Q1: Hey, welcome to Unhashed! Please tell us a little about yourself and how you started with One Big Fund.
Hey, thanks for having me here. I’m Zachari Saltmer. Fellow peers call me ‘Zatoshi’ because of my trading experience in this industry. I joined the blockchain industry in 2013. That was the year I purchased my first Bitcoin. One Big Fund is a result of intense brainstorming to structure the fund, its purpose, and its goals. We wanted to build something that was purpose-driven and didn’t simply go after what’s the most trendy thing in town. At present, we are expanding our partnership network, and we’re in talks with many ambitious founders. I can tell you one thing, every day, I wake up, I’m thankful that I’m doing something that I am passionate about.
Q2. The funding scene in early-stage tech companies has been active lately after a laid-back 2022. How do macroeconomic conditions affect your decision-making and the pace at which you cut cheques or lend support?
Yeah, very true. The funding arena is not hitting the headlines regularly, but a lot of work is going on behind the scenes. Talking about numbers, it’s definitely been smaller valuations and cheque sizes, but it’s still steady, with raises both on-chain and off-chain. However, we are confident that the funding market will improve in the coming months. And speaking about the impact of macroeconomics, we still haven’t felt any drastic impact yet. More so, we have proactively prepared for market cycles and have positioned the fund accordingly. Right now, we have actually got our eyes on a few opportunities. As for lending support, we’re always happy to take a look at a pitch deck and give some advice from time to time. It doesn’t hurt to ask - does it?
Q3: At the incubation stage, what sort of support can a founder expect from One Big Fund? And conversely, what does One Big Fund look for in the founding team?
First off, and most importantly, we ourselves are accustomed to what founders go through when starting a company. Planning, hiring, finances, networking, go-to-market strategy — all the critical decisions a founder needs to make during their journey. We understand them and know the grind behind these actions. Our incubation program is designed to make lives easier in a few of these aspects for the Founder. We have managed to deliver a more guided experience for founders, an extension to their team you could say. Alongside, we directly introduce them to our partner network which includes key industry leaders in the blockchain space. And what do we look for? Well, there are four key traits we want to see first in a founding team which are Initiative, Ambition, Leadership, and Transparency. The market opportunity is also a huge deciding factor; how well does the team know its market? Have they run tests with their target market? Also, the best way to find out what we look for is by reaching out to us.
Q4: Out of your experience, how has due diligence evolved in the last decade? And please talk about how the involvement of tech has impacted the process of due diligence.
Well if you’re speaking about blockchain, back in 2021 and 2022 — there barely was any. Thorough research was missing. Numbers weren't crunched enough. Documentation was all over the place. And all of those culminated into - we all know what happened right? I think that’s definitely been a major factor in the change of processes for many. It was a much-needed alarm for the industry as a whole. Now, actual DD docs are being passed around, and people are talking about buy sheets and memorandums. These are little steps in the right direction. One more key observation is that some crypto VCs have never even heard of the tools traditional venture capital firms use for decision-making. This makes it even harder to evaluate the feasibility of a funding opportunity. And decisions without a sound rationale behind them are most likely to backfire.
Q5: Due diligence standards in crypto have come under intense scrutiny in the past year or so. How has One Big Fund equipped itself for crypto-specific due diligence? And in this pursuit, what are the key issues you have faced?
Intense scrutiny is an understatement. We have geared ourselves by partnering with companies that will help our DD processes. These include tools like intelligence platforms and KYC / KYB providers. Verifying activity and knowing your customer and business is definitely crucial before writing any tickets in today’s world. A key issue I’ve learned through experience is identifying who you’re going to be doing business with and making sure they have a track record. Gone are the days of logo-ships (Logo partnerships on a website) being proof of credibility. Referenced connections are essential and at times, can make or break a deal. Discipline in finance is a huge must. It takes a vast amount of mental strength to remain in the space, not being afraid to fail and learn from your mistakes is also something I’d recommend to new founders.
Q6 The intertwining of AI and crypto has been in the headlines in the past few months. What do you think of the blend of these two innovations from an investor's point of view? Are they a natural combination feeding off each others’ functionalities or are they a short-term buzz?
It sure has, we actually have an AI venue in our fund; it’s extremely fascinating technology. Artificial Intelligence has been around since the late 1950s - so it’s nothing new. But, what we see today is a combination of digital marketers and the rise of ChatGPT that has caused a huge influx of hype-generating content, projects, and companies. Not to say it’s all hype, but there are some really brilliant data scientists programming amazing things out there. The goldmine is in finding them and looking for results beyond marketing. There are also synergies between both technologies like how AI can complement blockchain tech and crypto. Although there is no telling what the future holds, we have a hunch that we’re going to see AI in our lives more and more in the years to come. So, a short-term buzz would be an unwise way to look at this.
Q7: Similarly, what are your thoughts on investing in disruptive technologies and emerging markets? Lack of liquidity seems to be a common concern in this pursuit. How do you mitigate it?
I think blockchain plays a huge role in disruptive technology across multiple landscapes. There is a lot of synergy brewing amidst different technologies. And this opens up several new investment avenues. And yeah you’re right, there has been a lack of liquidity lately, which is not to say it won’t improve. Assessment of multiple liquid market areas should be on the agenda of all funds that want to discover market opportunities. Data will be your best friend in this case. As for traditional finance, well, I mean open up that Bloomberg Terminal. Hope and optimism are present in the market. The only question is - are you able to spot it and cash in on it?
Q8: Moving forward, how do you think the Venture Capital landscape will change? More importantly, what’s your opinion on investing in hyper-local and regional businesses?
I believe it’s already making a huge shift; there are more blockchain venture capital funds now than there were 2 years ago. As for the traditional institutional VCs, I think they’re still making their entry into the blockchain market, with more following suit as new market opportunities are discovered. Blockchain still has untapped market potential in terms of financial instruments that could be created from the blockchain space. A tokenized future is coming whether we’re ready or not is the question I think everyone should be asking.
This interview was done by Mohammad Musharraf
Source of original interview: Hackernoon