Interview with Kyle Samani, Managing Partner of Multicoin Capital
By Daniel Dal Bello, Director.
January 17, 2020 – 6 min read.
Kyle Samani is a co-founder and managing partner of crypto-focused investment fund, Multicoin Capital (‘Multicoin’). Kyle began programming at the age of 10, and founded an enterprise software firm developing solutions for smart glasses prior to founding Multicoin in May 2017.
Multicoin is a thesis-driven investment firm that invests in cryptocurrencies, tokens, and blockchain companies. The firm manage two distinct funds. A hedge fund investing in public markets and a venture fund investing in private markets—together exceeding US $100m under management.
In this post we share a conversation with Kyle about Multicoin’s investment approach, venture capital in the crypto-markets, investment due diligence, and Arweave—a recent addition to Multicoin’s portfolio.
Daniel Dal Bello
Kyle, you’ve been fascinated by technology and software from a young age. Tell us about your journey into the blockchain world and about your current role today as a managing partner at a leading crypto-fund.
My Dad has been programming since he immigrated to the US, so I’ve been around computers my whole life. I really became passionate about technology during adolescence, and then became infatuated with the cross section of business and technology as the first round of tech blogs flourished (TechCrunch, Anandtech, Ars Technica, etc). Since then, I’ve read consumer technology and business content every single day without exception. This has been going on for almost 15 years. The content has refined and changed, but the rigor has not.
After studying finance at NYU, I started my first tech startup in the health IT space called Pristine in May 2013. Pristine built software for Google Glass for surgeons; it was one of the only use cases for Glass that really made sense. After raising a Series A and growing to millions in revenue, Google killed Glass, which effectively ended my business. I pivoted the company, and Pristine was ultimately acquired. Through this process, I learned the hard way what platform risk means. And so when I discovered Ethereum a few months later, I was immediately drawn to it as an open development platform that no one could take away from me. That was in early 2016.
“And so when I discovered Ethereum a few months later, I was immediately drawn to it as an open development platform that no one could take away from me.”
Over the course of 2016, my interest in crypto grew from a curiosity to a passion, and by early 2017 I realized I wanted to invest in crypto professionally. At that point, Tushar and I made the decision to launch Multicoin, and we launched our hedge fund on October 1, 2017.
Daniel Dal Bello
As I understand it, you have a relationship-focused approach to your work. When you are evaluating a potential investment, what do you look for when speaking with entrepreneurs and founders?
Like most other venture capitalists, there are a few major criteria we are considering:
- Founder/market fit: What is it about the founder’s background that makes them uniquely suited to solve the problem at hand?
- Market size: How big is the market? If the idea works as intended, how big can it get?
- Defensibility: If the idea works and starts to grow, inevitably it will attract competition. How does the business / protocol develop moats that make it difficult for followers to catch up?
- Crypto: Our mandate is to invest in crypto-enabled businesses and protocols. So we need to understand the unique crypto angle to the investment thesis.
- Team: I think of three major sub-categories here:
- Do the founders have the background and skill set to pull this off,
- Are they coachable to learn what they don’t know, and
- Are they committed enough to make it happen?
Startups are hard, and founders face all sorts of obstacles. They have to persevere in spite of obstacles.
How can we be a value-add? We will not invest if we cannot add value beyond capital.