Jul 2, 2018 · 28m · 20vc
20VC: Why Most The Value In Crypto Will Accrue in Governance, When Institutional Capital Will Enter The Space and How To Think About Liquidity In Crypto with Joel Monegro, Founding Partner @ Placeholder.VC
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In this episode of The 20 Minute VC, host Harry Stebbings interviews Joel Monegro, Founding Partner at Placeholder VC, about protocol value accrual, crypto fund mechanics, institutional adoption, and why network governance is central to long-term token value.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 30.2% of the talking time here. How this is scored →
Harry as informed peer 2.7 Guest teaching 4.7 Guest disagreement 0.5 Harry pushing back 0.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 25:10 Clarifying investment process
Joel gently dismantles the traditional pitch premise by pointing out that Placeholder did not 'say yes' to Decred because public networks do not ask for investment.
Hardest push from Harry ▶ 17:52 Paradox of illiquid fundsHarry presses Joel on whether using a 10-year traditional venture structure conflicts with LP expectations for immediate crypto liquidity.
Biggest teaching moment ▶ 8:50 Commoditization of proprietary dataJoel articulates a broad IT historical framework showing how crypto commoditizes proprietary data layers just as microprocessors commoditized hardware.
Harry holds his own ▶ 17:52 Challenging fund structure logicHarry demonstrates strong industry awareness by questioning the alignment of 10-year VC fund lockups with inherently liquid crypto assets.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Joel Monegro's Background and the Founding of Placeholder | 2 | 3 | 0 | 0 | Harry opens with standard biographical prompts regarding Joel's transition from the Dominican Republic government to USV and Placeholder. Joel explains how comparing Bitcoin's performance to seed-stage crypto equity investments shifted his perspective toward asset ownership. | |
| IT History Cycles and Commoditization of Proprietary Data | 2 | 6 | 0 | 0 | Joel walks through historical IT cycles, from transistors to Linux, illustrating how open standards commoditize lower layers. He educates the host on how blockchains will commoditize current proprietary web data incumbents. | |
| Institutional Capital Entry and Traditional VC Dynamics | 3 | 5 | 1 | 0 | Harry relays questions from Albert Wenger regarding institutional capital and traditional VC entry. Joel explains that traditional VCs face steep learning curves because managing crypto networks requires novel governance and economic frameworks. | |
| Portfolio Construction and Fund Structure in Crypto | 4 | 5 | 1 | 4 | Harry challenges Joel on whether using a 10-year venture fund structure for liquid crypto assets is paradoxical. Joel explains that the 10-year lockup protects the fund and LPs from panic selling during high market volatility. | |
| Cryptoeconomics and Governance over Copyable Features | 3 | 5 | 0 | 0 | Harry quotes Kyle Samani regarding copiable features in crypto. Joel expands on this by explaining that long-term value lies in cryptoeconomics and governance rather than software features. | |
| Quickfire Round: Books, Governance Value, and Market Monitoring | 2 | 4 | 1 | 1 | In the quickfire round, Joel lightheartedly corrects Harry's question about why they 'said yes' to an investment, clarifying that public network tokens are bought directly rather than pitched. He also discusses Antifragile and market monitoring habits. |
Statements from this episode (12)
Monegro: Investing directly in crypto assets beats traditional startup equity
“We bonded over our shared belief that the most interesting place to invest in was in the assets themselves and the crypto assets that were being created with blockchains as opposed to companies.”
Monegro: Buying Bitcoin directly outperformed USV's early-stage crypto equity investments
“I calculated how much better or worse an investment it would have been to just buy Bitcoin and buy the same amount of dollars worth of Bitcoin, and found that Bitcoin would have been a much better investment”
Monegro: Crypto will commoditize major web incumbents over the long term
“And so now the value in crypto is no longer in the data itself, and ultimately that's for the long term, that's what's going to commoditize the web incumbents that we have today.”
Monegro: Big Tech will not be affected by crypto in short term
“So the companies that I mentioned, Google, Apple, Facebook, Amazon, they're incredible. And will continue to be for quite some time. It's not like they're going to be affected by the rise of crypto in the short term.”
Monegro: Regulatory clarity is required before institutional capital enters crypto
“I think we're going to see more of those this year, but ultimately, I think that before Before institutional capital can really rush in, we're going to need more clarity from the regulatory side.”
Monegro: Traditional VCs must hire crypto specialists or fall behind
“And so for existing VCs that are moving into a space, they either have to recruit people that are going to spend all of their time in this market learning about this market, or they're going to have a tough time catching up.”
Monegro: Placeholder is prioritizing crypto infrastructure investments over application layers
“We focus on our thesis, so we believe that we're at a stage now where infrastructure is particularly important because there's a lot of building blocks for Crypto applications that don't exist yet, and so things like file storage and networking and things like…”
Monegro: Liquid fund structures force crypto managers to sell during market downturns
“A frenzy where there will be massive rises and massive falls, and when you have a more liquid fund structure, that can end up screwing you in interesting ways. If you're now bound by the whips of the market, if your investors can pull out of the fund because i…”
Monegro: Crypto networks cannot win long-term on software features alone
“Features can be copied, and you can't win in this market solely on the basis of features.”
Monegro: Steem's early token crash was driven by excessive inflation
“When they started out, they had an economic model that created a bit of a bubble and then that crashed pretty quickly because they had an inflation rate that was way too high.”
Monegro: Most value in crypto will accrue to network governance
“I believe that governance is where most of the value is going to accrue in crypto at the end of the day, precisely because of what Kyle pointed out, features, functionality can be copied, and the thing that you can't copy is a community, and the thing that Kee…”