Jun 13, 2022 · 54m · capital-allocators
Marcos Veremis – Allocator's Perspective on Blockchain (EP.254, Crypto for Institutions 2, EP.01)
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In this opening episode of the 'Crypto for Institutions II' miniseries, host Ted Seides interviews Marcos Veremis of Accolade Partners to explore institutional blockchain investing, manager due diligence, and portfolio construction frameworks. Veremis shares insights from his journey building institutional crypto research practices to deploying venture capital into seed-stage funds and navigating volatile market cycles.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 22.6% of the talking time here. How this is scored →
Ted as informed peer 3.8 Guest teaching 4.0 Guest disagreement 0.4 Ted pushing back 0.6
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 49:21 Dismissing fund scale with venture math
Marcos immediately rejects Ted's platform scale premise by asserting that fund outperformance is simply a mathematical function of ownership and fund size.
Hardest push from Ted ▶ 48:54 Challenging small-fund bias using platform scale analogyTed counters Marcos' preference for smaller funds by citing sectors like multi-manager platforms where large funds consistently win.
Biggest teaching moment ▶ 49:21 Venture return mathematics breakdownMarcos educates listeners and breaks down the exact math showing why a $50M fund needs a $1B unicorn to return fund capital while a $500M fund needs a $10B outcome.
Ted holds their own ▶ 16:50 Naming tier-one crypto venture managersTed demonstrates his institutional crypto market familiarity by reeling off key players like Andreessen Horowitz, Paradigm, and Multicoin to frame the tier-one landscape.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Miniseries Overview and Anchorage Digital Sponsorship | 0 | 0 | 0 | 0 | Ted provides an introductory monologue, sponsor acknowledgement for Anchorage Digital, and sets the stage for the second Crypto for Institutions miniseries. | |
| Personal Origins: The Greek Financial Crisis and Discovering Bitcoin | 3 | 4 | 0 | 0 | Ted asks open questions about Marcos' transition into crypto. Marcos explains his personal awakening to Bitcoin during the Greek debt crisis and capital controls. | |
| Building Institutional Crypto Research at Cambridge Associates | 4 | 4 | 0 | 0 | Ted inquires about institutional adoption rates and Cambridge Associates' early research. Marcos outlines the gradual growth from a dozen curious clients to widespread institutional interest. | |
| Categorizing Crypto Within Institutional Portfolios | 4 | 4 | 0 | 0 | Ted probes where allocators bucket crypto and Marcos' move from research consulting to managing capital at Accolade. Marcos describes treating crypto primarily as early-stage, volatile venture capital. | |
| The Rise and Evolution of Tier-One Crypto Managers | 5 | 3 | 0 | 1 | Ted actively names industry heavyweights like Paradigm, Multicoin, and a16z to test tier-one classifications. Marcos discusses how early managers formed moats and expanded their fund sizes. | |
| Diligence Frameworks, Manager Backgrounds, and Community Channels | 4 | 4 | 0 | 0 | Ted explores qualitative diligence and monitoring community channels like Discord and Telegram. Marcos explains how crypto diligence differs from traditional hedge fund analytics. | |
| Portfolio Construction, Liquidity Dynamics, and Token Distributions | 5 | 4 | 1 | 2 | Ted points out the tension between closed-end venture structures and early token liquidity. Marcos details the two manager camps regarding distributing cash versus long-term holding through cycles. | |
| Capital Pacing, Geographic Diversification, and Sector Specialization | 4 | 5 | 0 | 0 | Marcos shares capital deployment metrics and explains geographic and vertical diversification, contrasting American and European deals like Dapper Labs and Sorare. | |
| Fundamental Valuation Methods and GP Behavioral Psychology | 4 | 5 | 0 | 0 | Ted asks how fundamental valuation applies to tokens and how GPs handle massive windfall profits. Marcos outlines discounted cash flow models for governance tokens like Uniswap. | |
| Systemic Ecosystem Risks and the Internet of Value Thesis | 4 | 5 | 1 | 1 | Ted questions remaining systemic risks in the sector. Marcos identifies leverage and bridge hacks as ongoing technical vulnerabilities while arguing that regulatory risk is no longer systemic. | |
| The Mathematics of Fund Size and Seed-Stage Asymmetry | 5 | 6 | 2 | 3 | Ted pushes back on favoring seed-stage funds by citing platform hedge funds where scale wins. Marcos counters directly with the venture mathematical probability of ownership percentage versus fund size. |
Statements from this episode (20)
Veremis: Traditional 2016–2017 VC vintages held crypto and Bitcoin exposure
“In the 2016, 17 traditional venture capital vintages, you saw some managers having exposure to blockchain, either blockchain companies or even Bitcoin on some occasions.”
Veremis: Holding Bitcoin during the Greek debt crisis would have protected citizens
“We should have had some Bitcoin next to our Greek government bonds. It would have helped a lot.”
Veremis: Institutional crypto adoption is up 5x in clients, 20x in capital
“Cambridge would have it right now, but I would say there's probably five X from then at least, like I'm taking a guess here in terms of client number. In terms of dollars, probably 10 X or 20 X.”
Veremis: Most institutions treat crypto as a venture capital sub-allocation
“I think at this point, It is considered a sub-allocation to venture capital by the vast majority of institutions, and it's just a much more volatile subset of venture capital because there, there's early liquidity, you know, portfolios start having marks, they…”
Veremis: Early crypto VC managers hold deal-winning moats over new entrants
“Fast forward to today, you know, obviously there are network effects and moats around their early activity and they're winning more deals. It's easier for them to win deals and new entrants on average.”
Veremis: Only 15 to 20 crypto fund managers are considered elite
“I would say there are about 15 to 20 at this point, with maybe 10 being the elite elite, like league one, at least in the perceptions of people.”
Veremis: Scaling past $1B fundamentally changes crypto venture fund dynamics
“When you have a fund size of a hundred million or 200 or 300, and then you have a fund size of a billion or more, it's a different ball game you're playing. So I think that for the vast majority of these elite firms of 2018, 2019 have become substantially larg…”
Veremis: Referencing entrepreneurs is far more important than speaking to LPs
“You try to speak with many entrepreneurs. That's probably more important, substantially more important than speaking with LPs, I would say, or GPs.”
Veremis: NFT investors disconnected from Discord communities lack insight
“So if somebody is investing in NFTs and is not plugged into the discourse and communities, it's a big question mark. How do you have special insights here? What is it that you're basing your decisions on?”
Veremis: Ethereum outperformed most crypto venture and hedge funds net of fees
“And in fact, Ted, if you look at how Ethereum performed over the past few years, it's beat most funds, net of fees.”
Veremis: Crypto VCs up 20x should distribute at least 5x to LPs
“I would want them to distribute a fair amount in my mind. I would like them to distribute more than one or two X. Would like them to distribute five X or six X. That way the investor has locked in a historically amazing return and then has the option for much …”
Veremis: Crypto venture funds raised $10B in Q1 2022 after $25B in 2021
“Last year, the industry raised about twenty five billion or so in capital on the venture side. In the year before, 2020, the number was three billion. This first quarter alone, the industry raised ten billion.”
Veremis: High capitalization will allow crypto industry to weather a bear market
“What's for sure is that the industry is better capitalized than ever. So in some ways, like even if there's a softening and valuations go down and there's a bit of a bear market, it should weather it pretty well in my view.”
Veremis: Geographic proximity still matters for early-stage crypto deal sourcing
“Especially in the earlier stages, even though crypto and blockchain are global, the startups are global and distributed most of the time in terms of teams at the early stages, the sourcing, the geography and with regards to the sourcing matters, take for examp…”
Veremis: Sector specialist venture funds hold an edge over crypto generalists
“We think that managers like that in a vertical like this have an advantage and why? Talk to entrepreneurs. Ask them. The one thing they will tell you is, we love the crypto guys. They gave us some of our first checks. I'm talking about the ones that have devel…”
Veremis: DeFi governance tokens like UNI can be valued via DCF
“Take Uniswap as a governance token, the Uni token, or other types of DeFi tokens. Effectively, they give governance rights on a platform that performs a service to the holders of it. And either today or in the future, they can give also economic power to these…”
Veremis: Fund managers' character is tested in crisis and windfall success
“It is my general belief that you truly understand people in two situations. In crisis and when things are really good, you see the sides of the people. In crisis, you see, you know, whether they have the grit and the persistence and the stamina... Now with big…”
Veremis: Crypto Regulatory Risk Is No Longer Systemic
“And then regulatory risk.
I don't think it's systemic anymore.
I could be wrong.
I think it was systemic in 2018.
You could have seen some really aggressive action against crypto back then.
Now, how can it be?
Like, I think, 30, forty million Americans hold so…”
Veremis: Blue-chip VCs are moving away from early-stage investing
“You're seeing the blue chip guys sailing away from the early stages with the fund sizes. So we've been focused on finding the new seed managers, pre-seed managers, etc.”
Veremis: Biggest career mistake before crypto was not taking enough risk
“The biggest mistake I made was, I think, prior to researching crypto and taking a deeper dive is I didn't take enough risk. I think the transformational moment in my life was when I saw the Greek crisis. I go back to that, and I saw that Even if you think you'…”