Tomaino: Crypto fund managers must beat a 50/50 BTC/ETH benchmark
Nick Tomaino · Nick Tomaino: The Future of NFTs, What Will Happen with FTX & Who Should be Held to Account | E1076 · 20VC with Harry Stebbings · Oct 30, 2023 · at 27:42
Nick Tomaino, founder of crypto VC firm 1confirmation, argues that crypto venture funds should be evaluated against a passive index of Bitcoin and Ethereum over a decade.
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“I mean, as a venture manager, you get paid two and 20, maybe more, maybe a little more, maybe a little less, but those are meaningful fees. The reason that you get those fees is because you can outperform you know, an index and you know, every private equity Firm you know, uses a public market equivalent. So if you're investing in healthcare you know, you're measured against a basket of public healthcare companies, right? Or whatever the industry is. So, you know, the same, it needs to be true in crypto where you know, an investor can just have a basket of 50% Bitcoin and 50% ETH and hold it for you know, 10 years and only pay you know, a one percent or less fee of, you know, to buy it. Every LP should be thinking you know, if I'm giving this fund manager money are they going to be you know, significantly outperforming that basket, you know, to justify the two and 20 fees that, that, that I'm giving them?”
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