There is a new venture studio in the world, which is quite different from the previous venture studios from a structural point of view. Unlike reputable outfits like Atomic or Science or Expa, which then create companies that sell to capitalists who expect that capital to rise in value, SuperLayer intends to promote consumer projects in this new studio and then invite them instead of selling them to capitalists. will. communities that use these products, which they invest in obtaining tokens, can then buy or sell or use to participate in other projects.

In fact, in the case of SuperLayer, tokens may all look different, but all of them will be linked to a blockchain network called Rally, created by the creators of SuperLayer, and they want to help you know by creating more interesting applications on it.

It is part of what initial cryptographers label Web3 and describe as internet-owned and orchestrated by builders and users. It’s also a world where many venture capitalists continue to approach with caution. But they may lose the ship as they begin to create more costumes like SuperLayer, many of which are created by fight-tested creators.

In the case of Superlayer, the founder is Kevin Chou, who sold his gaming company, Kabam, for $ 800 million in 2018 and jumped into the world of blockchain technology almost immediately, believing it could unlock new economic opportunities, including for players. and or creators.

In fact, before creating SuperLayer, Chou created a blockchain startup called Forte; He is also one of the founders of Rally, where the creators build and distribute their digital currencies, basically the so-called white label versions of the RLY coin.

Chouk has had the support of investors like Coinbase Ventures and Andreessen Horowitz, and they have already seen a significant rise. These RLY coins, which were worth five cents when all 15 billion were made, are now being traded on Coinbas and several other exchanges for approximately $ 052. Investors and team members are said to control more than three-quarters of that supply right now – so they have to hold on to it or reduce the price – but the idea is for the community to own 70% of it all over time.

If everything goes as planned, it could enrich a lot of rich people, and it can also enrich a lot of token owners who have less wealth. Note that about 7% of the coins are in circulation, and the currency provides market capitalization of $ 800 million. But if all 15 billion coins were released at today’s price, the fully diluted market capital of the coins would be $ 7.9 billion.

The effort made by Chou and the company to decentralize its social token infrastructure is interesting in its own right. However, the real story here may be the opportunities and challenges that an organization like SuperLayer poses to venture capitalists because of its relative complexity compared to traditional capital investments.

That’s largely why Sequoia Capital announced earlier this week that it is becoming a registered investment advisor. Roelof Botha, Sequoia’s head of U.S. operations, wrote in the Medium on Tuesday that becoming an RIA extends the company’s flexibility in a number of ways; it also allows Sequoia to increase investment in rising asset classes, such as cryptocurrencies.

Chouk doesn’t necessarily think Sequoia is restructuring itself because of its growing interest in cryptographic offerings. But he believes more companies will have to continue if they want to take advantage of efforts like his own.

“In a world where these new technology platforms are fueling these tokens, with a very different business model and very different technology architecture,” smart companies acknowledge that “We need to do that,” says Chouk. .

By “that,” it means to evolve. One of the biggest challenges for traditional funds, Chouk says, is that when an investment becomes liquid, a company’s obligation to its investors is to make money from that “exit,” or to distribute the entity’s shares. at the point, their investors can decide whether they want to own or sell them.

But in the world of cryptography, many ideas are to use tokens from one project and use them to participate in the growth of another project. It can mean buying and selling and being an active participant – and sometimes very patient. Chouk suggests it’s a job that few venture companies fully understand at the moment.

They will regret, Chouk says, that cryptographic creators are running out of patience with traditional VCs – and more and more blockchains and their applications as they begin to take hold. A few years ago, entrepreneurs didn’t care about having to shake hands with investors, he said: “More and more in 2021, the creator of a cryptocurrency that is gaining some traction and trying to raise money will not go to the traditional Sand Hill Road company”.

It’s not worth the time and effort, says Chouk. Many have strict limits on tokens, and most still need a lot of hands. He knows, he has lived. “We had to spend a lot of time with finance [teams] that [have] No cryptocurrency investment has ever been made. We had to hold meetings of investment committees, CFO meetings, lawyers ’meetings, just to deliver their tokens. Then [you have] to help them set up their security and operations, how the general partnership holds tokens and how they disperse tokens to their LPs … “

He says the process was “really painful.”