part of
lightning ventures. And we raised a very small friends and family fund that is now almost deployed
that's no fees, no carry, right? I'm running it for free. And that was a great pilot fund to kind
of get started on that side of things, as well as building out the syndicate, which I love.
And that's pretty much where we're at now is is on a deal by deal basis, you can invest in startups
for as little as $1000. You can be impactful, you can read the updates from the founders,
you could maybe find sponsors, right? Like, I can't wait somebody today. I don't want to say the
name. Somebody today was like, Hey, we want, you know, we're trying to like go live. And it's like,
Hey, well, how about some sponsorships on podcasts that maybe aren't owned, right? Maybe it's like,
not maybe it's like, not the swan Bitcoin crew, or it's not, you know, the unchanged crew. But
maybe there's like, we call it moneyball, right? If you ever saw the Brad Pitt movie,
it's a baseball movie where you're trying to spend the perfect amount of money on like the
best player that's like underrated, right? So if you wanted to spend some money in the podcast
space, maybe you would, you would throw a little money at something like this, right? Which I'm
sure you could use it. So that's why it's great having awesome people in the syndicate is because
when we send out an email being like, does can anyone help with that? And maybe someone had
invested in that deal, they can say, yeah, I know someone or yell, hop on the phone with them,
you know, and that's really what it's all about. It's not just about cutting a check and saying
adios, it's about being as proactive as you can be with what resources you have and what's available.
So I really try to do that. That's what we're all about as much as we can in our capacity.
Man, that was a righteous intro. I loved it. And yeah, hey, I'm always open to sponsorships for
another fucking Bitcoin podcast. So I think for a lot of people, the world of VC funding like
is completely opaque. Like maybe, you know, until I started talking with you, I've really had no idea.
I still kind of have no idea, but I'm starting to. But I think for a lot of people, it's just like
this other area. And when you hear VC's, you think of the, you know, the Silicon Valley vest
wearing, you know, tight European soccer player haircut type people. And, and it just seems like
it's this big money pumping scheme into this, you know, and I'm speaking Silicon Valley style,
not let's say Bitcoin startups, but pumping a lot of money into vaporware, driving up the price in
various rounds and taking a sweet exit and then kind of, you know, what comes of it? Obviously,
there are some that are incredibly useful and also genuinely profitable companies,
but there's a lot of junk out there, right? And a lot of that is driven by the fact that
there has been so much money just soaking in the system for so long that people are like, okay,
I need more and more speculative investments to just try and stay above of the rampant inflation
that we have. And I want to get into that a little bit into the kind of the, the differences between
what you guys are doing and what, you know, funds like ego death are doing versus the kind of
traditional VC route. But first, I kind of want to set a baseline. So maybe if you can just walk
through a little bit, what is your investment thesis at Lightning Ventures? What are you guys
looking for in companies? What are you out there scouting for? And, you know, what, what excites
you guys as investors? Okay, well, first, I mean, man, I'd love to talk about, you know,
traditional VC versus Bitcoin VC and, you know, the, the, let's start there with stigma, the stigma
that VCs have. Start with it. There's no rules here, Muzz. No rules. No rules. You know, just
like everything though, they get a bad name, right? Just like lawyers get a bad name and
insurance people get a bad name. That's very good insurance people out there, right? That are like
really cool to deal with. There's used car salesmen who are actually lovely people and great fathers
and they don't are pushy. But as a whole, you kind of had that reputation as, you know, Jimmy
Song likes to say rent seeking, you know, they don't add any value. They're just useless. And
there is that there are funds that perform terribly. And a lot of times they don't get to
perform again because there's a scorecard at the end of it that we all kind of have to live by.
And a lot of these Bitcoin funds that maybe started deploying around the same time,
we're all going to have to look back when the dust settles on how we did. And what we did,
because we're in an industry where not everything is safe with an underlying asset that's secured
like real estate, right? If you and I bought a four unit apartment complex, like we have the
land, we have the building, I mean, you and I can screw up all sorts of things, but there's like
something there, it's not going to go to zero. You know, and in the startup world, it's a whole
different story where many things do. And the ones that don't are so big of outsized returns
that it makes up for it. And, you know, VCs are in need, you know, they're necessary,
especially good ones, you know, even good angel investors, somebody that can be there for you,
whether it's an emotional support animal that's just there to listen or for, you know, vision
shaping or, you know, talking strategy or intros or, you know, whatever the lowest hanging fruit
is, whatever the biggest problem that you're trying to solve, they are your team, they are on your
side, they are not meant to give you friction and resistance and make you have all sorts of
governance and control. They are there to literally support you. So I think the biggest mistake that
founders make is they don't utilize their VCs and their cap table, right? If you have 10 people who've
invested in your company and maybe there's two VCs and a couple of angels and Aunt Betty and
whatever you have on there, you know, and you're looking to raise your margins, okay,
reaching out to them and talking about how maybe a better deal on your credit card processing or
warehouse fulfillment or, you know, a better node management tool or whatever you're doing, right?
There's just a lot of ways to leverage them and the founders that do leverage them, I think that
they do the best. So we're not evil people, especially at our level, right? I mean, we're not
taking board seats and we're not, we're not at that level. And later on, it's a whole other story.
So we're not all bad, I promise you. And the people who are really good, man, they make a lot of
money. And, you know, having investing $100,000 into someone's venture fund and over the next
10 years being paid $3 million is pretty cool, you know, that these that they're able to do that on
a consistent basis, right? Or have vintage years that obviously do better, right? 2013 was a great
year. You have you have these waves of the door dashes and coin base and all these kind of things
that come out of the Instacarts or whatever from that very early stage. And then you have periods
where there wasn't a lot like right now, it's kind of a kind of another year. And maybe if you invested
towards the top, that fund won't do quite as well as some of the funds that are about to be
investing now. So, you know, we're not all bad. Well, well, I like that. And I appreciate the
context there because I think it is it is often lost on many that all, you know, companies need
money, they need capital to be able to function. If you are a capitalist, as I believe anyone who has
gone down the Bitcoin rabbit hole likely is, then you should be encouraging the effective
deployment of that capital. Now, one could make the argument that maybe, you know, VCs don't always
deploy that capital correctly, but it's their fucking money, right? Well, or their money and
others money, but you need capital to be able to scale businesses. And this is why I really wanted
to talk to you because I think at this time right now, it's such an important thing to have VCs that
are specifically focused on helping Bitcoin businesses scale. Because there's a lot of
there's a lot of malinvestment out there in the world. This is not something new. This is, you
know, it will probably always be the case. But Bitcoin businesses and ones that are actually
trying to build on top of Bitcoin, build on top of lightning. These are ones that actually have a
chance at being not just good investments for the investors, but good companies that do well by their
customers and hopefully make a really positive impact on the world. Like these are companies
that help drive Bitcoin adoption. And so I think it's so important to highlight those companies
to have investors who are focused and saying, we're just going to look at companies that are
Bitcoin only, we're not going to look at any of this crypto shit, we don't care if you're building
a blockchain with a new token, like it's Bitcoin or it's nothing. And so that's probably a good
kind of transition into what do you guys look for in your in companies that you end up, you know,
rolling forward with? What's your thesis? How do you make those decisions? Where are the lines in
the sand for you guys? Well, first off, because you know, I'm impossible to work with and I'll
go through partners like, you know, nobody's business. I am kind of able to make those decisions
myself. And I hope that one day, like my report card, it'll be able to say does work well with
others. So some people in their thesis, they're very specific, like for example, ego death does no
mining. Okay, so that's just not for them. All right, firms like 1031 have done much, much mining.
Okay. So some really focus on infrastructure, maybe one doesn't do games, you know, just no
matter what, it could be the greatest game that there's out there and has something to do with
Bitcoin, but we don't want anything to do with it, right? I don't have a lot of those rules. It's
all things Bitcoin. But some rules are no stacks projects. Okay. That's a rule. And, you know, nothing
that nothing shit coinery, right? So like even something like, for example, like out of, let's
just say that there was an exchange in another part of the world and they were selling other things.
That at this point in time is not something that we would risk a reputational risk from rolling out
in lightning ventures, right? And that kills a lot of things, you know? So, you know, there's no
movies. Okay. No movies. That is one hard no. Is anyone who is looking to raise funds for their
movie, that is not something that we can do. Go to Geyser, maybe other people invest in movies or
plays or things like that. So that's a no. And then there's something called an uncapped note,
which is a certain type of financing terms. And that is a hard no. Anyone who is raising on an
uncapped note is something that I wouldn't be interested in. But that leaves pretty much everything
else, right? You that's something like Thunder games or even something like crowd health, right?
Which was a was a healthcare company with a large Bitcoin component, you know, something like iBECs
with infrastructure or strike or, you know, Amber in Australia or coin corner in the UK.
Those type of companies Osmo down in five Central America companies, those those type of companies
were are all in play, right? Something like relay, which didn't have lightning when we first
invested, right? Everyone thinks like, Oh, you just invest in lightning stuff. I get that a lot.
Could it be the name? I'm just wondering. We didn't think about it. We didn't think about it early on.
But something like relay didn't didn't have lightning and now has added it, right? Same
thing with Amber in Australia, they're going to be adding it, right? Swan is testing it right now.
You know, so lightning is kind of where everything's everything's going. That's certainly a focus,
but that's not like a deal breaker, you know? So as far as the stage goes, personally, I like to
invest after there is some sort of traction, some sort of measurable traction, right? Even if it's
just a few weeks or a couple of months, just something. The investments that we've made in the
very early pre product stages, pre revenue stages, those are the hardest ones. They're probably the
ones right now that are having the toughest time. They still had very successful rounds. There's a
lot of very more prominent big name VCs that invested a heck of a lot more money than we did.
In those deals, it's not it's you. I wouldn't say that we we miss saw it. But they're having the
hardest time, you know, launching and then the products where they have a live product and the
KPIs are going up. I mean, if you had 40 customers a week ago and you have 65 this week, you might
not think that's great. But once you start putting that on a chart, it starts looking incredible.
And those are the type of things, right? Getting somewhere with little as little funding as possible,
actually executing is very important. Question for you. How long has it been since you tried a
new hardware wallet? Or maybe you've never had one and want to try one for the first time or need
to get some Christmas presents for friends and family? Either way, head to bitbox.swiss
slash Walker and use promo code Walker for 5% off the Bitcoin only bitbox to hardware wallet.
It is super easy to use. It's Bitcoin only and it's fully open source. So you can check out the
firmware, check out the app, even x-rays of the hardware and other schematics if you are so inclined.
Just go to their GitHub and verify it for yourself. You don't have to trust me. Hell,
go ahead and build one for yourself if you feel like it. Or do what I did. Go to bitbox.swiss
slash Walker and use promo code Walker for 5% off. The choice is yours. Yeah, actually getting
something done. That's a it's always a good place to start. You know, you, you mentioned just in terms
of lightning, lightning companies and listed off a few that are currently implementing lightning or
have implemented. We also have seen lately a well maybe not just lately, but consistently,
a lot of lightning fud, let's say, and maybe, maybe it's not fud, some would argue, maybe it's the
reality of the limitations of lightning. What are your, what are your thoughts on that? Just in terms
of a lot of people go back and forth between, okay, yeah, lightning works, but only when you're
running it in a more custodial sense, and you have, you know, big nodes with, you know, massive
channel capacity, and it's really only going to be something that is working well in a custodial
sense. And otherwise, it's just, you know, it's just like larping. Like what's your, what's your
take on that being in the chair that you're in seeing these companies who are actively building
on this right now? I mean, lightning is working fine for me. How's it working for you? It's working
fine for me. So I really don't know what everyone's up in a tizzy about. Honestly, like, there's only
so much time in the day, right? And what I can focus on is really not that, you know, I just,
I just don't really see any issues, maybe some regulation, right? I mean, Wallace, Satoshi leaving.
Yeah. But I haven't had a payment fail. And I don't even remember the last time.
And there's just, I just, I can't see, I can't see any of these negative arguments, you know,
people want to talk about, you know, non custodial, you know, is the key and is the way and, you
know, I was at a conference one time and this lady, right, we were like in Asia, okay, we're
like getting ready to download her first wallet. And it was like, Wallace Satoshi real quick,
back it up. Here's the two words, boom, I sent her $5. And this guy next to me, like after she
left, from what I thought was a pleasant interaction, this guy is like reading me the riot
act of like, you should have got her on Phoenix. What is wrong with you? We are bad practices.
And it's like, dude, she's like 50. All right, I'm going to like terrify her right now. It's like,
you're going to say these words, don't take a picture of it with my no, no, don't do that. What
if I lose the words, you say it's non custodial, but non custodial means I actually, yes, yes,
yes, just trust me, just like, how are we going to possibly go through that? You know,
well, it's something I, I definitely agree with, because especially when it comes to, let's say,
in person interactions that you have a limited amount of time to show somebody a little bit
of the magic of Bitcoin, are you, when you have two to five minutes, are you really going to go
through all of the aspects of self custody, right? And explain hardware wallets and explain
best practices for storing that seed phrase and explain that, you know, listen, by the way,
I want to send you a test transaction. You'll see it can, you'll know, you'll know that it's real
once there's been six block confirmations. Why six? Well, because that's when we know the amount of,
it was just, just take my word for it. It's six. But most of the time, when you want to show somebody
the magic of Bitcoin, and you only have a few minutes, you're going to show them lightning.
And the easiest way to do that right now is with custodial solutions. Phoenix wallet's doing some
great stuff, right? But it's still easier to show somebody on a custodial solution right now. Now,
it's also the fact that you can still during that conversation say, by the way, what I'm showing you
right now is what we call a custodial wallet. You don't really need to worry about what that means.
But what it means for you is that if you're going to start learning more about Bitcoin and start
saving more of your money in Bitcoin, once you reach a certain amount that you feel like is a
good amount of money, you should move that into a self custody solution. And you can look that up.
And by the way, here's my telegram. Here's my WhatsApp. Here's my signal. Hit me up. And I'm
happy to answer any questions or go on BTC sessions YouTube and literally all of your questions will
be answered. Those quick interactions can be really, really positive for people if they just see that
it works and it works right away. And the most reliable way to do that with lightning is in a
custodial way, especially when you only have two to five minutes. So I agree that self custody is
incredibly important. That's how you can actually achieve a degree of sovereignty, which and sovereignty
is a big spectrum, right? But we also have to be practical about showing people things that are
going to have some wow factor right away, and then encouraging them to do more research, right?
Because you can't teach somebody everything that you've learned through thousands of hours of
studying Bitcoin in a two minute conversation. It's just not going to happen. And you'll drive
yourself crazy. But that's a fair, a fair answer to my initial question about the lightning FUD.
So let's, let's, let's switch gears a little bit because perhaps we have some entrepreneurs out
there who want to build on Bitcoin. Maybe they're already working on something. Maybe they're working
by themselves right now. And you know what, they would love to bring on some more people.
They would love to turn this into a business, you know, turn this passion project into a business.
What advice do you have for early stage entrepreneurs? Maybe they just have an idea. Maybe
they have some code written, maybe they've got a product that's, you know, on almost ready to go.
What advice do you have for them as far as when should they start looking and, you know, talking
to VCs? Maybe also what questions should they expect from VCs and what questions should they
themselves ask to those VCs to make sure they've got a good partner in this journey?
Man, that's, that's a whole lot of questions there. I know. I like to load them up though,
because I know that you flow with it. Well, so I have a presentation called Founders in Funding
where we chat about some of those things. It's a great presentation. No, you saw the other one.
You didn't see this one. Oh, well, damn it. Now I feel left out. But yeah, so what do you do? Right?
The first thing is you're working on your project. Okay. And you're maybe finding somebody to help
you. All right. And that's what cannot be copied. Okay. Your passion, okay. And executing. You do
not need to patent. That is for you. Okay. The ideas are cheap. The idea is nothing. Nobody is
going to steal your idea, right? In nearly every case. All right. You have to build it. And I think
when you get to a point where you need a certain amount of money to get to a next level, to do
something, whatever that is, maybe it's hire your first engineer, maybe it's a liquidity thing,
maybe it's a user acquisition campaign, some advertising, whatever you're doing,
you need that money. That is when you should really start preparing to raise it in a serious
manner. Best practices, yeah, have a data room, incorporate properly, create an options pool
for the future. A Delaware C is the weapon of choice. That's don't reinvent the wheel and think
my neighbor's attorney says a Wyoming LLC is going to be like, don't, it's a Delaware C and
doing it properly. Having those docs in a drive, having your wire instructions. Why do I need to
put my wire instructions in a drive after you've opened a bank account? You will need them. And
you look really smart when you can send that one link to a VC and it has everything in there. Maybe
it has a short executive summary. Maybe it has whatever you're working on with a pitch deck
that's in there or some bios of people that are on the team, maybe a very small cap table,
even though no one's on it yet. Maybe you have something in there. Have all these things and
be incorporated properly before you reach out to any VC. And you can start that process from the
beginning, but why would you ever detract from building to do these other things? If you have
the capacity for it, if it is, but certainly do those things before you reach out to any VCs
about getting funding. And then maybe you get to a point where you have an MVP, you have something
and you want to raise $400,000. And then at that point, you really need to think about what that
$400,000 is going to do. Is that going to get you your first 3000 downloads? Is it going to
get you your first 500 customers? Is what will it do? And how will you spend it? And really try to
get into some kind of forecast. See what happened before coming out of a hot market is you could
just raise to extend the runway. Oh, well, we'll just kick out another safe note and raise another
two or three million. And yeah, that'll extend at 18 months or however many months. And then
eventually when the money is not there, you have to like build a real business. So it's cool now
because all of these entrepreneurs are coming into this world. You can only build a real business.
You know, maybe in crypto land, you can still build a fake business. I don't know. Maybe there's
still fake things getting fun. I'm not an expert over there in that world. But in Bitcoin land,
you have to be a real business. So, you know, I mean, there's so many tips here. You know, don't
send a 50 page deck. Don't send a generic email that's like, you know, three pages of a block of
text. You know what I mean? Just like a short one paragraph. What do you do and why should they
care? I mean, that's ultimately what matters. If you can get across what we're doing and why you
should care, you'll probably get a good response. The double opt-ins. If you know somebody who
knows that person, you know, having them do an intro, it works wonders. You know, you're so much
more likely. And then the double intro from two people that know that person, both saying, hey,
have you checked out so-and-so and his project? It's a great thing to do, right? A lot of people,
they go online, they buy a list of like 10,000 people and it's like, dear investor comma. My
name is Walker and this is my podcast. I'm not looking for investment in this bad boy,
but I'll keep that in mind if I do. We're not going to run the Bitcoin. We're not going to have an
allocation for this next week. Well, I mean, I know you don't do movies. Do you do podcasts? Is
that an investable entity? I suppose anything is, but I think Joe Rogans was acquired for like a whole
lot of money. Yeah. I don't think I'm just like a couple orders of magnitude below that. Actually,
many orders of magnitude. But I appreciate the comparison nonetheless. You're grinding out.
You're grinding it out. I don't know too much here.
Yeah. Maybe one day, but no, podcasts are not really investable for what we're doing. But there
are a lot of good investments that are not necessarily suited for venture. And that's
important to know. It's important to know that let's just say, and I don't want to get any
shift for it, but let's just say that metal seed plates, things that are like super necessary
that we all love is Bitcoiners. These indestructible, that Jameson Loppa blog post where he blows it up
with nitrogen or something. He's like, B minus. I lost one word or whatever it was.
Those type of things are great. They're necessary tools. They're not like venture
investments. They're not the type of things that we'd invest in. It's like a hardware,
pretty niche thing. So there are things that need to exist and are probably still great
investments. That founder, those teams that are making any seed plates, they could probably run
a very profitable business and pay dividends and have a set of investors with different
expectations who are focused on different things and still raise money. It's not that it's not
investable. It's just you're in a field, in venture where you're trying to return the fund.
That's what they call it, return the fund, which is when just one investment in your portfolio
returns the entire investment. So if you make $100,000 investment into a company and your fund
size is 10 million, a lot of people's thesis is, will it be to only invest in things that could
potentially return that entire $10 million, at least once over? And that might not be obscure
node management software. That doesn't mean that it's a waste of time and you shouldn't do this
or whatever. And if anything, it might be able to help that team think about, how do we make this
more commercial? How do we make this make more money? How do we change it a bit? So there's
just a lot of great things to invest in, but they might not all be one size fits all.
No, I think that's pretty good advice. You got to know yourself and know what
kind of lane you're actually going to be operating in. I'm curious if you see just in
terms of general trends. So if we're talking about fiat price of Bitcoin, things are heating up.
We got a halving around the corner. I know you guys are likely not, you're not basing your
investments on, oh, is this going to blow up during the halving? And then we'll forget about it
afterwards. It's you're thinking more long term. But I'm curious, in terms of, let's say, more
generalist VCs, if that's the correct term, do you see more of them, more appetite from those
traditional or generalist VCs, moving in and trying to get some allocations to Bitcoin only
companies? Are you seeing that landscape shifting at all or what's it look like for you?
Definitely a lot of renewed excitement. Granted, some of that, maybe pretty decent amount of that
is really due to ordinals and these other types of things, right? Love them or hate them. And
there's so many, right? There's RGB and ordinals and stacks, right? And I know which ones I hate,
but I'm just mean as a whole, as a whole, it drives and brings a narrative back to Bitcoin.
And that's the number one thing that I'm getting from crypto VCs, right, is along the lines of,
we weren't looking at Bitcoin and now the narrative has changed. Now we're paying close attention to
BRC 20 tokens and these type of things. And that's bringing them in. And the only hope is that they
come in and realize like there's so much more. There's so much more than locking up your NFTs,
locking up your ordinals and borrowing against it. I can tell you right now that is something that
like I have 0% interest in and want nothing to do with. And it may even be a good investment. I
don't know. They clothe like these type of things are closing over subscribed venture rounds of not
the Bitcoin VCs that we all know and love, but another group of people, right, or the tap root
wizards. What was their tagline? Is it something like we're going to make Bitcoin something again?
I believe it was fun again. Make Bitcoin fun again. I mean, I didn't get that pitch deck and I don't
think they would dare ever approach lightning ventures. So I didn't know. I just read the press
release, but like, you know, who knows who knows what's going to happen. And the crypto VCs are
certainly more focused on Bitcoin. I even get the we were solely focused on Bitcoin and now we're
looking to really solely be focused on Bitcoin. So there's a big shift in that and the traditional
VCs, the FinTech VCs, they're all kind of coming around. But it's still not like a main focus.
You know, you see their name on some deals, they're starting to participate, they're starting to talk
to companies more, but we have a long way to go because you can pretty much name the Bitcoin VCs
on maybe two hands at the most. Now, that's that's interesting. And I know I'm curious then, given
that perspective that there is less attention being paid to Bitcoin focused Bitcoin only startups
than is due to it. I mean, much like Bitcoin itself, right? Still the vast majority of people,
even if they've heard of Bitcoin, don't think about it nearly as often as folks like we do,
right? And probably don't own any, you know, not high 90s percent of the world has no exposure to
Bitcoin. So we're still early. And it sounds like we're still very early in terms of the Bitcoin
VC space. And I'm curious, you know, with that, do you think that a lot of these Bitcoin companies
are, are they undervalued or are they are they just fairly valued because maybe Bitcoin VCs
take the concept of money and funding a little more seriously than the traditional ones? What's
your take on just valuations that you're seeing in general? What's the appetite for the rounds that
you guys are participating in? And has that been shifting over, you know, the last six months?
Well, I think it's actually quite the opposite. I think that traditional VCs definitely more
fairly value negotiate and are much shrewder with investing than the Bitcoin VCs and in Bitcoin
land in general. And like, I don't want to, you know, I don't want to get in trouble or say the
wrong thing. But, you know, like, if you are, if you looked at, think about this, all right, if
I've invested in over 2000 deals, think about how many deals I didn't invest in. Think about how many
that I saw. Okay. And when you see a company that has 800K in ARR, and it's up 5x from last year,
and they're raising at, you know, a 16 million post money valuation, and they have like quality
co investors. Okay. And it's like a wallet in Africa that does a payment or something, whatever,
whatever it is. Okay. And then you come to Bitcoin land and it's like, doodadoo, like, yeah, we've
got 1800 in revenue, but it's sats, man. And we're thinking 21 post million valuation, no discount,
like we like the number 21, man. All right. And it's just like, well, hold on a second here.
Take a knee and like, I'm like old man yells at startup valuation, you know, that's me and that's
fine. But there are some others, right, that also we talk as Bitcoin VCs and we're like,
yo, that guy is high, you know, or whatever. No, I'm just kidding. But, but yeah, in Bitcoin land,
in Bitcoin land, it's, it's a little different than traditional venture. Like if they actually went
to a real VC and they told them what they were trying to do, I think the VC would just politely
say, you know, we can't really justify this at that valuation pretty much most of the time.
And in the Bitcoin land, there's a lot of real companies. There's a lot of profitable companies.
I mean, a lot of our companies are having record months. Now, when the price is terrible,
and I can't wait to see what's going to happen in a bull market. Okay. Every on ramp off ramp
exchanges, the, the, the sat's back type of companies, you know, the Bitcoin company,
the gift card companies, everything that you can imagine, many of them are having absolute record
quarters, record months, we're getting the updates, they batten down the hatches through
SVB and FTX and Celsius and everything that just happened, batten down the hatches,
made it through this time. And on the other side, my Lord, you know, I can't wait to see what's
going to happen. Well, it's interesting too, because, you know, maybe some of these companies,
especially ones that have Bitcoin treasuries, are more fairly valued than one might think,
even if we're saying, okay, a lot, you know, maybe there's a lot of exuberance in general
about these companies, right? And like, Bitcoiners love seeing other Bitcoiners building stuff and
maybe get overly exuberant and, you know, the Bitcoiners themselves are like, you know, we're
worth this much. But for companies that have Bitcoin treasuries, which I think is a lot,
I mean, is it fair to say if it's most of the companies you guys are investing in, or is it,
what's kind of the percentage there? I'm curious, but I mean, they're going to see a massive
appreciation in the value of their cash on hand when Bitcoin starts doing its thing in fiat terms.
So I love that. It's one of my favorite concepts to like, you know, smoke a joint and think about
in my private life. But you know, but if you if you if your revenue is in SATs, right, and you're
looking back in the past four or five, six months, okay, in your Excel spreadsheet, okay, your US dollar
revenue in SATs for those months is literally you're rewriting the past. You're literally with every
10% move higher or whatever. It's just it's unbelievable. It's unbelievable to think about,
right? And then you have two ends of the spectrum. You have the end that conservative, you know, you
cannot keep 100% of your treasury in Bitcoin. Okay. And you have that mindset of like, at least a
small amount, I believe every company that we've invested in that has a Bitcoin treasury. I mean,
I want to say I know it, I know it, but I don't know it, but I'm pretty sure of it. I can't think
of one that doesn't. Okay. And they have revenue in Bitcoin and they keep Bitcoin and they distribute
Bitcoin. All right. So certainly it's going to be great when the price moves higher. Okay. But
they're responsible. And you kind of have to be because look what we just went through. Okay.
If you yoloed 100% as a startup of your corporate treasury in Bitcoin at 65,000 and just rode that
the whole way, you're probably not in business now really. Sorry. I mean, you have to pay bills.
There are things that you have to do, you know, you're living on a Bitcoin standard. Well, like
that works, but you know, your Bitcoin standard in fiat terms of measurement can kill you, right?
And then there's the other side of that spectrum, right? Scarcity. I love Scarcity. They're such a
fun company. They don't take themselves seriously. They have satscraft.com, which would be a great
sponsor for you by the way. Satscraft.com and the Pepe Flyers and all this fun stuff. They are 100%
Bitcoin treasury. 100%, 100% of their income is in Bitcoin, 100% of their treasury is in Bitcoin.
And like you can tell, like they feel it. Like we're sitting around 17,000 Bitcoin price. Like
they're not spending. You know what I mean? They're batting down the hat. You know, they're just
like surviving. And then all of a sudden we have that move now, you know, and we're pushing 38,000
or whatever. And it just, it looks so good on their balance sheet. But that's a yolo mindset,
right? You have to be a yolo mindset. If you're yoloing your life savings into an
operaturn on some of the things that they sell in their Sotheby's like auctions.
But yeah, I mean, and everything in between, right? And everything in between. But to your
answer, yes, I believe everyone has a Bitcoin treasury and moving forward their previous
month's income as well as their current balance sheet and runways just going to extend with every
move higher. And that's just kind of a, it's a beautiful thing, right? Like, and it's also,
I feel probably a good incentive for businesses to obviously you need to think about how am I,
you know, paying the bills in the immediate future that need to be paid in fiat. But you're also
thinking in a more low time preference way as Bitcoiners are wants to do to think longer term
ahead and think, okay, how, you know, what's this going to look like for us in the next one to
five years, 10 years? Like, I think it's a good mentality shift to have that treasury and clearly,
you know, when we're seeing it now, and I'm sure leading up to and following the next having,
it's going to look really brilliant that all of these companies have Bitcoin treasuries.
They're going to be again, like the idea of, you know, going back and rewriting the history
of your cash flow at these times and saying like, oh, wow, like, look at this, if you're
denominating in fiat, we have a lot more on hand than we did, you know, six months ago.
It's a, it's a powerful thing, I think. I'm, you know, I'm curious because I think one of the
critiques that you see from maybe folks more so in crypto land is that, you know, Bitcoin is boring.
Nobody's building on Bitcoin. Bitcoin's not exciting. Bitcoin's not fun. That's why I'm in
crypto because crypto, that's where the builders are. And that's where the fun is. Do you have a,
like, do you have a message to those folks? Because you actually see the building that's
happening on this. You see it in real time and you help boost it. So like, what is your message to
the crypto folks who look over at Bitcoin and say, hmm, it's just not fun. It's boring. It's not,
there's no, nothing happening. You know, you know, when you watch like mainstream news and
literally they say the exact opposite of what's happening, they're like, meets bad for you.
You know, Bitcoin's a terrible savings, you know, or whatever they say is just like the opposite.
It's amazing to me that people really say that like nothing's happening on Bitcoin and that all
of this innovation and all of this real work is happening outside of Bitcoin. Because even if you
look at these other projects, nothing is going on. Like, like actually nothing is happening on these
other projects. Like I've never, I don't even know like who's, I've never met one Bitcoin cash startup.
Let's just say that I have no idea. Like nobody's ever been like, I'm a, I'm a, I'm a, just a strictly
a Solana VC. I'm looking at startups that are building on this. Like I don't even know who these
companies are, you know, or if they are real companies or there are real, there's nothing there.
And then you look at the actual transactions and the volume and like what's going on there.
It's absolutely meaningless. You know, it's absolutely meaningless. And they push this
narrative that nothing's going on in Bitcoin. Everything's going on in Bitcoin. Everything
that's going on in your shit coin will come to Bitcoin. If it didn't start on Bitcoin, right,
but Bitcoin is just too busy to like, you know, be like the answer to the world's problems to like,
you know, deal with the slick NFT wallet, but like it'll come like it'll be here just takes time,
you know. And there's, you know, we say like no one's using Bitcoin, right? No one is using Bitcoin.
I mean, in reality, like in the big scheme of things of like how many people like no one's using
Bitcoin, really no one is using, oh, it's the internet computer protocol. Like the guy was in
the blockchain lab. He helped invent Watson. They always come like they send you this email.
And it's like this guy helped work on Watson. Like that's what they all say. I don't know.
And yeah, and like there's it's all nonsense. It's all air. And you know, speaking in simple
heuristics, right? You tell children don't take candy from strangers. There might be a lot of
great strangers with a lot of fine candy. All right. It might taste great. It might be very
safe, but you tell children that, right? So when you're investing, whether it's in crypto, quote,
unquote, or any of these startups like just have Bitcoin, like that's the heuristic, you know, you
might miss out on a little bit of candy, but you won't die. You won't end up in a crypto van
somewhere. Oh man, I mean, I think that that's it's very fair because it's so often that that critique
is just cope anyway. Right? It's like, well, sure, we might be running essentially a Ponzi scheme over
here with, you know, but token, but at least we're having fun, right? Look at it. Look at all the fun
we're having. And it's like, I don't know. I've met a lot of Bitcoiners now and Bitcoiners that
are starting companies. And I got to say, it's a lot of fun to be around that and to be around people
that are actually building things that aren't just vaporware, like to see people building things that
actually have a mission where they say, I want to, yeah, I want to make money. Obviously, that's
why I'm doing this. But in order to make money, I want to have made the world a little bit of
a better place. Like I want to actually create value and have that be why I am accruing capital
for that value creation as I should. Because when you put value out there, that like, that's the
point like making money is a good thing. Like that is that is great. And when you're doing that in
an ethical way by providing real products and services that actually make people's lives better.
And don't just promise them, you know, like some fucking hexakin Richard Hart scam of like,
well, you know, you're going to make, you know, 3000% and it's risk free and it's so much better
than Bitcoin. And it's like, what are you building? Like, you're, yeah, you might have built a really
clever scheme. But it's just that. And, you know, at least Bitcoin founders, Bitcoin VCs can hopefully
sleep relatively soundly in the knowledge that at least they're bringing some products and services
to the world that are actually going to do a little bit of good and not just rug a bunch of people,
but enrich a couple. So, hey, I don't know. So every company that we've invested in and every
Bitcoin company that we look at, like they are real companies. Okay. And that's what I think a lot
of people don't understand yet about the Bitcoin funding ecosystem is we're still like grouped in
with this whole crypto world, right? Where people aren't really separating that these are actual
companies. These are actual real companies. Okay. And they just, they lump it in with that we're
crypto and I do calls with crypto VCs. And to be honest with you, I mean, the joke's on me because
these people have a ton of money. I mean, I talked to a kid the other day. I mean, he must have been
23 years old. He's got like a hundred million dollars in asset under management. I looked at
his portfolio. I couldn't tell you one of these things. I don't even know what they are. And I
don't know how he's performing or what he's doing, but he basically wants the best Bitcoin deals.
He reached out to me because he wants to invest in the best Bitcoin startups. And I was flattered
because he has money and I don't know, just kidding. So yeah, like, let's get on a call. Let's find
out about what you're doing. And he couldn't get over the fact that no deal that I have invested in
and no deal that I will ever send him will ever have a token. It doesn't register in his brain
that there's a way to invest in a company and have equity and like what venture investing is.
It's all about like, when's the token and when do I, when can I dump? And that is such a shitty
investor. Like the kind of investor you get from, like, I'm in it to win it with all these companies.
I am here the whole way. It's you, it's us versus the world. I am on your team. There is no like,
oh, I can dump my Ivex token in six months from now. And like, it doesn't work that way. Like,
we are building a company. And it's just a whole nother mindset in these worlds. And he basically
said there is not one deal that he's invested, that he can invest in that doesn't have some kind of
token liquidity component. That's like his like, I'm not allowed to invest like our fund is structured
to where I cannot invest in in a crypto project that has a token or whatever, like, it's not allowed.
Okay, his is the opposite. He can only invest in these type of things. And I mean, all these people
have so much money. I mean, the people who did well during all of this, God bless them, you know,
and we're sitting here, look at us. If if that story is not just indicative of the entire
crypto land ethos, I don't know what is that idea that, oh, I'm I can't invest in anything that
doesn't have a token that I can dump on retail. Like, because that's what it comes down to, right?
Yeah, they're not going to invest in anything that they cannot before the general public, you know,
or as the general public starts to get in because they pump it up with bots on Twitter,
and in their telegram channels and with their chili influencers, pump it up, pump it up. And
then just as soon as it starts taking off and, you know, go into the moon, all the initial big
bag holders dump it all and, you know, get some insane returns. Wow, great. Good for them. But like,
what a piece of shit. You know, I just I don't know. I guess it comes down to a question of like,
how much are your morals worth? And I'm sure people have a number for that. A lot of people
clearly have a number for that. But I just don't think he knows. I don't think he knows that that's
like not cool. I think he just thinks that that's the game. Like he doesn't know that shilling vapor
wear and dumping on retail is maybe, maybe not a great thing to do. Or you think his perspective
is like, well, as long as maybe looks at it very analytically, like if I'm making money in my fund,
that's my job. It doesn't matter how I make the money. It doesn't matter if it's ethical or not.
It's just whether I make a return. You think that's what it comes down to?
Well, I'm old enough to be his father. So I wanted to say, son, let me tell you something
about investing. Okay. No, but like, okay, so here's an example, right? The need for liquidity.
It's not just like if it's about the need for liquidity, here's what happens, right? We invest
in Walker Bitcoin. All right, Walker Bitcoin is a new startup. I know the founder. He's a great man.
He's expecting. Okay. We invest 100K. And let's say that Walker Bitcoin gets to a series B level.
Okay. And let's say that our, our investment is marked up 30X. Okay. So if we invested 100,000,
okay, and we're up 30X, now we're sitting on $3 million of equity. Okay. No token. Now at that
point in time, right? When you get later on in the company, a lot of the early investors, okay,
would like to distribute some capital, okay, to their investors, okay? But then also at that later
stage, you have a lot of new investors that want to come in, okay? That want to come in and just
start there because these investors that invest in later stage rounds, they specialize. That's
when they come in. They're not in the early preceding seed rounds. Okay. So that's what they look for.
So if we went and we sold 20% of our $3 million to a new investor, okay? And then we're able to
distribute 5X to all of those investors that were in that early round for a couple of years,
give them 5X their money. We still have 80% of our money. You get to approve that share transfer
and say, yes, I like these guys, okay? And you get to all hug and talk and all of that good stuff.
Okay. That's the proper way, all right? That would happen. And by the way, we're still in it for 80%
and love you and want to support the hell out of you. And that's how it goes, right? That's how
it would happen. But this in the YOLO generation, this is too much work. We can't do this. I want
to dump. Yeah. I mean, and it's such a fundamental difference too between going through rounds of
financing and offloading some of your early round shares to new institutional investors
that want exposure. And as you said, who specialize in that later stage financing versus
investors, we're going to buy up 60% of this new shitcoin supply. And as soon as it launches on
two exchanges, we're dumping 99% or 100% of it and we're moving on to the next one. And because
it's one is dumping on retail for dumping vaporware on retail and then watching that vaporware token
go to zero, one is financing an actual business and then taking some of those proceeds, returning to
your investors while still maintaining a position in that company. Because presumably you also think
this company's not stopping here. They've got a good revenue model, not just a revenue extraction
model or a money extraction model. Because that's what these shitcoins are, right? It's just
extraction. And the sad thing is that it's like so many of these crypto projects pitch themselves
as super cipherpunk, right? And they're so like, we want to give money back to the little guys and
not just to Wall Street, but it's like, you're just doing a hyper condensed hyper accelerated
version of the Wall Street rug pull on dumb money. That's exactly what you're doing. You're just doing
it much faster and with a little slicker marketing, maybe and more apes. I don't know. It just seems
seems just really shitty. So I'm glad that there are Bitcoin VCs out there, like yourself, like the
folks at Ego death that are actually looking for good companies that are trying to make a difference
and are providing capital to them because you need capital, right? I'm curious because I want to be
also conscious of your scarce time in this role. I know you are a busy man. You are helping these
companies. But is there anything you can say about anything that's like public, just about companies
that you're really excited about right now that you're like, man, I'm like, they're, they're kicking
ass right now. They're doing, you know, bringing in solid numbers. They're, they're growing their
user base. They're growing their revenue or maybe just one that's, that's still a little bit early,
but you're really stoked about because they've got a great idea. Can you, can you share any of that
any specific or not too specific, but specific enough? Yeah, why not? Worst that could happen is
you can't tell that by them. So I am so excited about every Bitcoin startup that has not died.
That is just incredible to have gotten through this and I've been through some bear markets. You've,
you've been through some too. Okay. After this is actually my first technically, I'm still
new here. I got this one brutal, bro. Yeah. After Mt. Docs, after Silk Road. I mean, that was a tough
one. That felt like that. I thought that was bad. That is nothing compared to this. Okay. And, and,
and then in 2017 after ICOs, nothing, this is, this has been tough. Everything from the blockfies
and the failures, SVB and just so much. It's just been brutal. If you survived this, you should get
a medal of honor. I mean, you have survived such a hard time, especially if you're in exchange.
If you're in exchange, the trust, the trust level for exchanges in their business is just,
couldn't be worse. Right. And I think nearly every exchange that we've invested in is having record
months. And in every, in every way, in a lot of republic about it, Relay is not very shy about it,
having month after month of records. Right. And, you know, we've only had a couple of,
a couple of companies that didn't make it. And if you look at how many are supposed to fail,
they haven't failed yet. They have survived through the hardest possible conditions
to be a Bitcoin company. And then you got chokepoint 2.0. And then you can't get a freaking bank
account. And then you can't even do normal things. Right. It's hard enough to just survive. You're
like getting debanked in your operating account goes missing for 22 days till you get a paper check
in the mail. Okay. And having to deal with those type of things. And yeah, there's a few that didn't
make it, you know, really one actually, you know, in reality, and I would, I would just love to just
talk a whole bunch of shit. Because he's not even, he's not even a Bitcoin or he's not even in the
space. But this guy, man, oh my God, I actually want to write something about it. Oh my God.
But anyway, no, seriously, every company is doing great. I mean, you want to pick them out. I mean,
every exchange, you know, Amber, you know, Australia, you know, Beaver Bitcoin in Canada,
Swan Bitcoin here, adding different products, Strike, you've seen their news lately.
You know, we have a couple of companies that are in Wolf, you know, it's top secret, right? The Wolf
Accelerator is going on for their third cohort right now. Two companies that Lightning Ventures
had already invested in prior to them getting accepted to Wolf makes me look like I know what
I'm doing, at least a little bit. So that's kind of nice. You know, and they're having record months,
they're having record months, you know, Slice, for example, I love Slice, 500,000 downloads, records,
shattering records, you know, I believe even companies that we're not invested in like Albee,
I think are having record months, you know, some companies, you know, it takes a little while to
find, to pivot, you know, Vita, Lyle Pratt, super accomplished team, like they've pivoted a couple
of times into different, different areas, you know, and they've built a ton of shit that works.
And you're kind of involved a little bit to see that process, to see it start to happen, you know,
to have an AI agent that's going to stand in front of your spam, you know, to be paid for every
message that comes into your box, you know, to start to implement these things, to have an AI person
answer your phone for you and be like Walker's phone. And then you're like, give him a, give him
a British accent, you know, blah, blah, blah, you know, and to like get some of these things that
are, that are pivoting and coming together through teams that have done it before, and they know
how to save money, and they're not out there yoloing. Every, every company is doing great.
Zaprite, you know, Zaprite was interesting because they went so long without an update,
you know, and just a few calls here and there checking in on the founder and then bam, Parker,
Lewis joins, bam, Will joins, bam, no longer free subscription only, you know what I mean? And it's
like bam, partnership with Unchained for, you know, corporate accounts and like everything
starts happening, you know, the Bitcoin company, Ben Price, you know, I believe he had a record
month this month, just killing it. That's gift cards. That's gift cards, you know, when you hit
a profitable moment. Okay, forget about all the Neobank stuff, forget about card linked offers
and everything else that you want to roll out down the roadmap. But like, when you can get your
company to a point where you finally hit that cashflow break even, like, that's a huge moment.
Look at Jan three for crying out loud, Jan three is all over the world meeting with world leaders,
we were lucky to even get in that round. Trust me, they did not need our pittance. Okay, but they
liked us. And you know, we make up for in heart what we lack and check size. And they're all over
it right now. How are they going to make money? I mean, we'll see your DCA nation states, let's
see what comes of it, you know, and they were heavily involved with the volcano bonds, I believe
that's that's shifted now, volcano energy. But I mean, every company man, and they're they're
bringing Bitcoin to every end of the world. And it's just so exciting, right? This the lightning
network connecting every country on the earth. Okay, I mean, like, remember those early like,
lightning network graphs, you know, where you'd see this like visualization, now it's like a
freaking ball of yarn, right? But you know, early on, there, there weren't that many, you know,
and I picture the world that way when I think about a lot of our portfolio companies, I picture
this map. Okay, and you can see in every one of these companies, you can see them, you can see
them connected, right? You can see that strikes send globally network is connecting the entire world,
right? And then you have pouch in Philippines with Ethan, and you have Osmo, and you have all of them
all over the world, okay, neutron pay in Vietnam, okay, and you all connect through these rails.
And now you can start to send money from fiat, over lightning into fiat in their native country,
and both the people have no idea that Bitcoin was even involved. And that just gives me goosebumps
to just think about, you know, I was on a call yesterday, this guy in India, and he was like
some crypto guy, and I'm like talking to him about we just invested in Indian remittance Bitcoin
startup. And he's like, there's no way that works. And I'm like, what's your phone number?
And I plug in his Indian number and boom, a dollar from my Chase account lands in our in his account.
You know what I mean? That is incredible. And that type of stuff just gets me super excited.
Man, that that just got me pumped up. I mean, because because I love I love to hear about this.
And I think that the more people that hear about all of the incredible companies that are and these
teams to that are just building out incredibly useful real world solution solving tech on top
of Bitcoin in and around Bitcoin and the Lightning Network, even I think you've got a couple of
companies that are utilizing Noster as well and building on Noster, like, that's incredible.
And they're solving real problems. They are being they're forced to be probably
more frugal because of recent bear marketiness. But now you're seeing this kind of explosion, right?
And people are starting to become profitable. They're having a positive cash flow. Like,
it's amazing to see that. And especially getting to just, you know, you meet some of these folks
at Bitcoin conferences and you're like, man, couldn't happen to a better guy or gal.
You love to see these people succeed because their hearts in the right place. And I think that that,
you know, not to sound too mushy, but I think that that genuinely matters. And if you want to
build something that's lasting and that is going to have a positive impact, you need to have founders
and a founding team and also VCs, whose hearts are in the right place. And so I think that's a
beautiful kind of alignment of values. And I'm just glad that it's happening out there, you know,
but, Maz, this has been awesome. Last question off topic, but anything you're reading right now
that when you're not, you know, giving advice and doing that or anything that you would recommend
book wise, I like to ask this question just to, to mellow it out at the end. Okay, so outside of like,
all the boring venture capital books and all outside of all that stuff. Yeah, well, I think
that's a good question. Yeah, well, anything you want really. Okay. So yeah, there's just too many
VC books that no one cares about. All right, there's a, there's a really cool spiritual book. It's
called Living Untethered. And my wife, Anna runs a Bitcoin and spirituality all women's book club.
Okay, so it's very big. Carla would be a great candidate. I might be able to get her in, but
you know, where we have that distance problem. But anyway, the book is called Living Untethered.
It's by Michael Singer. And it's really, it's a lot. It's a lot to take in. The audio book is not
as good. Because it's one of those things where you read like three sentences and you just have to
like stop and just like, think about like everything I've done in my entire life and who I am as a
person and like, why am I here and like, am I an asshole and whatever. And then, and then you like,
you know, highlight that part and then you read like another half a page and you're just like, wow,
I'm never going to get through this book. But yeah, it's really cool.
Well, nice. Appreciate the recommendation. And then I'll, I will link lightning ventures and you
in the show notes. I'll also link your podcast as well for folks that want to check that out,
because you're talking to founders, you're talking other VCs all the time, anywhere else that people
should go to check out more or website best. What do you say? Well, you have a podcast. We
do a few little interviews with founders when we invest and try to get something into the archives.
Okay. So, you know, if anyone is interested in investing in Bitcoin startups, you can click
the join button on our website, LTNG.Ventures. And if you just fill that out, we will send you
an invitation to join our group that bypasses some wait period and paperwork and other things.
You can just fill that out and you can click what kind of Bitcoin or you are. And maybe if you have
some special skills or something that you want to note, because that's what it's all about, right?
And it's great for networking also. It's not just about whether you're investing or not. It's about
just being a part of the network. We've had people who are in our syndicate who didn't invest in a
deal and ended up becoming advisors with companies because they have specialized knowledge in ad tech
or whatever. And they ended up and that's all them, right? And that's all great. And it doesn't
benefit me. It just benefits the companies, which I guess benefits me, right? Because they're beloved
portfolio companies. So just getting quality people in the group is great. I meet people sometimes
and they're like, oh, I'm not really investing, you know, I mean, like, that doesn't matter. You
know what I mean? You're seeing deals, you know, you're putting together, you're getting your brain
around some of the best opportunities that are out there. So that's the way you can get started
investing. If you are a founder, if you're building something, if you are raising around or getting
ready to raise around, we're a great vehicle for that. Everything from early stuff that maybe
doesn't have a VC, but certainly are incorporated and everything else to later stuff like strike
series B, we had a little allocation in that round too. And we can often help fill out your
fund raise. So if you were raising $2 million and you had one and a half million, you know,
maybe we can help you with that and bring some of the true Bitcoin community on involved. And
you never know what you're going to get out of there. So that's really what we're all about.
And that's, we're just going to keep trucking on. We're going to do the best that we can,
Walker. And for Christ's sake, man, I can't believe that we got through this bear market.
Like it was, it was very hard for us, just like everyone else.
And well, you're, you're coming out of the tunnel now. I lied, I have one more very short question,
because I want to just hear your elevator pitch for why should people invest in Bitcoin companies
instead of just putting their money in Bitcoin? Ah, the number one question that Bitcoin VCs get
asked. That's what we have to throw it, right? And you know, it's interesting because Bitcoin,
because LPs and investors in Bitcoin funds are smarter than the average person. Okay. Anyone
who's investing in a Bitcoin venture fund is way smarter than somebody who's investing in a
generalist VCs next fund, because that person that invests in is not comparing his investment to
Bitcoin. Okay. That person is like, Oh, this is the guy he's going to invest in electric sneakers and
you know, blah, blah, blah. And they don't compare it with like Bitcoin because they're not even like
cool like that. Right. So LPs in the Bitcoin land, yes. Right. We have to outperform Bitcoin. We have
to outperform the best performing asset over the last 10 year period. Okay. And it has been the best
performing asset over a 10 year period, but not for that entire 10 year period. And when you look at
that smaller timeframes in there of years, there are many, many Bitcoin startups or early stage
venture startups that have outperformed Bitcoin as a whole over that time. There's two real ones
because there's not many public comps to use. We have to use like Coinbase and Kraken, you know,
and Coinbase is like a 4000X from their early round to when they went public. And then the stock
probably cratered from there. I mean, I, but I just mean you get the idea, right? And Bitcoin
didn't do that. And there were times over that period where Kraken had returned 115X and Bitcoin
had returned, you know, 45 to 50X. Okay. So they both did very well. But, you know, it should outpace
it. Right. Now, the difference is this is if you were investing in, pick a company, right, like
start nine, okay, the chances of something like start nine going from pick evaluation, right,
let's just use round numbers. The chances of a start nine going from 10 million to 100 million,
okay, in like a year and a half. Okay. I've seen those things happen. I have personal angel
investments that are up 80X. Okay. In less than three years. That's going to be very hard for
Bitcoin to do at this point in time. It's going to be really hard for Bitcoin to just 10X from here
to 360,000. Now, sure it can happen, right? Because it's Bitcoin and nobody has any Bitcoin and it's
a big world and it's Bitcoin, right? So it could happen. But at the same time, it can happen with
these startups a lot faster and can go a lot more. So I like to think about it as it's a way to
diversify your hotel position. Okay. And no, I wouldn't come into three angel investments for
six figures each and do that. I would just invest small amounts, right? I would read the updates.
I would follow along and I would just get my teeth, you know, before I went out there and really did
anything substantial. Now, conversely, what are the odds of start nine failing and going to zero?
And what are the odds of Bitcoin failing and going to zero? So there's certainly another risk that
needs to be considered there. It's not likely that Bitcoin's going to fail and go to zero, right?
And with a lot of these startups, no matter how great they're doing, there is certainly
a significant risk, okay, that they may never achieve traction or substantial exit, okay? Or
maybe you only get three times your money back. Okay, that's a lot of people don't talk about that.
It's like it's either to the moon or zero, you know, there are many exits where you just get
your money back. Hey, guys, we invested $100,000 13 months ago. It wasn't the best outcome. Maybe
you saw the story. Here's a note from the founder. We got $100,000 back and we're going to wish him
well. Okay, now your money was tied up for 13 months. Okay, what did Bitcoin do in that 13 months?
It could have went down. It just did for a really long time. It went down. Okay, and now you're
going to look at that and be like, Oh, that sucks, man, you know, I got my $1,000 back and Bitcoin's
now 30% higher. Well, like, you know, it goes the other way too, you know, so it's all about timing.
Our first fund, you could have sold less than half of Bitcoin or half of Bitcoin, let's call it,
and you could have invested $25,000 at like a $60,000 Bitcoin price. Okay, the Bitcoin price,
if you're measuring your wealth in dollars, sorry, if I'm like dumb, but if you are keeping score in
dollars, you're down 50% right now. Actually, less than that, we rallied a little bit, right? We're
38, but you haven't done great. And like our fund, especially after these next markups happen,
has a positive IRR. So I don't know, but I don't know what's going to happen next, you know? And then
that timing aspect of it is a crapshoot wherever you're at, right? Because right now, if you have
$38,000, is it a better bet to invest $38,000 into any fund or a Bitcoin venture fund or any
BC fund or anything, right? Or is it just better to buy one Bitcoin, stick it in your cold wallet,
and fucking forget about it? You know, that's $38,000, might want to stack one, you know?
And when you're like Walker, and you already have hundreds and thousands of Bitcoins,
you know, you put in $30,000 into a venture fund to call it.
This is, for anyone listening, I got into this space in 2020. I am a recent adopter,
but I appreciate that context, Muzz, because I think it's important, right? And it's a question
that people obviously ask you a lot. And I think, for me, at least the one other side that I'll add
is just, it's a cool thing, even if it's not with very much money, but to invest in Bitcoin
companies, if you believe in what they're doing, and just from a, I think that what you're doing is
great, I think it's going to be a valuable product service. And I think it's going to make the world
a little bit better. Like, investing in Bitcoin companies is actually effective altruism,
but you actually might make some money off it, and you're not just a masquerading piece of shit,
like most effective altruists. But yeah, with that, Muzz, unless there was something else
you wanted to toss on top. I can't, we'll never get out of here, right?
I know, I know. We'll just have to do it again then. That's the only solution.
All right, you got it.
We'll do a market update leading up to the having. How about that? See where things are.
But then, Muzz, thank you so much. I'll link everything in the show notes. I appreciate your
time and all you're doing for the Bitcoin space. I hope people listen to this and go,
if nothing else, just check out these companies that you mentioned that are building really cool
shit, because that's what it's all about, right?
Yeah, thanks, Walker. You're the best, man. Give my love to Carla.
I will, man. Cheers.
And that's a wrap on this Bitcoin Talk episode of the Bitcoin Podcast. If you are a Bitcoin
only company interested in sponsoring another fucking Bitcoin podcast,
head to bitcoinpodcast.net or hit me up on social media.
On Noster, head to primal.net slash Walker and on Twitter, search for at Walker America or at
TITCOIN podcast. You can also watch the video version of this show on X or on YouTube by going
to youtube.com slash at Walker America or rumble by searching for at Walker America. Bitcoin is
scarce. There will only ever be 21 million, but Bitcoin podcasts are abundant. So thank you for
spending your scarce time to listen to another fucking Bitcoin podcast. Until next time, stay free.