When I first started getting this question, my answer was “open a Coinbase account and buy Bitcoin.”

Then there was a period when my answer was “open a Coinbase account and buy Bitcoin and Ethereum.”

Today, my answer is “open a Coinbase account and buy a diverse set of crypto assets.”

A diverse set of crypto assets would include Bitcoin, Ethereum, the other major layer one blockchains (Solana, Flow, Avalanche, Polkadot, Algorand, etc), the major Defi protocols (Uniswap, Aave, Compound, etc), storage protocols (Filecoin, Arweave, etc), telecommunications protocols (like Helium), some layer two protocols (like Stacks, Polygon, etc), some gaming assets (like Axie, Decentraland, etc), a maybe some NFTs.

That last paragraph is not meant to be specific. It is meant to be illustrative. And that list contains assets that I own and USV owns as well as many assets that I and USV do not own. I am not recommending any specific assets here. I am recommending a diverse portfolio and those are some good examples of what might be in one.

I do not believe the web3/crypto opportunity can be captured by simply holding Bitcoin and Ethereum anymore. You must own a broader set of assets because the market is expanding beyond the OGs now and you need to be exposed to more of it.

I believe there will be index funds that can do this for you someday. But today your options are limited unless you have the wealth and access to the premier token funds and that is hard to achieve.

Finally, I have no idea where we are in this bull cycle we are in (that is leading to so many people asking us this question right now), so I would be conservative and dollar cost into crypto. If you want to put $10,000 into crypto, I would put $1,000 a month each month for the next ten months, for example. It is hard to be patient like that when prices are rising so fast, but they can fall even faster so it is best to be careful and conservative with an asset class like this.

Finally, these are very long-term investments. If you want to buy crypto assets, you should think of them as a ten-year buy-and-hold portfolio (or longer). That will help you make better decisions as you invest in this exciting new asset class.

I wrote this mostly to send to friends who ask but figured I’d share it with everyone else too. Good luck, be careful, be patient, and have a long-term view when investing in high-risk assets.

• Seed stage is when a company has a good team, a good idea, but has not yet proven product market fit and a go to market model, and has not yet demonstrated a sustainable business model.

• These investments have a high failure rate. In my experience, roughly half of seed stage investments fail completely, wiping out everyone’s investment, including the founding team’s.

• There is a lot of dilution from the seed round to exit, in my experience, a seed investor will be diluted by around 2/3 between seed and exit.

• A power law distribution exists in outcomes in any early stage portfolio and a seed portfolio is no differernt.

So given that I am jet-lagged and got up at 3:30 am this morning, I modeled this out to see how this all works. Here is the google sheet in case you want to look at my model.

Given the assumptions in my model, a $100mm seed fund that makes all of its investments at $100mm post-money will barely return the fund. And that number is gross, before fees and carry.

Total Value At Exit $133,333,323

Fund Return 1.33

Now all of this depends on a few important assumptions.

If you believe your top-performing investment, out of 100 investments, will end up being worth $100 billion, then the numbers change a lot. You end up with a 13x fund instead of a 1.3x fund, before fees and carry.

The dilution from seed to exit also matters a lot. If you believe the dilution from seed to exit is only 50% and your top-performing investment, out of 100 investments, will be worth $10 billion, then you will end up with a 2x fund, before fees and carry, instead of a 1.3x fund (at 2/3 dilution).

There are only several hundred companies in the world with market caps of over $100 billion and roughly a quarter of them have come out of venture capital portfolios in the last thirty years.

So it can happen, but it is very unlikely. In almost twenty years of producing some of the highest performing VC funds in the business, USV has never had a portfolio company become worth over $100 billion. That is a very high bar, too high to expect in your portfolio.

So, in a world where we are seeing more and more $100mm valued seed rounds, one has to ask the question what are the investors expecting? A $100 billion outcome? Doubtful. Less dilution, maybe. A different power-law distribution? Don’t count on it.

I think they are being delusional, comforted by the likelihood that someone will come along and pay a higher price in the next round. But it seems that person may also be delusional. Because when you model things out, the numbers just don’t add up.

I think a strong case can be made for seeds in the low eight figures. If you run that same model with a $20mm post-money value, you get a 6.667x fund before fees and carry. That’s a strong seed fund, probably a tad better than 4x to the LPs, after fees and carry. If you think you can get one of your hundred seed investments to a $10bn outcome, then paying $20mm post-money in seed rounds seems to make a lot of sense.

The exit values in VC have increased significantly over the last decade leading to escalating entry values. That makes sense. But the two things that have not changed materially over the last decade are the dilution from seed to exit and the power-law distribution of outcomes in an early stage portfolio.

The failure rates are so high in early-stage investing that the power-law curves are steep. If your best-performing investment, after taking significant dilution, cannot return your early-stage fund, then you are doing something wrong.

You get points for doing certain actions, just like following them in social media, signing up for their newsletter or email list, or buying stuff from their stores. With those points, you can claim stuff, like a voucher, or use it to pay for items.

The thing about social tokens, though, is that the creator and its holders can do anything they want with it, unlike loyalty points where you’re stuck with what the brand tells you can do with it.

Now you might be thinking…

Why the fuck-?

I’ll be giving these tokens to everyone who has supported me with what I’ve done in life. It serves as a signal for me to know who I can trust. The more tokens you have, the bigger the signal is for me that we’ve been through a lot.

“Support” doesn’t JUST mean monetary, btw. We’re also talking morally. This can mean a lot of things like sharing my works in social media, or visiting my booth in events I sell stickers at, or inviting me to events, etc. etc. I’ve always appreciated these even before the token, and this time, I can give you something back.

This is beneficial for me in a way that I’d prioritize people with more tokens when it comes to anything (like getting insurance, or any kind of service or product).

“Hey Gian! Long time no talk, but I’ve been a supporter of yours from the start-“ Yeah, let’s see how many tokens you have to prove it.

So… what can I do with it?

Right now, I’ve thought of giving token-holders the power to voice out their opinions on some of my life decisions, like if I should study design abroad, or just visit Web3 friends + live and collaborate with them.

Example: I let attendees of the talk I did vote on how I’m going to use $500.

“That sounds like some Black Mirror bullshit.”

Following the train of thought behind the creation of the token, people who have more tokens have pretty much shaped my life, so they understand me more than the people with less tokens.

While the concept of blockchain, crypto, and Web3 in general is decentralization, this is still a person’s life we’re talking about. This is why my family and I will be owning 55% of these tokens. 35% to me, and 20% to my family. The remaining 45% will be for people I’ve met throughout my life.

Another thing that I have in mind is that I’ll let you have some sort of VIP treatment for some of the things I’ve been doing. I’m thinking free tickets to the events I put up (or even backstage passes), or free copies of whatever I make physically or digitally (like stickers, prints, shirts, NFTs, etc.). Token holder-only parties, especially for my birthday?! IDEK at this point.

BTW, token-holders can do whatever the fuck they want. Give it to other people? Sure. Token-holders can even propose added perks (like the ones mentioned above) which will be up for vote for all token-holders.

Just remember what the token can primarily do, and that is shape my life.

How do I get it?

You don’t have to pay anything to get it. Just send me your crypto wallet address for the Ethereum / Polygon network (from Metamask, Trust, or Rainbow). If I’ve known you for quite some time now, you’ll for sure get some tokens, but this offer is only up to 2027.

Other ways to get tokens is by purchasing any of my NFTs, or supporting any of my businesses or whatever projects monetarily.

I can literally think of any mechanic that will give you more tokens. Again, token-holders can propose these and be put up to a vote (like the “Condo or business” question).

The future…

The thought of putting monetary value to the token has been in my head. I mean, people’s trust and support has put a roof on top of my family’s head, food on our plates, and at one point, I will have more than I’ll need. Why not share those blessings?!

I’ve thought of pledging a part of my income so that I can make a liquidity pool where people can exchange $GIAN for other crypto. I’ve also thought of incentivizing adding to the liquidity pool (both $GIAN and another token or currency).

My fear is that putting in money changes the dynamics in these human connections and interactions… and most likely, it will. (See “Total Forgiveness”, a web series from CollegeHumor where a couple of friends dares each other crazy shit. Do the dare = Get cash to pay for their $60-100K+ worth of student loans.)

Anyways…

To get the latest updates about the token (not my social media posts), join the Telegram channel here. The first proposal might be out some time this January, focusing on goals I want to put up this 2022. Token-holders help me prioritize them.

If you know me, send me your crypto wallet address on Twitter, Instagram, Messenger, etc. and I’ll be giving you $GIAN if we have interacted before / I’d like to interact or reconnect with you.

Yes. This means that even if we haven’t interacted before, or it’s been a while, you may send your crypto address.

Wallets Accepted: Metamask, Rainbow, Trust Wallet, Trezor, Ledger, anything that accepts ERC-20 tokens (or supports the Polygon network)

Wallets NOT Accepted: Ronin, or any wallet address from exchanges or CeFi -- centralized Finance (Binance, Coinbase, OKEx, Celsius, Crypto.com, PDAX, Coins.ph, BlockFi, Nexo, etc.)

In case you want to see them on your wallet, you can import them using the following token addresses:

Ethereum: 0xc48752b8e1dc43f9d70504099b5c17c4380ac605 - Etherscan

Polygon: 0x8527abef4ede978af2b753543f8864ec85fd55c6 - Polygonscan

$GIAN was minted on Coinvise! You can mint your or your community’s social token there, FOR FREE, on Ethereum or Polygon!