Oct 4, 2017 · 28m · top-founders
802: Crypto VC: After $10m Raised in ICO for Fund 3, Now Demand High for $250m Fund 4
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In this episode of The Top, host Nathan Latka interviews Spencer Bogart, managing director at Blockchain Capital, about the institutional scaling of cryptocurrency venture capital. Bogart discusses Blockchain Capital's fund evolution from early tokenized raises to a $250M fund, the mechanics of token economics in portfolio bets like Civic and Coinbase, and regulatory hurdles facing Bitcoin ETFs.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 47.4% of the talking time here. How this is scored →
Nathan as informed peer 4.2 Guest teaching 3.9 Guest disagreement 1.2 Nathan pushing back 2.5
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 10:42 Spencer rejects target underselling narrative
Spencer rejects Nathan's suggestion that they deliberately undersell their fund target to secure a PR win by beating it, stating they have an absolute hard cap.
Hardest push from Nathan ▶ 22:18 Nathan challenges Coinbase incentive structureNathan insists that Coinbase has a perverse incentive against direct commercial adoption of crypto because it would eliminate retail exchange fee volume.
Biggest teaching moment ▶ 23:18 Spencer reframes exchange revenue and circular economySpencer educates Nathan on why merchant processing is negligible and how a circular economy actually expands exchange volume through fiat on-ramps.
Nathan holds their own ▶ 14:47 Nathan maps token incentives to tech ecosystem fundsNathan demonstrates strong business acumen by accurately analogizing Civic's 33% ecosystem distribution to developer ecosystem funds by Stripe and Slack.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Episode Preview and Blockchain Capital Overview | 0 | 0 | 0 | 0 | Solo intro and promo segment where Nathan introduces Spencer Bogart and Blockchain Capital's fund metrics before promoting GetLatka. | |
| Examining Crypto Honeypots and Grayscale's Trust | 5 | 5 | 1 | 2 | Nathan asks whether Grayscale's centralized structure creates a honeypot security risk compared to decentralized crypto. Spencer affirms the honeypot concept but contextualizes that exchanges like Poloniex and Kraken present even bigger centralized honeypot risks. | |
| SEC Regulatory Odds and Bitcoin ETF Outlook | 5 | 6 | 2 | 3 | Nathan references Spencer's past prediction of sub-25% odds for SEC Bitcoin ETF approval and presses him on whether that still holds. Spencer breaks down the asymmetric downside career risk for SEC regulators and details the Winklevoss ETF appeal process. | |
| Blockchain Capital's Fund History and $250M Target | 5 | 4 | 2 | 3 | Nathan inquires into Blockchain Capital's fund progression, teasing Spencer about potentially beating their $250M target for PR. Spencer firmly rejects the framing, stating they are strictly hard-capping the fund to prevent return dilution. | |
| Analyzing Civic's Token Economics and Dual Structure | 7 | 6 | 1 | 4 | Nathan demonstrates solid financial knowledge by drilling into cap table mechanics, convertible notes, and token sale distributions for Civic. Nathan accurately draws a parallel between network token reserves and developer ecosystem funds like Stripe's or Slack's funds, which Spencer confirms. | |
| Operational Mechanics of VC Token Participation | 5 | 5 | 1 | 3 | Nathan presses on the operational reality of how institutional VC dollars convert into token allocations during an ICO. Spencer explains the mechanics of queue systems, token tranches, and why they contributed in Bitcoin rather than fiat. | |
| Crypto Startup Treasury Management and Cash Reserves | 6 | 5 | 2 | 5 | Nathan challenges the optics of founders cashing out crypto immediately after ICOs, arguing it looks like selling equity or cashing out a lottery ticket. Spencer explains prudent treasury management, emphasizing teams must convert to fiat to pay developers rather than speculate on token volatility. | |
| Coinbase Market Dominance and Circular Economy | 6 | 7 | 3 | 5 | Nathan pitches a contrarian thesis that Coinbase faces a perverse incentive to oppose direct crypto commerce adoption because it threatens their exchange fees. Spencer politely dismantles the premise, schooling Nathan on circular economy dynamics and explaining that merchant processing is minor compared to massive fiat-to-crypto exchange on-ramps. | |
| Sponsor: The Top Inbox Email Tool Promo | 3 | 1 | 0 | 0 | Segment starts with Nathan's sponsored midroll for The Top Inbox followed by rapid-fire standard Famous Five questions answered collegially by Spencer. | |
| Episode Recap and Concluding Remarks | 0 | 0 | 0 | 0 | Nathan closes the episode with a summary recap of Blockchain Capital's fund track record and portfolio highlights. |
Statements from this episode (12)
Bogart: Crypto exchanges are massive honeypots, Poloniex carries higher risk
“Coinbase, Kraken, Poloniex, Poloniex probably being one of the bigger risks out there. You know, these are giant honeypots of Bitcoins, and the problem is once they're gone.”
Bogart: Grayscale's GBTC is the best traditional security wrapper for Bitcoin
“The reality is that this is the best product that exists today. It's not a perfect product, but it's the best that exists today, and the only way to get exposure to an exotic asset that is Bitcoin in a traditional security wrapper, right?”
Bogart: SEC regulators face asymmetric downside risk approving Bitcoin ETFs
“If you're at the SEC, you know, this is one of those things where if you approve this particular ETF, and it goes really well, you know, nobody comes back and kind of, you know, gives you a big promotion, right? But if you do approve it, and something goes wro…”
Bogart: Odds of SEC approving a Bitcoin ETF remain very low
“I think it's still quite low. I mean, the SEC has made, you know, a pretty definitive decision about this, that the underlying markets for Bitcoin are too unregulated, and therefore they're not going to allow a regulated product. So it's kind of a circular arg…”
Bogart: Blockchain Capital capped its pioneering ICO venture fund at $10M
“We raised the world's very first venture fund via an ICO. So we limited the size. We capped it at just a small, ten million dollar offering to make sure that, you know, we can mitigate, mitigate risk there. And make sure that it's successful. That offering, th…”
Bogart: Blockchain Capital Fund 4 will almost certainly be oversubscribed at $250M
“It's almost certainly going to be an oversubscribed, two hundred and fifty million dollar fund.”
Bogart: Vinny Lingham raised $33M for Civic in token sale
“He raised, I think it was thirty three million dollars in total and did it through a process that was one of the most well-organized that we've seen.”
Bogart: Most crypto startups liquidate over 80% of ICO proceeds
“I'd say most of them are liquidating upwards of 80%, but you know, some of them like to roll the dice a little bit more.”
Bogart: Merchant processing is an insignificant part of Coinbase's business
“Merchant processing is an insignificant portion of their business, right?”
Bogart: Blockchain Capital conservatively estimates four unicorns in its portfolio
“Conservatively, we're estimating that there's probably four unicorns in our portfolio today.”
Bogart: Balaji Srinivasan reduced social media activity due to government appointment consideration
“Balaji, sort of awesome. He's gone quiet because he was up for a major kind of government appointment. I haven't heard a word on that, but it, you know, it's kind of made him a lot more quiet on social media, et cetera.”